Crypto Taxes 2025: The Complete Guide: Rates & IRS Rules

What is the cryptocurrency tax rate?

The IRS treats every disposal of cryptocurrency (selling for dollars, swapping one coin for another, or using tokens at checkout) as a taxable event, while transfers between wallets you own remain tax-free. Profits on assets you held a year or less are “short-term” and fold into your ordinary income bracket, whereas coins kept longer qualify for preferential long-term capital-gains rates.

Crypto received for work, mining, staking, or airdrops is first taxed as ordinary income and later faces capital-gains rules when you sell it. Because so many activities create tax consequences, accurate cost-basis records and reliable software (like ours at TokenTax) are essential for a smooth filing.

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How is the crypto tax rate calculated?

The crypto tax rate calculation depends on two main factors: the asset’s holding period and the taxpayer’s total taxable income. Short-term gains from crypto held for a year or less are taxed at standard income tax rates ranging from 10-37% based on income. Long-term gains from crypto held over a year are taxed at lower rates, usually between 0% and 20%.

Additional factors, like receiving crypto as payment or income from mining or staking, mean these earnings are taxed at ordinary income rates.

Short-term capital gains tax for crypto

For US taxpayers, short-term capital gains apply to crypto held for a year or less and are taxed as ordinary income. This can range from 10% to 37%, depending on total taxable income. For example, if you sell crypto at a gain within a year of purchase, it will be taxed at the same rate as your other income sources.

Short-term gains are generally higher than long-term rates, emphasizing the importance of strategic long-term holding for tax purposes.

Long-term capital gains tax for crypto

Long-term crypto gains apply when assets are held for over a year, offering lower tax rates, usually between 0% and 20%. This lower tax rate encourages long-term investment, as assets held longer than a year are not subject to the higher income tax brackets of short-term holdings, which are taxed like ordinary income. For example, if you sell Bitcoin after holding it for over a year, you’ll likely pay a reduced tax rate on the profits.

Use the charts below to find your capital gains tax bracket for crypto in 2024, for taxes due April 15 2025.

2024 Short-term capital gains brackets (taxes due in 2025)

2024 Long-term capital gains tax rates (taxes due in 2025)

– IRS

What crypto transactions are taxable?

Taxable crypto transactions include selling crypto for fiat, trading one cryptocurrency for another, and using crypto to purchase goods or services. Each of these events can generate taxable gains or losses, depending on the difference between the asset’s acquisition cost (cost basis) and sale price.

Here’s a thorough table of common taxable crypto events:

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See our expert picks of the best crypto loans.

Not taxable

Certain crypto activities are not considered taxable events. These include transferring crypto between personal wallets, holding assets without selling, and gifting crypto in some cases.

Learn how to reduce your crypto taxes.

Use our free crypto tax calculator in 2025

Planning your crypto taxes for 2025 has never been easier with TokenTax’s free crypto tax calculator. This crypto and Bitcoin tax calculator gives you a straightforward way to estimate your tax liabilities, whether you’re dealing with capital gains from Bitcoin or income from staking and mining.

You can get a quick overview of what you owe by inputting simple details like annual income, buy and sell prices, and transaction fees. The calculator also accounts for your state of residence and filing status, giving you tailored estimates based on your unique financial situation.

Use our free crypto tax calculator.

See our expert picks of the best crypto wallets.