Crypto

When to Pay Crypto Tax?

George Dimov September 22, 2024

You need to pay taxes on cryptocurrency transactions when you realize a gain or earn income. Key moments when crypto tax becomes due include:

Selling cryptocurrency for cash
Exchanging one cryptocurrency for another
Using cryptocurrency to buy goods or services
Receiving cryptocurrency as payment

Taxes are typically owed by the tax filing deadline (April 15) or through quarterly estimated tax payments if required. Missing these deadlines may result in penalties or interest. For more details, refer to the IRS virtual currency tax guidelines.

Crypto Tax Deadlines

Annual Filing Deadline: April 15
Quarterly Estimated Payments:
- April 15
- June 15
- September 15
- January 15
Tax Loss Harvesting Deadline: December 31

Crypto Taxable vs. Non-Taxable Events

Taxable Events	Non-Taxable Events
Selling cryptocurrency for cash	Holding cryptocurrency without selling
Trading one cryptocurrency for another	Transferring crypto between personal wallets
Using cryptocurrency to buy goods/services	Gifting cryptocurrency (within annual limits)
Receiving crypto as payment (mining, staking)	Donating cryptocurrency to charity

FAQs on When to Pay Crypto Tax

Do I owe taxes if I only hold cryptocurrency?

No. Merely holding cryptocurrency is not taxable. You owe taxes when you sell, trade, or use it.

How often do I need to pay taxes on crypto?

Crypto taxes are generally paid when you file your annual tax return by April 15. However, quarterly estimated payments may be required if you owe significant amounts.

Can I offset crypto gains with losses?

Yes. Crypto losses can offset capital gains. You may also deduct up to $3,000 of excess losses against other income.

What if I don’t report my crypto transactions?

You could face penalties, interest, or legal action from the IRS for failing to report taxable crypto transactions.

Are crypto-to-crypto trades taxable?

Yes, trading one cryptocurrency for another is taxable and must be reported on your tax return.

For help with calculating and reporting your crypto taxes, reach out to Dimov Tax. We assist with transaction reporting, capital gains calculations, and ensuring IRS compliance.