Fill out your cryptocurrency tax forms with pdfFiller
If you receive income from trading, receiving, or mining cryptocurrencies such as Bitcoin, Ethereum,
and others, you are required to report it in your income tax return and pay taxes on the crypto profit.
The IRS considers cryptocurrency a capital asset, meaning that taxpayers should report crypto gains
and losses the same way as stocks and funds.
This page is for informative purposes only and does not constitute tax or legal advice.
When to report crypto income to the IRS
The amount of taxes you pay on cryptocurrency depends on how much money you gain from trading it. Let’s find out what kind of cryptocurrency activity you should report to the IRS.
Buying services and goods with cryptocurrency
Trading one cryptocurrency for another
Selling cryptocurrency for money
Acquiring cryptocurrency by mining
What are the long-term
capital gain tax rates for 2022?
Find out how much you have to pay in taxes depending on your filing status and overall taxable income*.
| Filing status | 0% | 15% | 20% |
|---|---|---|---|
| Single | Up to $41,675 | $41,676 to $459,750 | Over $459,750 |
| Head of household | Up to $55,800 | $55,801 to $488,500 | Over $488,500 |
| Married filing jointly | Up to $83,350 | $83,351 to $517,200 | Over $517,200 |
| Married filing separately | Up to $41,675 | $41,676 to $258,600 | Over $258,600 |
* Source: Internal Revenue Service
Other cryptocurrency tax forms you may need to complete
Below are brief instructions on how to quickly fill out your Form 8949 with pdfFiller
1. Click ADD NEW > Forms & Applications and enter the name of an IRS crypto tax form in the search bar.
2. Select the version of the form you need and click Fill Online to open the form in the pdfFiller editor.
3. Enter detailed information about your short- and long-term cryptocurrency trades made during the tax year. Follow the fillable fields wizard to move from one field to another (or press Enter).
4. Once Form 8949 is complete, click DONE in the top right-hand corner and select what you’d like to do with the form.
How to report and pay your crypto taxes hassle-free
Paying taxes on your cryptocurrency profit is inevitable, but we have some tips on how to lessen your burden and think a few steps ahead.
1. Track all of your transactions
Write down all your cryptocurrency transactions with details such as the day of purchase and sale, recipient, and price. Spend a few minutes and save tons of time when filling out your tax returns.
2. Fill out the cryptocurrency tax form online
Use pdfFiller’s online PDF software to complete, sign, share, and securely store your tax forms on any device. Get polished and error-free forms for a seamless tax filing process. And don’t forget to browse
the library of 35 million fillable forms.
3. Hold your cryptocurrency for the long term
If you sell your cryptocurrency after at least one year of obtaining it, your gains are subject to a preferential long-term capital gains rate. This rate may significantly reduce your income taxes.
4. Claim expenses for crypto mining
You can deduct expenses on electricity, computers, servers, and internet providers against your cryptocurrency profit. But remember that the sum of the deduction depends on whether cryptocurrency mining is your hobby or business.
5. Donate to charity
If you’d like to decrease your tax rate and share your crypto income, donate part of your cryptocurrency to charity organizations. In this case, your crypto profit is fully tax-deductible.
Cryptocurrency mining & NFT selling: a brief guide to reporting your taxes
According to a recent poll carried out by CNBC, every fifth US citizen has invested in, traded, or used cryptocurrency. At the same time, NFT sales hit a record
$2.5 billion in the first half of 2021. These figures prove that these technologies are gaining momentum.
If you’re one of the people that are already reaping the benefits of crypto mining or NFT trading, you’re probably
wondering how your activity can impact your taxes.
Let’s find out.
ABCs of crypto mining reporting
Let’s review the essential information you need to know to report your mining activity. Please note our
guide is created for informative purposes only and does not provide tax advice.
Do you pay taxes on mining crypto?
Yes. Cryptocurrency activity is subject to federal income tax unless it falls under the category of non-taxable
events, such as donating crypto to a qualified charity, giving it as a gift, etc. Depending on the nature of what
you’re involved in, crypto mining can be taxed as income or capital gains.
As income: This is when you receive payment in crypto, exchange it for goods or services, mine it, receive crypto rewards from the blockchain (staking) as an incentive, receive new cryptocurrencies after a hard fork or via airdrop, etc. You must pay tax at your standard income tax rate on the entire fair market value of the crypto at the time you received it.
As capital gains: This is when the value of the crypto you mined or earned increases, and you make a profit from it. If you, for instance, sell mining rewards later, you’ll incur capital gain or loss based on how the currency's value has changed. In that case, you must pay your capital gain tax.
How to report crypto mining on taxes
There’re two filing options possible when it comes to crypto mining. You can file it as:
A hobby (use the form Schedule 1): This applies when crypto mining is something you do for enjoyment without intending to make a profit.
A business (use the form Schedule C): This applies to miners who pursue it as a way to create personal income.
By choosing the latter option, you can take advantage of tax deductions. They include expenses on electricity,
hardware, space, etc. You can also visit this IRS page on “the difference between a hobby and a business for
tax purposes” to find out which category you fall under.
Quick NFT tax guide for beginners
NFT, short for a non-tangible token, is a digital asset. “Non-fungible” here means that it can’t be copied
because each token’s ownership certificate can be verified on the blockchain.
NFT-related transactions of all kinds are taxable in the USA. Depending on specific scenarios, they can be
treated as business income or capital gains. When it comes to NFTs, you can either be an investor or a creator.
If you’re an investor who sells NFTs for crypto or USD, buys it with crypto, or trades it for another NFT, you incur capital gain tax on the difference between what you bought it for and what you sold it for. How much you need to pay in taxes depends on how long you hold it, how the crypto’s value changed over time (if you used crypto), etc.
Forms used by investors to report NFT income: IRS Form 1040, IRS Form 8949, and IRS Schedule D (Capital Gains and Losses).
If you’re a creator who sells NFT, the money you earn from selling it is considered an income that is subject to federal, state, and self-employment taxes. It may also apply to the royalties you receive from the traded asset.
Forms used by creators for NFT sales tax reporting: Schedule C Form (use the income reported on Form 1099 provided by the NFT platform).
Wrapping up
Reporting taxes is a very nuanced endeavor when it comes to mining crypto and selling NFTs. Make sure to fully
research how to report crypto mining and get information on taxes applicable to NFTs, or get professional legal help.
Of course, you can also take advantage of pdfFiller to easily fill out, eSign, and securely store your tax
forms online. Try this solution today to enjoy a smoother filing process!