The crypto tax rate depends on how long you hold the cryptocurrency before selling or trading it. If held for less than a year, the tax is based on your ordinary income tax rate (short-term capital gains). If held for more than a year, it’s taxed at long-term capital gains rates, which are lower.
- Short-term crypto tax rate: 10% – 37% (same as your income tax bracket)
- Long-term crypto tax rate: 0%, 15%, or 20%, based on your taxable income
Crypto Tax Rate Breakdown
| Type of Gain | Holding Period | Tax Rate |
| Short-term capital gain | Less than 1 year | 10% – 37% (income tax rate) |
| Long-term capital gain | More than 1 year | 0%, 15%, or 20% (based on income) |
Frequently Asked Questions
1. Is crypto taxed like stocks?
Yes, crypto is taxed as property, similar to stocks. The tax rate depends on the holding period and your income level.
2. Do I pay taxes if I earn crypto from mining?
Yes, crypto earned through mining is taxed as ordinary income at your regular tax rate.
3. Can I offset crypto losses?
Yes, crypto losses can offset gains and reduce your taxable income by up to $3,000 annually.
4. How Are Crypto Taxes Calculated?
Crypto taxes are based on the difference between the purchase and sale price. Short-term gains apply if held for under a year; long-term gains apply if held for more than a year.
5. Do I Pay Taxes on Crypto if I Don’t Sell It?
No, you only pay taxes when you sell or trade crypto. Income from staking or mining is taxable.
6. What Happens If I Don’t Report Crypto on My Taxes?
Not reporting crypto can result in penalties, interest, or an IRS audit.
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How Does Crypto Tax Work?
