Question 1

Do I need to report Polymarket earnings on my taxes?

Accepted Answer

Yes, all earnings from Polymarket prediction markets must be reported to the IRS. This includes both winning predictions and any market-making profits. The IRS considers these taxable events that need to be properly documented.

Question 2

Does Polymarket issue 1099 tax forms?

Accepted Answer

No, Polymarket does not currently issue 1099 forms to users. As a decentralized prediction market, they don't collect the tax information needed to generate these forms. That's why you need to track and report your transactions independently using tools like PolyTax.

Question 3

How do I calculate Polymarket capital gains tax?

Accepted Answer

Calculate your gain or loss by subtracting your cost basis (purchase price) from your proceeds (sale price) for each position. PolyTax automatically calculates this for all your trades and generates the required IRS forms with accurate calculations.

Question 4

What tax forms do I need for Polymarket trading in 2024?

Accepted Answer

You'll need IRS Form 8949 to report your individual Polymarket transactions and Schedule D to summarize your capital gains and losses. PolyTax generates both forms automatically from your Polymarket trading history.

Question 5

Is Polymarket taxed as capital gains or gambling income?

Accepted Answer

Most Polymarket trades are taxed as short-term capital gains (held less than one year) at your ordinary income tax rate. Positions held over one year may qualify for long-term capital gains rates. Market-making activities might be considered ordinary income.

Question 6

How does PolyTax handle USDC transactions?

Accepted Answer

PolyTax automatically tracks your USDC basis and converts all transactions to USD values using historical exchange rates. This ensures accurate reporting even when trading with stablecoins.

Question 7

Can I deduct Polymarket trading losses on my taxes?

Accepted Answer

Yes, capital losses from Polymarket can offset capital gains from other investments. If losses exceed gains, you can deduct up to $3,000 against ordinary income, with excess losses carried forward to future years.

Question 8

When are Polymarket taxes due in 2025?

Accepted Answer

Polymarket earnings must be reported on your annual tax return, due April 15th (or October 15th with extension). However, if you have substantial gains, you may need to make quarterly estimated tax payments to avoid penalties.

Tax Documents forPolymarket Traders

Everything You Need for Tax Compliance

Form 8949

Schedule D

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Audit Trail

Simple Three-Step Process

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What You'll Receive

Included Documents

Tax Treatment Options

Common Questions About Polymarket Tax Reporting