United States
ModerateBitcoin & cryptocurrency tax overview
Capital Gains Tax
Crypto disposals (sales, trades, purchases) trigger capital gains tax. Short-term gains (held under 1 year) taxed as ordinary income up to 37%. Long-term gains (held over 1 year) taxed at 0%, 15%, or 20% depending on taxable income. Net Investment Income Tax of 3.8% may also apply.
Income Tax
Mining rewards, staking rewards, airdrops, and crypto received as payment are taxed as ordinary income at receipt at fair market value. Rates range from 10% to 37% depending on total income. This also sets the cost basis for future capital gains calculations.
VAT / GST
Exempt. The IRS treats cryptocurrency as property, not currency. No federal VAT or GST exists in the US. Some states may apply sales tax to crypto transactions in limited circumstances, but federal-level VAT or GST does not apply to individual crypto transactions.
Mining Tax
Solo miners report mining income as self-employment income, subject to ordinary income tax rates plus self-employment tax of 15.3% on net earnings. Business miners may deduct ordinary and necessary expenses such as electricity and hardware. Mining as a business requires Schedule C filing.
Key Takeaways
- United States has a moderate approach to cryptocurrency taxation.
- Capital gains on Bitcoin: Crypto disposals (sales, trades, purchases) trigger capital gains tax. Short-term gains (held under 1 year) taxed as ordinary income up to 37%. Long-term gains (held over 1 year) taxed at 0%, 15%, or 20% depending on taxable income. Net Investment Income Tax of 3.8% may also apply..
- Income tax treatment for crypto: Mining rewards, staking rewards, airdrops, and crypto received as payment are taxed as ordinary income at receipt at fair market value. Rates range from 10% to 37% depending on total income. This also sets the cost basis for future capital gains calculations..
Tax Summary
The IRS treats cryptocurrency as property, meaning every disposal is a taxable event subject to capital gains tax. Long-term holders benefit from reduced rates of 0%, 15%, or 20%, while short-term gains and crypto income such as staking and mining are taxed as ordinary income up to 37%. The US requires detailed record-keeping of all transactions and has introduced broker reporting requirements under the Infrastructure Investment and Jobs Act effective from 2025.
Frequently Asked Questions
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Disclaimer
This information is for general reference only and should not be considered tax advice. Tax laws change frequently and may vary based on individual circumstances, residency status, and transaction type. Always consult a qualified tax professional in your jurisdiction before making financial decisions based on this information.