Form 8949: A 2025 Guide for Australians with US Investments

With an increasing number of Australians investing in US shares, ETFs, and even cryptocurrency exchanges, the US tax system is popping up in more places than most expect. One form that often confuses expats, dual citizens, and cross-border investors is Form 8949—an IRS document designed to report sales and disposals of capital assets. If you’re an Australian with US investments, here’s your 2025 playbook for handling Form 8949, including what’s changed, how it affects your ATO return, and tips for getting it right the first time.

What Is Form 8949—and Who Needs to File It?

Form 8949 is the US Internal Revenue Service’s (IRS) way of tracking every sale or disposal of capital assets. This includes:

• US-listed shares (e.g., Apple, Tesla, Amazon)

• Exchange-traded funds (ETFs) or managed funds on US exchanges

• Cryptocurrencies traded on US-based platforms

• Other property or assets subject to US capital gains tax

For Australians, Form 8949 usually comes into play if you’re a US citizen, green card holder, or have another US tax obligation—such as owning US property or investments. Even if you live in Australia, you might still have to file a US tax return if you meet these criteria.

2025 Updates: What’s New on Form 8949?

The IRS has updated Form 8949 and its instructions for the 2025 tax year, with a few key changes to watch for:

• Crypto Reporting: US-based exchanges must now issue Form 1099-DA, which feeds directly into Form 8949. This means the IRS will have more precise records of your crypto sales and disposals.

• Digital Asset Checkbox: There’s a new digital asset question on the form. If you bought, sold, or otherwise dealt in digital assets, you must disclose it.

• Brokerage Matching: The IRS is increasing cross-checks between brokerage 1099-B forms and your Form 8949 entries. Mismatches can trigger audits or penalty letters.

These changes reflect the broader global trend toward tighter tax enforcement and greater data sharing between tax authorities—including between the ATO and IRS.

How Does Form 8949 Impact Your Australian Tax Return?

Even though Form 8949 is a US document, it can have real consequences for your Australian tax obligations:

• Double Taxation Agreements: Australia and the US have a tax treaty. Usually, you can claim a foreign income tax offset in Australia for US tax paid on capital gains, but only if you report everything correctly.

• Record-Keeping: The ATO expects you to keep detailed records of foreign asset transactions, including US brokerage statements and Form 8949. Inconsistent records can lead to questions or even audits.

• Crypto and Share Trading: If you’re trading crypto or US shares frequently, your ATO obligations may differ from your US ones. For example, Australia doesn’t have the same ‘wash sale’ rules as the US—so strategies that work on one side may not work on the other.

Example: If you sold US shares at a gain in 2024 and received a 1099-B and Form 8949 from your US broker, you’ll need to declare the capital gain in both countries. The ATO will expect you to convert the sale and purchase amounts to AUD and include them in your Australian tax return, while the IRS will want the transaction in USD on Form 8949 and Schedule D.

Smart Tips for Australians Dealing with Form 8949

• Automate Record-Keeping: Use portfolio tracking tools or your brokerage’s downloads to keep a running ledger of buys, sells, and cost bases in both USD and AUD.

• Check for Double Reporting: Some brokers issue both 1099-B and 8949 summaries. Make sure not to double-count trades on your US return.

• Beware Crypto Traps: The new IRS crypto reporting regime means any disposal (including swaps and staking) must be reported on Form 8949. The ATO is also watching, so maintain clear records in both currencies.

• Get Professional Help for Complex Cases: If you’re trading frequently, using options, or have a mix of assets, consider engaging a cross-border tax specialist. The cost is often outweighed by the potential savings and peace of mind.

Conclusion: Stay Ahead of US and Australian Tax with the Right Forms

Form 8949 is more than just a piece of US tax paperwork—it’s a key document that links your global investment activities with your Australian tax obligations. With 2025 bringing new IRS enforcement and reporting rules, getting your Form 8949 right is essential to avoid double taxation, penalties, or unwanted attention from either the IRS or the ATO. Stay organised, leverage the latest tech tools, and keep your documentation airtight to make tax season as painless as possible—no matter which side of the Pacific you’re on.