Crypto tax calculator (US federal)
Short-term vs long-term. A 365-day hold can cut your tax bill in half.
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Crypto held under a year in the US is taxed as ordinary income — federal brackets up to 37%. Hold 366 days or more and you drop to long-term capital gains: 0%, 15%, or 20%. On a $50,000 gain in the 24% bracket, waiting one extra day saves you $4,500 in federal tax.
This calculator uses the 2024/2025 IRS brackets, accounts for your other income stacking under the gain, and shows effective rate and net after tax. It's federal only — state crypto tax ranges from 0% (Texas, Florida, Wyoming) to 13.3% (California).
The IRS has been explicit about crypto since 2014 Notice 2014-21: virtual currency is property, not currency. Every disposal — sale, swap, or spend — triggers a taxable event. The 2023 Revenue Ruling 2023-14 went further, confirming that staking rewards are taxable as ordinary income in the year received, not when sold. As crypto adoption grows, IRS enforcement grows with it. The agency received John Doe summonses against Coinbase, Kraken, and Circle to obtain user data. The assumption that small crypto transactions go undetected is no longer valid.
Starting in 2025, the IRS requires brokers (exchanges) to issue Form 1099-DA for crypto transactions, similar to Form 1099-B for stocks. Coinbase, Kraken, Gemini, and Binance.US will report your proceeds directly to the IRS. The 'per-wallet' accounting requirement means each wallet or exchange account tracks basis separately. If you moved BTC from Coinbase to a Ledger to Kraken, the transfer history needs to be clean so basis isn't lost in transit. This is the year to get your records in order if you haven't already.
$1,500 profit on BTC held 400 days, single filer making $85,000 salary
Holding period 400 days → long-term capital gains treatment.
Total income stack: $85,000 salary + $1,500 LTCG = $86,500.
Single-filer 2024 LTCG brackets: 0% up to $47,025, 15% to $518,900.
$1,500 falls in the 15% LTCG bracket → tax = $225.
Same $1,500 held only 300 days: taxed as ordinary income at 22% marginal → $330.
What counts as a taxable event
Every swap is taxable — USDC to ETH is a sale of USDC at fair market value. Sending crypto to pay for a coffee is a sale. Earning staking, airdrop, or yield-farm rewards is ordinary income at receipt value. Only three things are not taxable events: moving between your own wallets, buying with USD and holding, and gifting under the $18,000 annual exclusion (2024).
Cost basis methods: FIFO vs HIFO vs specific lot
FIFO (first in, first out) is the IRS default. HIFO (highest in, first out) usually minimizes current-year tax by selling the most expensive coins first. Specific lot identification gives you full control but requires clean records. Starting in 2025, the IRS requires 'per-wallet' accounting under the new broker rules (Form 1099-DA). Pick a method, document it, stay consistent within a tax year.
Tax-loss harvesting in crypto: the rules and the math
Tax-loss harvesting — selling a position at a loss to offset gains elsewhere — works in crypto and has an advantage over stocks: no wash-sale rule currently applies. You can sell ETH at a loss on December 30, book the loss, and rebuy ETH on December 31 without penalty. For stocks, the 30-day wash-sale rule would disallow that loss. Congress has proposed applying wash-sale rules to crypto multiple times; as of 2025, they haven't passed. Use this window while it's open.
The math on harvesting: if you have $20,000 in gains from selling BTC and $8,000 in unrealized losses on ETH, harvesting the ETH loss reduces your taxable gain to $12,000. In the 24% bracket, that's $1,920 in federal taxes saved. You immediately rebuy ETH at the lower cost basis, so your future gain will be larger when you sell — but you've deferred that tax bill and kept $1,920 in your pocket today.
Timing matters for harvesting. December is not the only window — any month with embedded losses can be harvested whenever a gain exists to offset. Active traders should scan their portfolio quarterly for positions down 10%+ and evaluate whether harvesting makes sense given the expected recovery timeline. The optimal harvest happens when you have short-term gains to offset, since short-term losses cancel short-term gains first (at ordinary income rates) before applying to long-term gains.
Estimated quarterly taxes for active crypto traders
If your crypto gains are expected to exceed $1,000 in annual tax liability and you don't have withholding covering it, the IRS expects quarterly estimated payments. Due dates are April 15, June 15, September 15, and January 15. Missing these triggers an underpayment penalty — currently 8% annualized on the shortfall. For a trader with $50,000 in short-term gains at 24%, that's $12,000 owed in estimated payments across the year.
The safe harbor rule protects you from underpayment penalties: pay 100% of last year's tax liability (110% if your AGI exceeded $150,000) in quarterly installments and you avoid penalties regardless of this year's actual liability. This is particularly useful when gains are unpredictable — make estimated payments based on prior-year tax, then settle the actual balance at filing. It's not optimal if you had a much larger gain year, but it prevents penalty exposure completely.
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Crypto tax — frequently asked questions
What if I trade one crypto for another — is that taxed?
Yes. Swapping ETH for SOL is two transactions for IRS purposes: a sale of ETH at fair market value, then a purchase of SOL. If you bought that ETH at $1,800 and swapped when it was $3,200, you owe tax on the $1,400 gain per ETH even though you never touched USD.
How do I handle lost access (forgotten seed, dead exchange)?
For FTX and similar exchange failures, you can claim a capital loss in the year the bankruptcy is finalized — not the year they collapsed. For a forgotten seed on self-custody, there's no clear IRS guidance; most CPAs treat it as 'worthless' but you need documentation showing the attempts to recover. Talk to a crypto-specialist CPA before filing.
Are stablecoin transactions taxed?
Yes. USDC to USDT is technically a taxable swap at FMV, but because both are pegged to $1 the gain/loss is usually pennies. You still need to report them. Interest earned on stablecoin lending (Aave, Nexo) is ordinary income.
What about NFT taxes?
NFT sales follow the same short-term/long-term rules. The twist: some NFTs (especially art) may be classified as 'collectibles' by the IRS, triggering a 28% long-term rate instead of 15-20%. Guidance is evolving; as of 2024 most NFTs are treated as regular property, but luxury/art NFTs may fall under the collectible bracket.
Do I owe state tax on crypto too?
Usually yes. Only a handful of states (TX, FL, NV, SD, WY, WA, TN, AK, NH) have no personal income tax. California taxes LTCG at ordinary rates up to 13.3%. New York stacks state (6.85% typical) and NYC resident (3.876%) on top. Always add your state rate to the federal number.
How accurate is a year-end calculator like this?
It's a gauge, not a return. Real tax software (Koinly, CoinTracker, CoinLedger) imports your transaction history, applies your chosen cost basis method per-lot, tracks short/long split, and generates IRS Form 8949. Use this calculator to plan scenarios; use tax software to actually file.
What happens if I received a crypto airdrop — do I owe tax on it?
Yes. Airdrops are ordinary income at fair market value on the date you receive them and have control over them. If you received 500 ARB tokens on the Arbitrum airdrop day at $1.20 each, you owe income tax on $600 regardless of whether you sold. Your cost basis in those tokens is $1.20, so any future sale above that price generates a capital gain on top of the income already reported.
Can I deduct crypto losses against regular income?
Capital losses offset capital gains dollar-for-dollar first. If losses exceed gains, you can deduct up to $3,000 against ordinary income per year. Remaining losses carry forward to future years indefinitely. Example: $15,000 in crypto losses, $5,000 in crypto gains — $10,000 net loss. Deduct $3,000 against salary income this year, carry $7,000 forward to offset future gains.
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