We can all agree that paying taxes is the least favorite part of investing in crypto. As we are entering a new year, let’s look at the US crypto tax rates for 2023 so that you know how much you owe to the IRS.
But before that, let’s quickly go over the basics.
How Cryptocurrency is Taxed?
In 2014, the IRS declared that crypto is treated as property. Though at that time, or ever since, the IRS never clarified how they would treat NFTs, from existing tax laws, we can safely assume that NFTs are also treated as property.
Trading one crypto for another, selling crypto for fiat or buying products or services with crypto are all taxable events since you’re disposing of your assets (crypto).
On realizing capital gains or losses, you have to report them on Form 8949.
Now that you know the US crypto tax rates of 2023, you might wanna know how you can minimize your taxes as much as possible. There are several tax-saving strategies that crypto investors, or as matter of fact, all investors use to reduce their overall taxes. Strategies like tax-loss harvesting, crypto donations, using different accounting methods, and so much more.
“I love filing taxes,” said no one. Not only because you’re paying your hard-earned money to the government but also because the process of filing taxes is really frustrating and exhausting.
But Bitcoin.Tax makes it easier. With Bitcoin.Tax, all you have to do is upload all the transactions from different exchanges and wallets you have been using and let the software take care of the rest. It will calculate all your capital gains, losses and other tax liabilities, plus so much more.