OANDA Tax Forms: What You Need to Know for Reporting Trades

Filing taxes as a trader requires reporting gains, losses, and any additional income from trading. If you use OANDA for forex or CFD trading, understanding the tax documents they provide is essential for accurate reporting and compliance.

OANDA tax forms summarize trading activity, but traders must calculate and report everything correctly. Keeping track of these documents and knowing how to interpret them makes tax season easier.

Types of Tax Documents You Could Receive

OANDA provides various tax-related documents depending on your account type, trading volume, and regulatory requirements. Understanding these documents ensures accurate tax reporting.

1099-B

For U.S. traders, OANDA issues Form 1099-B when applicable, reporting proceeds from taxable trades. This form details total sales proceeds from closing positions but may not include cost basis details for forex and CFD trades. Traders must maintain their own records to determine gains or losses.

Forex transactions typically fall under Section 988 of the Internal Revenue Code, treating most currency trades as ordinary income. However, traders who elect capital gains treatment under Section 1256(g) may see cost basis and gains information reflected on the 1099-B. Since brokers report gross proceeds but not necessarily all tax-relevant details, traders must reconcile this form with their own records before filing.

Consolidated and Year-End Statements

OANDA provides consolidated tax statements summarizing trading activity for the year. These documents include realized gains and losses, commissions paid, and any rollover interest earned. While not an official IRS form, these statements help traders prepare tax filings by offering a comprehensive breakdown of trading performance.

Unlike a 1099-B, a consolidated statement may include unrealized gains, which are not taxable but useful for tracking portfolio performance. For CFD traders, these statements may also reflect adjustments related to dividend payments on synthetic positions. Since CFDs are derivative instruments, dividends may be credited or debited based on long or short positions. Traders should verify these statements against their own records before filing taxes.

Profit/Loss Summaries

A Profit/Loss (P&L) summary provides a breakdown of trading outcomes, showing realized and unrealized gains or losses over a specific period. OANDA generates these reports to help traders track individual trade performance and profitability trends.

The IRS taxes realized gains, while unrealized amounts are not included in taxable income until positions are closed. However, traders using mark-to-market (MTM) accounting under Section 475(f) must recognize gains and losses at year-end, regardless of whether a trade was closed.

Since OANDA does not automatically report all tax liabilities, traders should use P&L summaries to verify their own calculations. Regularly reviewing these documents helps with tax planning and estimating potential liabilities.

Calculating Gains or Losses

Determining taxable profit or loss from trading requires tracking cost basis, sales proceeds, and applicable deductions. Forex and CFD traders often execute frequent transactions, making accurate record-keeping essential.

The IRS allows different accounting methods for forex traders. Section 988 treats most currency trades as ordinary income, taxed at marginal income tax rates ranging from 10% to 37% in 2024. This classification simplifies reporting but prevents capital loss carryovers. Traders who elect Section 1256 treatment benefit from a lower effective tax rate due to a 60/40 split between long-term and short-term capital gains, but this election must be made before the tax year begins.

Accounting methods such as First-In-First-Out (FIFO) and Specific Identification affect how gains and losses are calculated. FIFO assumes the earliest trades are closed first, which can result in higher taxable gains in rising markets. Specific Identification allows traders to select which positions to close, offering more control over tax outcomes. Traders using MTM accounting under Section 475(f) must recognize unrealized gains and losses at year-end, which can offset other taxable income but requires IRS approval.

Handling Interest Income

Interest income from forex trading comes from rollover rates, also known as swap rates, which are interest payments earned or charged when holding positions overnight. These rates stem from the difference in interest rates between the two currencies in a forex pair. Holding a long position in a higher-yielding currency may generate interest income, while holding a short position in the higher-yielding currency can result in an interest expense.

For tax purposes, forex interest income is reported as ordinary income and taxed at marginal rates, which range from 10% to 37% in 2024. Unlike capital gains, interest income does not qualify for lower tax rates and must be reported in the year it is earned, regardless of whether the funds are withdrawn from the trading account.

OANDA provides details on accrued interest within account statements, but traders must ensure they track and report all earned and paid interest. Overlooking small daily interest credits or debits can lead to discrepancies in tax filings. Keeping detailed records of daily rollover transactions helps reconcile reported amounts and prevents underreporting.

Accessing OANDA Documents

Traders can retrieve tax-related documents from OANDA’s client portal, where reports summarizing trading activity are available for download. Since tax reporting obligations vary by jurisdiction, traders should ensure they access the correct documents for their specific filing requirements. OANDA typically provides these reports in electronic format, allowing for easy integration with tax preparation software or financial spreadsheets.

Many traders use third-party accounting tools to consolidate financial data from multiple brokers. OANDA’s reporting system allows transaction history to be exported in formats such as CSV or PDF, which can be imported into these platforms for automated calculations. Ensuring that exported files include timestamps, trade IDs, and settlement amounts helps prevent discrepancies when reconciling tax filings. Some traders integrate OANDA data with bookkeeping software like QuickBooks or Xero to maintain a structured financial record throughout the year.

Maintaining Required Records

Proper record-keeping is necessary to substantiate reported income and deductions in case of an audit. The IRS requires taxpayers to maintain documentation for all financial transactions, including forex and CFD trades, for at least three years after filing a return. If a return is substantially understated, the statute of limitations extends to six years, and in cases of fraud, there is no time limit for review.

Traders should retain trade confirmations, account statements, and any adjustments related to fees or interest. This includes timestamps, entry and exit prices, and position sizes, which are necessary for reconciling gains and losses. Keeping copies of tax forms issued by OANDA, such as 1099-Bs and year-end summaries, ensures reported figures align with broker-provided data. Many traders use accounting software or spreadsheets to log transactions in real-time, reducing errors when preparing tax filings. For trades spanning multiple tax years, maintaining historical records helps track cost basis and prevent reporting discrepancies.