How Exchange Fees Can Reduce Your Crypto Taxes In USA
Learn how exchange fees can lower your crypto tax bill in the USA this year 2024.
In the USA, whether you live in the sunny side of California or bustling NYC!
You'll have to pay your crypto taxes on your crypto earnings come this April 15th.
Not sure where to start? Worry not, we've got you covered!
Check out our guide for 2024 crypto tax rates in the USA to understand all about crypto taxes in the US, including Capital Gains Tax rates, Federal Income Tax rates, and State Income Tax rates, no matter where you reside.
Well, there are a few key rates to keep in mind:
Your Income Tax is a combination of the Federal and State rates (if your state has one). Meanwhile, your Capital Gains Tax can be either 0%, 15% or 20%, depending on how much you earn annually - including any crypto profits. Capital Gains tax on the amount you'll owe depends on your investments and how long you've held onto them.
If you want a full detailed guide about USA Crypto Tax then check out our Ultimate USA Crypto Tax Guide, but to give you a quick Breakdown:
Now that you've got the basics, let's break it down further and see just how much you'll be paying out in crypto taxes.
Here’s a simple breakdown:
*Remember, whether you owe short or long-term Capital Gains Tax depends on how long you've held onto your assets.
If you’re curious about the tax rate you'll owe on the money you make from crypto? Well, it depends on how long you've owned it. If it's been less than a year, you'll pay your regular Federal and State Income Tax rate on short-term crypto gains. But if you've held onto your crypto for more than a year, you'll pay a lower tax rate called the long-term Capital Gains Tax rate on your earnings. Just keep in mind that if you're dealing with NFTs which are considered collectibles, you might end up paying a higher 28% long-term Capital Gains Tax rate.
In 2023, here are the long-term crypto gains tax rates (applicable for taxes due in April 2024):
2023 Update
President Biden has proposed various tax reforms in the 2023 Federal Budget, potentially affecting crypto investors. One proposed change is increasing the long-term Capital Gains Tax rates for affluent investors from 20% to 39.6% for those earning over $1 million annually. Additionally, crypto may be included in the wash sale rule alongside stocks, limiting tax loss harvesting. However, these proposals are subject to approval. We'll keep you updated on any developments.
In 2024, the long-term crypto gains tax rates (for taxes due in April 2025) are as follows:
If your total income for 2023, including any money you made from crypto, is less than $44,625 (if you're filing as a single taxpayer), you won't have to pay any Capital Gains Tax on long-term gains. For 2024, this amount goes up to $47,026
For any short-term gains from selling, swapping, or spending crypto you've owned for less than a year, you'll pay your regular Federal Income Tax rate (plus any applicable state taxes, which we'll talk about in a moment). The same tax rate applies to other types of crypto income, like mining rewards, staking rewards, airdrops, and hard forks.
The Federal Income Tax rates for 2023 (for taxes due in April 2024) are as follows:
The Federal Income Tax rates for 2024 (for taxes due in April 2025) are as follows:
When you're dealing with Income Tax on crypto, you might have to pay both federal and state taxes. But here's the thing: most states haven't given clear instructions on how they tax cryptocurrency. So, it's best to talk to a crypto accountant to understand your state tax responsibilities.
Typically, states follow the federal rules for taxing crypto. This means they usually treat crypto as property, and the same tax rules that apply to property transactions will likely apply to crypto transactions too.
In simple terms, if you make short-term gains or earn income from crypto, you might pay State Income Tax.
State taxes can vary. In some states, your tax rate increases as you earn more, similar to how federal Income Tax works. In others, you might pay a flat income tax rate. And in some states, you might not pay any tax at all.
We won't go over every state here. But we'll give you a basic idea and talk about the most popular states for crypto investors.
Only a few states have given advice on how cryptocurrency transactions are taxed, mostly focusing on whether sales tax applies rather than Income Tax. Here are the states that have offered guidance:
Texas, known for its thriving crypto mining industry, is becoming increasingly attractive for crypto investors. In addition to this, there's buzz about El Salvador, a big supporter of Bitcoin, considering opening a Bitcoin embassy in Texas. Moreover, a new bill is on the table in the Texas legislature. It suggests making purchases of goods and services with Bitcoin tax-free in the state.
Eight states in the US don't have an individual state income tax. These states are: Alaska, Florida, Nevada, South Dakota, Tennessee, Texas, Washington, Wyoming.
But, it's not all sunshine and roses. Some of these states have higher taxes in other areas. For example, Washington is the first state to include NFTs in its sales tax rules. Now, sellers and retailers must charge a 6.5% state tax on NFTs.
10 states in the USA have a flat income tax rate. Here they are along with their tax rates:
It's important to know what counts as income in your state. For instance, in New Hampshire, regular income isn't taxed at the state level, only dividends and interest income.
Now that we've covered the basics, let's take a look at the 2 most popular states for crypto and their tax rates.
Curious about how much you'll pay in California state income taxes on crypto?
These are the California state income tax rates for 2023 (for taxes due in April 2024):
Important Note: Along with the above rates, New York State imposes an extra tax on individuals with an adjusted gross income exceeding $107,650. Additionally, residents of New York City AKA (Yonkers) are subject to local income taxes, in addition to the state tax. These rates vary based on income and are 3.078%, 3.762%, 3.819%, and 3.876% respectively.
For most people, tax filing is part of their yearly routine, typically due by April 15th each year. If April 15th falls on a holiday or weekend, the deadline may be extended to the next business day.
To keep track of your taxes in the USA, here are some key dates to remember:
Kryptos is Your Personal Crypto Tax Assistant that simplifies crypto taxes. Not only does it effortlessly calculate your crypto taxes such as capital gains, losses, income, and expenses, but it also provides features to optimize your tax position.
Track your unrealized gains and losses with Kryptos, gaining insights into when to HODL and when to make decisions about your investments.
Kryptos offers support for various cost basis methods, including FIFO, LIFO, and HIFO. You can customize these settings to see how they impact your crypto taxes.
Beyond saving you from hours of spreadsheet work and calculations, Kryptos also cuts down the time spent on form-filling. For US investors, Kryptos generates pre-filled forms ready for submission to the IRS or your tax portal. These include - IRS Form 8949 & Schedule D, TurboTax Report, Tax Act Report, Complete Tax Report.
Make your crypto tax experience more efficient with Kryptos.
Understanding the tax implications of your crypto earnings involves considering Federal Income Tax, State Income Tax (if applicable), and Capital Gains Tax. Federal Income Tax and State Income Tax rates vary depending on your income bracket, while Capital Gains Tax rates can be either 0%, 15% or 20%, determined by the duration of holding your assets.
Crypto transactions such as selling, trading, or spending crypto typically incur Capital Gains Tax. Additionally, income from activities like mining, staking, airdrops, or hard forks is considered taxable income and subject to Federal & State Income Tax. However, buying and holding crypto generally do not trigger tax obligations.
Capital Gains Tax on crypto earnings depends on the duration of holding the assets. Short-term gains (assets held for less than a year) are taxed at regular income tax rates, while long-term gains (assets held for over a year) are taxed at a lower rate. NFTs, considered collectibles, may incur a higher 28% long-term Capital Gains Tax rate.
While most states follow federal guidelines on taxing crypto, specific regulations vary. Some states, like California and New York, treat cryptocurrencies similarly to cash, while others have nuanced approaches. Additionally, states like Texas are considering measures to incentivize crypto adoption by exploring tax-free transactions with Bitcoin.
Crypto taxes in the USA are typically due annually by April 15th, following the end of the tax year. Extensions may be available under certain circumstances. To simplify the tax filing process, platforms like Kryptos offer tools to calculate, track, and optimize crypto taxes, including generating pre-filled forms for IRS submission.
All content on Kryptos serves general informational purposes only. It's not intended to replace any professional advice from licensed accountants, attorneys, or certified financial and tax professionals. The information is completed to the best of our knowledge and we at Kryptos do not claim either correctness or accuracy of the same. Before taking any tax position / stance, you should always consider seeking independent legal, financial, taxation or other advice from the professionals. Kryptos is not liable for any loss caused from the use of, or by placing reliance on, the information on this website. Kryptos disclaims any responsibility for the accuracy or adequacy of any positions taken by you in your tax returns. Thank you for being part of our community, and we're excited to continue guiding you on your crypto journey!
In the USA, whether you live in the sunny side of California or bustling NYC!
You'll have to pay your crypto taxes on your crypto earnings come this April 15th.
Not sure where to start? Worry not, we've got you covered!
Check out our guide for 2024 crypto tax rates in the USA to understand all about crypto taxes in the US, including Capital Gains Tax rates, Federal Income Tax rates, and State Income Tax rates, no matter where you reside.
Well, there are a few key rates to keep in mind:
Your Income Tax is a combination of the Federal and State rates (if your state has one). Meanwhile, your Capital Gains Tax can be either 0%, 15% or 20%, depending on how much you earn annually - including any crypto profits. Capital Gains tax on the amount you'll owe depends on your investments and how long you've held onto them.
If you want a full detailed guide about USA Crypto Tax then check out our Ultimate USA Crypto Tax Guide, but to give you a quick Breakdown:
Now that you've got the basics, let's break it down further and see just how much you'll be paying out in crypto taxes.
Here’s a simple breakdown:
*Remember, whether you owe short or long-term Capital Gains Tax depends on how long you've held onto your assets.
If you’re curious about the tax rate you'll owe on the money you make from crypto? Well, it depends on how long you've owned it. If it's been less than a year, you'll pay your regular Federal and State Income Tax rate on short-term crypto gains. But if you've held onto your crypto for more than a year, you'll pay a lower tax rate called the long-term Capital Gains Tax rate on your earnings. Just keep in mind that if you're dealing with NFTs which are considered collectibles, you might end up paying a higher 28% long-term Capital Gains Tax rate.
In 2023, here are the long-term crypto gains tax rates (applicable for taxes due in April 2024):
2023 Update
President Biden has proposed various tax reforms in the 2023 Federal Budget, potentially affecting crypto investors. One proposed change is increasing the long-term Capital Gains Tax rates for affluent investors from 20% to 39.6% for those earning over $1 million annually. Additionally, crypto may be included in the wash sale rule alongside stocks, limiting tax loss harvesting. However, these proposals are subject to approval. We'll keep you updated on any developments.
In 2024, the long-term crypto gains tax rates (for taxes due in April 2025) are as follows:
If your total income for 2023, including any money you made from crypto, is less than $44,625 (if you're filing as a single taxpayer), you won't have to pay any Capital Gains Tax on long-term gains. For 2024, this amount goes up to $47,026
For any short-term gains from selling, swapping, or spending crypto you've owned for less than a year, you'll pay your regular Federal Income Tax rate (plus any applicable state taxes, which we'll talk about in a moment). The same tax rate applies to other types of crypto income, like mining rewards, staking rewards, airdrops, and hard forks.
The Federal Income Tax rates for 2023 (for taxes due in April 2024) are as follows:
The Federal Income Tax rates for 2024 (for taxes due in April 2025) are as follows:
When you're dealing with Income Tax on crypto, you might have to pay both federal and state taxes. But here's the thing: most states haven't given clear instructions on how they tax cryptocurrency. So, it's best to talk to a crypto accountant to understand your state tax responsibilities.
Typically, states follow the federal rules for taxing crypto. This means they usually treat crypto as property, and the same tax rules that apply to property transactions will likely apply to crypto transactions too.
In simple terms, if you make short-term gains or earn income from crypto, you might pay State Income Tax.
State taxes can vary. In some states, your tax rate increases as you earn more, similar to how federal Income Tax works. In others, you might pay a flat income tax rate. And in some states, you might not pay any tax at all.
We won't go over every state here. But we'll give you a basic idea and talk about the most popular states for crypto investors.
Only a few states have given advice on how cryptocurrency transactions are taxed, mostly focusing on whether sales tax applies rather than Income Tax. Here are the states that have offered guidance:
Texas, known for its thriving crypto mining industry, is becoming increasingly attractive for crypto investors. In addition to this, there's buzz about El Salvador, a big supporter of Bitcoin, considering opening a Bitcoin embassy in Texas. Moreover, a new bill is on the table in the Texas legislature. It suggests making purchases of goods and services with Bitcoin tax-free in the state.
Eight states in the US don't have an individual state income tax. These states are: Alaska, Florida, Nevada, South Dakota, Tennessee, Texas, Washington, Wyoming.
But, it's not all sunshine and roses. Some of these states have higher taxes in other areas. For example, Washington is the first state to include NFTs in its sales tax rules. Now, sellers and retailers must charge a 6.5% state tax on NFTs.
10 states in the USA have a flat income tax rate. Here they are along with their tax rates:
It's important to know what counts as income in your state. For instance, in New Hampshire, regular income isn't taxed at the state level, only dividends and interest income.
Now that we've covered the basics, let's take a look at the 2 most popular states for crypto and their tax rates.
Curious about how much you'll pay in California state income taxes on crypto?
These are the California state income tax rates for 2023 (for taxes due in April 2024):
Important Note: Along with the above rates, New York State imposes an extra tax on individuals with an adjusted gross income exceeding $107,650. Additionally, residents of New York City AKA (Yonkers) are subject to local income taxes, in addition to the state tax. These rates vary based on income and are 3.078%, 3.762%, 3.819%, and 3.876% respectively.
For most people, tax filing is part of their yearly routine, typically due by April 15th each year. If April 15th falls on a holiday or weekend, the deadline may be extended to the next business day.
To keep track of your taxes in the USA, here are some key dates to remember:
Kryptos is Your Personal Crypto Tax Assistant that simplifies crypto taxes. Not only does it effortlessly calculate your crypto taxes such as capital gains, losses, income, and expenses, but it also provides features to optimize your tax position.
Track your unrealized gains and losses with Kryptos, gaining insights into when to HODL and when to make decisions about your investments.
Kryptos offers support for various cost basis methods, including FIFO, LIFO, and HIFO. You can customize these settings to see how they impact your crypto taxes.
Beyond saving you from hours of spreadsheet work and calculations, Kryptos also cuts down the time spent on form-filling. For US investors, Kryptos generates pre-filled forms ready for submission to the IRS or your tax portal. These include - IRS Form 8949 & Schedule D, TurboTax Report, Tax Act Report, Complete Tax Report.
Make your crypto tax experience more efficient with Kryptos.
Understanding the tax implications of your crypto earnings involves considering Federal Income Tax, State Income Tax (if applicable), and Capital Gains Tax. Federal Income Tax and State Income Tax rates vary depending on your income bracket, while Capital Gains Tax rates can be either 0%, 15% or 20%, determined by the duration of holding your assets.
Crypto transactions such as selling, trading, or spending crypto typically incur Capital Gains Tax. Additionally, income from activities like mining, staking, airdrops, or hard forks is considered taxable income and subject to Federal & State Income Tax. However, buying and holding crypto generally do not trigger tax obligations.
Capital Gains Tax on crypto earnings depends on the duration of holding the assets. Short-term gains (assets held for less than a year) are taxed at regular income tax rates, while long-term gains (assets held for over a year) are taxed at a lower rate. NFTs, considered collectibles, may incur a higher 28% long-term Capital Gains Tax rate.
While most states follow federal guidelines on taxing crypto, specific regulations vary. Some states, like California and New York, treat cryptocurrencies similarly to cash, while others have nuanced approaches. Additionally, states like Texas are considering measures to incentivize crypto adoption by exploring tax-free transactions with Bitcoin.
Crypto taxes in the USA are typically due annually by April 15th, following the end of the tax year. Extensions may be available under certain circumstances. To simplify the tax filing process, platforms like Kryptos offer tools to calculate, track, and optimize crypto taxes, including generating pre-filled forms for IRS submission.
All content on Kryptos serves general informational purposes only. It's not intended to replace any professional advice from licensed accountants, attorneys, or certified financial and tax professionals. The information is completed to the best of our knowledge and we at Kryptos do not claim either correctness or accuracy of the same. Before taking any tax position / stance, you should always consider seeking independent legal, financial, taxation or other advice from the professionals. Kryptos is not liable for any loss caused from the use of, or by placing reliance on, the information on this website. Kryptos disclaims any responsibility for the accuracy or adequacy of any positions taken by you in your tax returns. Thank you for being part of our community, and we're excited to continue guiding you on your crypto journey!
Earning income through crypto mining? This guide will help you understand how your mining rewards are taxed in the USA.