Ultimate Guide to Crypto Taxes in the US 2026: How to Pay Taxes on Cryptocurrency

In the dynamic landscape of digital assets, mastering crypto taxes in the US 2026 is vital for investors, traders, and enthusiasts. As cryptocurrency continues to integrate into mainstream finance, the IRS has ramped up enforcement, treating crypto as property for tax purposes. Whether you're holding Bitcoin, trading Ethereum, or earning from DeFi protocols, understanding how to pay taxes on cryptocurrency in the US can prevent costly penalties and optimize your returns. This in-depth guide explores the technical and financial intricacies of cryptocurrency taxation in the US, including taxable events, calculation strategies, reporting forms, and cutting-edge tools. With new broker reporting rules via Form 1099-DA kicking in for 2025 transactions (filed in 2026), compliance is more critical than ever.Why Crypto Taxes Matter in the US: A Tech and Finance LensCryptocurrency leverages blockchain technology for secure, decentralized transactions, enabling innovations like smart contracts on Ethereum and NFTs on platforms like Solana. From a monetary perspective, crypto taxes in the US directly affect your portfolio's profitability—gains are taxable, but losses can offset other income, improving your financial position. The IRS classifies crypto as property under Notice 2014-21, meaning disposals trigger capital gains taxes.In 2026, non-compliance can result in audits, penalties up to 75% for fraud, or even criminal charges. Technologically, blockchain's transparency aids IRS tracking via tools like Chainalysis, but wallet privacy and cross-chain activities complicate record-keeping. Financially, strategic crypto tax planning in the US—such as tax-loss harvesting—can reduce your effective tax rate, freeing up capital for reinvestment.Key 2026 insights: Over 50 million Americans own crypto, per surveys, and the Infrastructure Investment and Jobs Act mandates broker reporting starting with 2025 sales, enhancing IRS oversight.Taxable Events: When Do You Owe Crypto Taxes in the US?The IRS taxes "dispositions" of crypto, where value is realized. Identifying taxable events in cryptocurrency is essential for accurate reporting.Taxable Crypto Transactions

• Selling Crypto for Fiat: Converting BTC to USD on exchanges like Coinbase realizes capital gains based on the difference between sale price and cost basis.
• Crypto-to-Crypto Trades: Swapping altcoins (e.g., ETH for USDT on Uniswap) is taxable, using fair market value (FMV) at the trade time.
• Using Crypto for Purchases: Spending crypto via payment processors like BitPay triggers taxes on appreciation.
• Mining and Staking Rewards: Income from proof-of-work (PoW) mining or proof-of-stake (PoS) staking is ordinary income at FMV upon receipt, plus self-employment taxes if it's a business.
• DeFi Yields and Airdrops: Earnings from yield farming on Aave or free airdrops are taxable as ordinary income when controllable.
• NFT Sales and Royalties: Disposing of NFTs or receiving creator royalties incurs capital gains or ordinary income taxes, with blockchain metadata aiding valuation.

Non-Taxable Crypto Activities

• Buying Crypto with Fiat: Acquiring with USD isn't taxable—it's establishing a cost basis.
• Holding (HODLing): Storing in hardware wallets like Trezor doesn't trigger taxes until sale.
• Wallet Transfers: Self-transfers between wallets (e.g., exchange to personal) are non-taxable.
• Gifting Crypto: Gifts under $18,000 (2025 annual exclusion) are exempt, but large gifts may require Form 709.

Tech tip: Use explorers like Blockchain.com to track transaction IDs. Financially, hold assets over a year to qualify for lower long-term rates, a key strategy in volatile markets.Calculating Your Crypto Taxes: Methods and FormulasHow to calculate crypto taxes in the US requires tracking cost basis and gains. The IRS allows FIFO (First-In-First-Out), LIFO (Last-In-First-Out), or Specific Identification, but consistency is key.Step-by-Step Calculation

1. Establish Cost Basis: Include purchase price plus fees (e.g., gas fees on Ethereum) in USD, using historical rates from APIs like CoinGecko.
2. Determine FMV: Use USD value at the exact time of disposition from reputable sources.
3. Compute Gains/Losses: Gain = FMV - Adjusted cost basis. Short-term (<1 year) taxed at ordinary rates; long-term (>1 year) at preferential rates.
4. Offset and Carry Forward: Losses offset gains; excess can offset up to $3,000 of ordinary income, with unlimited carryforward.

Example: Bought 1 BTC for $40,000 in 2024; sold for $60,000 in 2025 after holding >1 year. Long-term gain = $20,000. Tax at 15% (assuming bracket) = $3,000.Advanced tech: Integrate exchange APIs with scripts in Python (using libraries like pandas) for automated FIFO calculations. For 2026 filings (2025 taxes), brokers will report gross proceeds on 1099-DA; basis reporting starts for 2026 acquisitions.Alternative Strategies

• Wash Sale Rule: Doesn't apply to crypto, allowing immediate repurchases after losses.
• Like-Kind Exchanges: No longer valid post-2017 TCJA.
• Donations: Donate appreciated crypto to charities for FMV deductions without realizing gains.

Financial optimization: Use Specific ID to select high-basis lots, minimizing taxable gains in high-volatility assets.Tax Rates, Exemptions, and Additional Levies in 2026For tax year 2025 (filed in 2026):

• Short-Term Capital Gains: Taxed as ordinary income (10-37% based on brackets).
• Long-Term Capital Gains: 0%, 15%, or 20% depending on income (e.g., 0% for singles under $47,025).
• Net Investment Income Tax (NIIT): 3.8% on gains if MAGI exceeds $200,000 (single).
• Self-Employment Tax: Up to 15.3% on mining/staking if considered a trade.
• State Taxes: Vary; e.g., California taxes as income (up to 13.3%), while states like Texas have no income tax.

No federal VAT on crypto, but sales tax may apply to certain transactions. For non-residents, US-sourced crypto income may be taxable.

Filing Status	Short-Term Rates (Ordinary Income)	Long-Term Rates
Single	10-37%	0-20%
Married Joint	10-37%	0-20%

Reporting and Filing Crypto Taxes in the US: Forms and DeadlinesHow to report cryptocurrency taxes in the US is self-reported, with increased scrutiny via 1099 forms.Key Forms

• Form 8949: Detail each transaction's gains/losses.
• Schedule D: Summarize totals for Form 1040.
• Form 1040 Schedule 1: Report crypto income (e.g., mining).
• Form 1099-DA: New for 2025 sales; brokers like Coinbase report gross proceeds (basis added for 2026+).

Filing Deadlines

• Individual Returns: April 15, 2026 (for 2025 taxes); extensions to October 15.
• Estimated Payments: Quarterly if expecting >$1,000 owed.

Tech tool: E-file via IRS Free File or software with digital signatures. Financial advice: Hire a CPA for complex DeFi activities to avoid audits.Best Tools and Software for Crypto Tax Management in the USHarness technology for crypto tax software in the US. These integrate with blockchains and wallets for seamless compliance.

Tool	Features	Pricing	US-Specific
CoinLedger	API sync, 1099-DA support, loss harvesting	$49-$299/year	Yes, IRS forms export
TokenTax	DeFi analytics, NFT tracking	$65-$3,500/year	Handles NIIT calculations
TurboTax Crypto	Integrated filing, airdrop valuation	$0-$89	Direct IRS e-file
Koinly	Multi-chain support, FIFO/LIFO options	€49-€199/year	US tax reports

Money tip: Simulate scenarios to optimize for long-term rates, potentially saving thousands.Advanced Topics: Tech Innovations and Financial Strategies

• Blockchain Analytics: Use tools like Dune for DeFi transaction logs.
• DeFi Tax Nuances: Track impermanent losses in liquidity pools; IRS may classify some yields as ordinary income.
• Tax Optimization: Relocate to low-tax states or use Roth IRAs for crypto (if eligible).
• 2026 Updates: With 1099-DA basis reporting, expect easier compliance but stricter enforcement; prepare for potential stablecoin regs.

For expats, FATCA requires reporting foreign holdings over $50,000.Conclusion: Navigating Crypto Taxes for Optimal Financial OutcomesTackling crypto taxes in the US 2026 combines blockchain tech with savvy financial planning. By grasping how to pay taxes on cryptocurrency, leveraging advanced tools, and employing strategies like long-term holding, you can minimize taxes and enhance gains. Stay ahead with IRS.gov updates, as regulations evolve. For tailored guidance, consult tax professionals—empower your crypto journey in this decentralized financial revolution.This guide arms you with essentials for cryptocurrency taxation in the US. Verify with official sources for the latest.

By Michelle Legge • Head of Crypto Tax Education

Updated Jan 6, 2026

This article has been fact checked and reviewed as per our editorial policy.

Singapore Crypto Tax Guide 2026

Our Singapore Crypto Tax guide covers everything you need to know about the tax rules in Singapore, including capital gains, business income, and more.

• Singapore is a very crypto tax-friendly country, as there is no Capital Gains Tax for individual investors.

• However, if you’re trading crypto frequently and at scale, your profits may be considered business income.

• Income Tax applies to business income, as well as crypto received as payment for goods and services.

• Any taxable income from crypto must be reported by April 18 each year.

This guide is regularly updated...

Is crypto taxed in Singapore?

For individual investors, there is no capital gains tax or income tax on crypto, making Singapore one of the most tax-friendly countries in the world.

How much tax do you pay on crypto in Singapore?

Individual investors pay no tax on profits from crypto. Meanwhile, profits from professional trading may be considered business income and taxed at up to 24%.

Additionally, an 8% Goods and Services Tax (GST) may apply on fees when you purchase, sell, or trade cryptocurrencies that are not officially classed as digital payment tokens.

How is crypto taxed in Singapore?

Tax on crypto in Singapore depends on whether you’re an individual investor or a trader with business income, as well as the type of token you’re investing in.

Individual investors pay no tax on profits, but if you’re investing like a trader, for example, with frequent short-term profits, this may be classed as business income and subject to tax.

As well as this, an 8% GST may apply to transaction fees on cryptocurrencies that are not classed as digital payment tokens.

It can all get a little convoluted, so let’s break it down.

Capital gains vs. business income

Profits from your trading activity may be classed as income, even if you don’t have a business entity set up.

The Inland Revenue Authority of Singapore (IRAS) may classify profits as business income when your activities extend past personal investment. This is decided on a case-by-case basis, but the IRAS looks at several factors to decide this, including:

• The frequency and volume of your trading activity.

• The holding period of your assets.

• The organisation of your trades.

• Supplementary work, such as marketing efforts.

• The intention behind purchases.

In summary, if you’re holding for long periods and trading infrequently, your profits will likely be tax-free as an individual investor. Whereas if you’re trading short-term frequently, at volume, and in a structured manner with an intent to make a profit, your profits may be taxable business income. 

You should speak to an experienced crypto accountant in Singapore for advice on your individual circumstances.

Tax rates on business income

If you do have taxable business income, your tax rate varies depending on whether you’re a resident or non-resident. Residents will pay up to 24% depending on their total annual income:

Taxable Income (SGD)	Tax Rate
Up to $20,000	0%
$20,001 – $30,000	2%
$30,001 – $40,000	3.5%
$40,001 – $80,000	7%
$80,001 – $120,000	11.5%
$120,001 – $160,000	15%
$160,001 – $200,000	18%
$200,001 – $240,000	19%
$240,001 – $280,000	19.5%
$280,001 – $320,000	20%
$320,001 – $500,000	22%
$500,001 – $1,000,000	23%
Over $1,000,000	24%

If you’re not a resident, most of your income is taxed at 24%. If it’s a regular job salary, it can be taxed at 15% flat or the same way as residents (with deductions), whichever gives the government more tax. If you’re a non-resident director, you don’t get the lower rate; 24% tax is taken straight out of your director’s pay.

Tokens and GST

For digital payment tokens (DPTs) like Bitcoin, Ether, Litecoin, Ripple, and so on, since January 2020, buying, selling, or swapping them is exempt from GST. That means if you trade DPTs for other DPTs, or convert them into dollars, there’s no GST. 

However, for other tokens, not classed officially as digital payment tokens, an 8% GST may apply on transaction fees.

How are different transactions taxed in Singapore?

With the basics out of the way, let’s take a look at how some common crypto transactions may be taxed.

Buying, holding, transferring

Tax-free. However, 8% GST may apply to crypto transaction fees where tokens are not classed as digital payment tokens.

Selling

Tax-free for individual investors. 8% GST may apply to fees for non-digital payment tokens. Income Tax if profits are categorized as business income.

Trading

Tax-free for individual investors. 8% GST may apply to fees for non-digital payment tokens. Income Tax if profits are categorized as business income.

Spending

Buying something with cryptocurrency is tax-free in Singapore. GST may apply to fees depending on the type of token. GST may apply to the goods themselves.

Mining rewards

Mining rewards for hobby miners will generally be tax-free upon receipt and if later sold.

For those mining crypto as a business, profits will be classed as business income and subject to Income Tax.

Staking rewards

If you earn more than $300 (SGD) annually, your staking rewards will likely be subject to Income Tax.

Lending interest

If you earn more than $300 (SGD) annually, any interest or rewards from lending crypto will likely be subject to Income Tax.

Are crypto losses tax-deductible?

Just as capital gains or income from crypto are not taxable in Singapore, losses are not deductible. 

If you’re running a business, you may be able to deduct crypto losses against income.

How to report crypto on taxes in Singapore

If you have income from crypto, you’re required to report it on your tax return, whether you’re a resident or non-resident.

In Singapore, the financial year is the same as the calendar year (January 1 to December 31), so you’ll report income from this period in your tax return. The deadline to file is April 15 for paper filing and April 18 for e-filing.

To file, you need to group all your crypto transactions into two categories:

• Crypto used for money, goods, or services

• Crypto investment gains

You can see the applicable forms you may need on the IRAS site.

How a crypto tax calculator like Koinly can help…

Koinly is a crypto tax calculator that can help you calculate your gains, losses, income, and more, as well as generate tax forms, to help you easily file with the IRAS, or to hand over to your accountant. 

Koinly supports more than 900+ exchanges, wallets, and blockchains to make importing your transaction data easy and supports SGD, as well as all common accounting methods.

Source of the article Koinly 

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