The first thing you need to understand is that unlike other tax forms, you don’t enter a 1099-K directly on your tax return. That’s because the amount on your 1099-K isn’t necessarily your taxable income.If you put $1,000 into a bank savings account and took out your $1,000 plus $10 in interest at the end of the year, the bank would send you a 1099-INT for $10 in interest. You can use the $10 on your tax return, because that’s the amount that’s taxable. The difference with Coinbase and 1099-Ks is that your 1099-K for a similar transaction might show $1,010, but you don’t have to pay taxes for getting your $1,000 back ‡ only for the $10 that you gained.The above example is simple, but things get complicated when you had many transactions of different types throughout the year. The general idea is that you need to subtract the original money you invested and only pay tax on the money you earned. There are also different categories of taxes.If you mine cryptocurrency, you report the amount you received for mining as business income on a Schedule C. That’s because you were paid for the service of providing computing power.If you traded or sold cryptocurrency, you report the difference between the price you sold it for and the price you bought it for on a Schedule D. Those transactions are treated as capital gains similarly to selling stock or other assets.If someone paid you in cryptocurrency for work you did or something you sold, you’d owe taxes similarly to if you had been paid in cash. If you paid someone else in cryptocurrency, you usually treat it as if you sold the cryptocurrency and pay the tax owed on that sale.There are also exceptions where you might not owe taxes such as certain types of charitable donations.None of this information is on your 1099-K. The 1099-K just shows everything all mixed together in one total amount. You have to go back into your Coinbase account and look at all of your transactions to figure out what’s what. You may also need to use your personal financial records if Coinbase doesn’t save all the information that you need. Founder’s CPA has a more detailed guide on how to calculate taxes after receiving a Coinbase 1099.So what’s the point of the 1099-K? It isn’t to help you. It’s to stop tax fraud. The IRS has no way of knowing how much you received in cryptocurrency or why, so it needs you to tell it. But, some people obviously won’t report income if they think they can get away with it. The 1099-K tells the IRS, this person got “$XX,XXX” in cryptocurrency, check if it’s on their tax return, and if not, find out if it should have been.Note that all of the above is only very general information and could vary based on your exact situation. To do your taxes properly, you’ll either need to spend some time researching those topics or hire someone to give you professional advice.