Do you pay tax on crypto? A plain-English guide
By CryptoScoopDaily · Updated June 2026 · US tax rules
Yes — but only when something actually happens. In the US, you owe tax when you sell, trade, spend, or earn crypto. Just buying it and holding it isn't taxed, and neither is moving it between your own wallets. The trick is knowing which actions count.
When you DO owe tax
These are "taxable events":
- Selling crypto for cash — you're taxed on the profit (or you can claim a loss).
- Trading one crypto for another — yes, swapping BTC for ETH counts as a sale.
- Spending crypto — paying for something with crypto is treated like selling it.
- Earning crypto — staking, mining, airdrops, DePIN rewards, or getting paid in crypto are taxed as income.
When you DON'T
- Buying and holding — no tax until you do something with it.
- Moving crypto between your own wallets — that's not a sale.
- Receiving a gift (within limits) — though selling it later may be taxable.
How much? The 2026 rates
Two things decide your rate: how long you held it, and how you got it.
- Held a year or less, then sold: profit is taxed as ordinary income — 10% to 37% depending on your bracket.
- Held more than a year, then sold: you get the lower long-term rates — 0%, 15%, or 20%.
- Crypto you earned: taxed as income at its dollar value the day you received it (then capital gains apply if you later sell it for more).
So holding for over a year before selling can meaningfully cut your tax bill.
When do you actually pay?
Not at the moment of each trade — you report everything on your tax return for that year. Sold or earned crypto in 2025? It goes on the return you file by April 15, 2026 (or October with an extension, though you still pay by April).
What changed: the 1099-DA
Starting with the 2025 tax year, US exchanges now report your crypto sales to the IRS on a new form, the 1099-DA — and from 2026 they'll report your cost basis too. In plain terms: assume the IRS can see your exchange activity, and report it. Mismatches between what they have and what you file are what trigger letters.
The easy way to handle it
If you have more than a handful of transactions, doing this by hand is painful. Crypto tax software connects to your wallets and exchanges, works out every gain and loss, and produces a report you can file. We compared the main options here:
A few honest caveats
- This covers the United States. Other countries do it differently.
- Your bracket, state, and situation change the details.
- We're not accountants, and this isn't tax advice — for anything complex, talk to a professional.
FAQ
No — in the US, simply buying and holding crypto isn't taxed, and moving it between your own wallets isn't either. You owe tax when you sell, trade one coin for another, spend it, or earn it.
It depends on how long you held it. Sell within a year and the profit is taxed as ordinary income (10%–37%). Hold more than a year and you get the lower long-term capital gains rates of 0%, 15%, or 20%. Crypto you earn is taxed as income at its value when you received it.
When you file your tax return for that year. Anything you sold or earned in 2025 goes on the return you file by April 15, 2026. You don't pay at the moment of each trade — you report it all at tax time.
Increasingly, yes. As of the 2025 tax year, US exchanges report your sales to the IRS on a new form called the 1099-DA, and from 2026 they'll report your cost basis too. Assume your exchange activity is visible and report it.
General information for the US, not tax advice. Consult a qualified professional for your situation.
Sources: IRS — Digital Assets · NerdWallet — crypto tax rates 2026 · CoinLedger — crypto tax rates 2026