Crypto Income Tax Reporting for Spiritual Practitioners in 2026: Form 1099-DA and What You Owe the IRS

The IRS has required crypto income reporting since 2014. What changed in 2026 is the paperwork infrastructure: Form 1099-DA arrived, requiring US-based cryptocurrency exchanges to report transactions to taxpayers and the IRS. If you accept NowPayments, Bitcoin, or any other digital asset for readings, courses, or digital downloads, your reporting obligations have not changed - but the data flowing to the IRS about your transactions has.

Here is what that means for US practitioners, and what non-US practitioners need to know about their home-country obligations.

Why Crypto Income Was Always Taxable

The IRS treats digital assets as property, not currency. Under IRS Notice 2014-21 and subsequent guidance, any time you receive cryptocurrency in exchange for services, you have received taxable income. The amount is the fair market value of the crypto in US dollars at the moment of receipt.

There is no minimum threshold below which this disappears. A $20 tarot reading paid in Ethereum is $20 of taxable ordinary income. The blockchain is a permanent record. "I did not know" and "it was a small amount" are not defenses in an audit.

Source: IRS Notice 2014-21; IRS 2026 digital asset guidance

Form 1099-DA: What It Is and Who Sends It

Form 1099-DA is a new IRS form for standardized digital asset reporting. US-based brokers - centralized exchanges like Coinbase and Kraken - must send Form 1099-DA to taxpayers by February 17, 2026 for tax year 2025 transactions.

Key details:
- It reports cryptocurrency, stablecoin, and NFT transactions through US-based brokerage platforms
- Cost basis reporting is NOT required on Form 1099-DA for tax year 2025 - cost basis reporting begins with 2026 transactions (first 1099-DA with basis data arrives early 2027)
- The form goes to both the taxpayer and the IRS

Source: TurboTax, 2026; IRS Form 1099-DA instructions, 2026; Carr Riggs Ingram, 2026

Critical point for NowPayments users: NowPayments is not a US broker or exchange and does not issue Form 1099-DA. This does not eliminate your reporting obligation. Per IRS 2026 guidance: "Every taxpayer must report any related income, gains, or losses, whether they receive a Form 1099-DA or not." Receiving crypto through NowPayments and not receiving a 1099-DA is not a reason to omit that income.

Source: IRS newsroom, digital assets reminders; CBIZ, 2026

Crypto as Payment: Ordinary Income on Schedule C

When a client pays you in crypto for a reading, course, or session, the IRS treats this as ordinary income - the same as if they had paid in dollars. For a sole proprietor, it goes on Schedule C.

The formula: Ordinary income = fair market value of crypto in USD at the moment of receipt

Example: An astrologer receives 0.01 BTC for a birth chart reading. Bitcoin is trading at $60,000 at the time of payment. Ordinary income = 0.01 x $60,000 = $600

Report $600 on Schedule C, the same as you would report a $600 bank transfer.

Source: MetaMask, 2026; The Tax Adviser, March 2026

The Double Tax Event

Here is where practitioners often get surprised: the tax obligation does not end at receipt.

When you later sell, convert, or spend the crypto you received, a second taxable event occurs - a capital gain or loss.

The formula: Capital gain/loss = sale price (in USD) minus cost basis (fair market value at time received)

Continuing the example: The astrologer holds their 0.01 BTC (cost basis = $600 from receipt). Six months later, BTC trades at $80,000. They sell.
- Sale proceeds: 0.01 x $80,000 = $800
- Cost basis: $600
- Short-term capital gain (held less than 1 year): $200, taxed at ordinary income rates (10-37%)

If they had held for more than 1 year before selling:
- Long-term capital gain: $200, taxed at 0%, 15%, or 20% depending on total income

The same double event applies to auto-conversion: if NowPayments converts incoming crypto to a stablecoin or fiat within the platform, that conversion itself may constitute a taxable disposition. [VERIFY current NowPayments settlement behavior and whether auto-conversion creates a taxable event under 2026 IRS guidance.]

Source: OurTaxPartner, 2026; USTAXFS, 2026

What to Track for Each NowPayments Transaction

For each crypto payment received, record:

Keep this record for every transaction, not just the large ones. NowPayments provides transaction history in your dashboard - export it regularly and match it against spot price data (CoinGecko, CoinMarketCap, or your exchange's historical price data are acceptable sources).

Crypto tax software - Koinly, CoinTracker, TaxBit - can automate much of this tracking if you connect your NowPayments account via API or CSV import. These tools calculate cost basis across wallets and exchanges and generate Schedule D summaries.

Non-US Practitioners: Your Home-Country Obligations

US Form 1099-DA is a US-only reporting regime. If you are based outside the US, your crypto income reporting obligations are set by your home country.

UK practitioners: HMRC treats cryptocurrency received for services as income, taxable at fair market value in GBP at the time of receipt. Subject to Income Tax on Schedule C equivalent. Subsequent disposal is a Capital Gains Tax event. HMRC has specific crypto guidance - search for "HMRC cryptoassets" for current guidance. [VERIFY specific HMRC 2026 guidance URL.]

EU practitioners: Most EU member states treat crypto received for services as taxable income at fair market value at receipt. Disposal events create capital gains subject to each member state's capital gains regime. There is no EU-wide equivalent to Form 1099-DA yet.

Regardless of jurisdiction, the underlying logic is consistent: receiving crypto for services = income event. Disposing of that crypto later = potential capital gain event.

For the payment rails side - setting up NowPayments to accept crypto - see the NowPayments vs BTCPay vs Coinbase Commerce comparison. For accepting crypto tips specifically, see the guide to accepting crypto tips as a spiritual creator. For the question of handling crypto refunds and disputes, see the crypto refunds and disputes guide.

Frequently Asked Questions

If I receive crypto and immediately convert it to USD, is it still taxable?

Yes - two events happen. First, receipt of crypto = ordinary income (Schedule C) at the USD value at time of receipt. Second, the conversion from crypto to USD = a capital disposition event. If the price moved between receipt and conversion, there is a capital gain or loss on the difference. If you convert within seconds of receipt, the gain is likely negligible, but technically still a taxable event.

Does Form 1099-DA mean the IRS already knows about my crypto payments?

For transactions through US-based exchanges (Coinbase, Kraken, etc.), yes - those exchanges report to the IRS via Form 1099-DA. For NowPayments transactions, no automatic IRS reporting occurs from the platform. But the IRS position is clear: you must report regardless of whether you receive a form.

What if I received crypto payments in prior years and did not report them?

Consult a tax professional specializing in cryptocurrency. Voluntary disclosure options exist, and the IRS has amnesty programs for taxpayers who come forward before an audit. The penalties for non-disclosure typically exceed the cost of amended returns with professional help.

Is there a minimum amount of crypto income I can ignore?

No IRS minimum threshold exists for crypto income reporting. Any amount is taxable. The de minimis exemption does not apply to crypto (unlike the proposed but not enacted bill that would have exempted transactions under $200).

How do I find the fair market value of crypto on a specific date?

Use a reputable price aggregator: CoinGecko, CoinMarketCap, or the daily closing price from a major US exchange. Record which source you used for consistency. Crypto tax software automates this lookup if you import your transaction history.