#BitcoinWithTariffs

#cryptoTaxes : How They Work and 2024-2025 Rates

Yes, you likely have to pay crypto taxes. Profits from crypto are subject to capital gains taxes, just like stocks.

Cryptocurrencies such as Bitcoin appreciated wildly in 2024. Many crypto investors may be tempted to cash in — but doing so may generate some tax liability. When you sell cryptocurrency, you are subject to the federal capital gains tax. This is the same tax you pay for the sale of other assets, including stocks.

How and when is crypto taxed?

Crypto taxes are a percentage of your gains. The rate depends on your income and whether or not you held the crypto for more than a year. Short-term capital gains rates range from 10% to 37%. Long-term rates run from 0% to 20%.

Selling crypto for a loss and moving wallets generally won't generate tax liability, but staking and crypto-crypto trading do. Consider the following:

How long you owned the crypto.

If you sold it after more than a year, you’ll generally pay less in taxes than if you sold sooner.

Your annual income.

In general, the higher your taxable income, the higher your rate.

You are only taxed on cryptocurrency if you sell it, whether for cash or for another cryptocurrency. So, if you bought $100 of cryptocurrency that is now worth $200 and you still own it, you aren’t taxed.