Crypto tax calculator – TaxScouts (2024)

FAQs

How do I calculate my crypto tax? ›

The total Capital Gains Tax you owe from trading crypto depends on how much you earn overall every year (i.e. your salary, or total self-employed income plus any other earnings). This number determines how much of your crypto profit is taxed at 10% or 20%. Our capital gains tax rates guide explains this in more detail.

Crypto Tax Calculator has layers of technical and operational controls such as antivirus, penetration testing and vulnerability scanning to protect all user information. Our application allows you to delete all imported data (and associated wallet/exchange information) at any time for any reason.

US taxpayers must report any profits or losses from trading cryptocurrency and any income earned from activities like mining or staking on tax return forms, such as Form 1040 or 8949. Not reporting can result in fines and penalties as high as $100,000 or more severe consequences, including up to five years in prison.

At first glance, the formula for crypto cost basis is simple: Total Purchase Price divided by Number of Tokens. For example, let's say you paid $500 for 10 AAVE tokens. $500 / 10 = a cost basis of $50 per token.

What affects your crypto taxes? For US taxpayers, the key factor affecting tax on crypto gains is whether a profit was realized in the short or long term. Long-term tax rates on profits from tokens held for a year or longer peak at 20%, whereas short-term capital gains are taxed at the same rate as income: 10-37%.

You must report ordinary income from virtual currency on Form 1040, U.S. Individual Tax Return, Form 1040-SS, Form 1040-NR, or Form 1040, Schedule 1, Additional Income and Adjustments to IncomePDF, as applicable.

The IRS treats cryptocurrencies as property for tax purposes, which means: You pay taxes on cryptocurrency if you sell or use your crypto in a transaction, and it is worth more than it was when you purchased it. This is because you trigger capital gains or losses if its market value has changed.

FIFO is considered the 'default' accounting method. As a result, it's the method used by most investors to calculate their capital gains. If the price of your cryptocurrency has dropped since you first purchased it, using FIFO may help you reduce your capital gains.

Is cryptotaxcalculator free? ›

The platform is free to use immediately upon signup, allowing you to import your transactions and take advantage of our smart suggestion and auto-categorization engine, portfolio tracking, DeFi and NFT support.

Is it necessary to report crypto transactions under $600? US taxpayers must report every crypto capital gain or loss and crypto earned as income, regardless of the amount, on their taxes.

As long as you hold digital assets you purchased with fiat currency without converting them into cash or other crypto, you are not required to report or pay taxes on any potential gains to the IRS. However, when you sell your cryptocurrency, there are tax consequences.

In the U.S., crypto is considered a digital asset, and the IRS treats it generally like stocks, bonds, and other capital assets. Like these assets, the money you gain from crypto is taxed at different rates, either as capital gains or as income, depending on how you got your crypto and how long you held on to it.

Which crypto exchanges do not report to the IRS? Currently, centralized exchanges like KuCoin and decentralized exchanges like Uniswap do not collect KYC (Know Your Customer) information from users.

The IRS treats cryptocurrency as “property.” If you buy, sell or exchange cryptocurrency, you're likely on the hook for paying crypto taxes. Reporting your crypto activity requires using Form 1040 Schedule D as your crypto tax form to reconcile your capital gains and losses and Form 8949 if necessary.

How to Calculate Crypto Losses. To calculate your crypto capital loss, you use the same formula you would for calculating crypto gains: Proceeds - cost basis = capital loss.

When you reinvest your cryptocurrency, you are essentially selling one type of crypto and purchasing another. This is considered a taxable event, even if you do not cash out to fiat currency.