The amount of Capital Gains tax that you pay depends on your earnings and how long you have held your assets for. You need to determine if you have held your crypto for short-term or long-term. The holding period begins on the day after you acquired the virtual currency and ends on the day you sell or exchange.
Short Term
Cryptocurrency held for less than a year.
Taxed at the ordinary income tax rate (listed below for the 2021 and 2022 tax years).
2021 Tax Year (taxes due April 2022)
2022 Tax Year (taxes due April 2023)
Tax Rate
Single
Head of Household
Married Filing Jointly
Married Filing Separately
10%
$0 - $9,950
$0 - $14,200
$0 - $19,900$0 - $19,900
$0 - $9,950
12%
$9,951 - $40,525
$14,201 - $54,200
$19,901 - $81,050
$9,951 - $40,525
22%
$40,526 - $86,375
$54,201 - $86,350
$81,051 - $172,750
$40,526 - $86,375
24%
$86,376 - $164,925
$86,351 - $164,900
$172,751 - $329,850
$86,376 - $164,925
32%
$164,926 - $209,425
$164,901 - $209,400
$329,851 - $418,850
$164,926 - $209,425
35%
$209,426 - $523,600
$209,401 - $523,600
$418,851 - $628,300
$209,426 - $314,150
37%
$523,601+
$523,601+
$628,301+
$314,151+
10%
$0 - $10,275
$0 - $14,650
$0 - $20,550
$0 - $10,275
12%
$10,276 - $41,775
$14,651 - $55,900
$20,551 - $83,550
$10,276 - $41,775
22%
$41,776 - $89,075
$55,901 - $89,050
$83,551 - $178,150
$41,776 - $89,075
24%
$89,076 - $170,050
$89,051 - $170,050
$178,151 - $340,100
$89,076 - $170,050
32%
$170,051 - $215,950
$170,051 - $215,950
$340,101 - $431,900
$170,051 - $215,950
35%
$215,951 - $539,900
$215,951 - $539,900
$431,901 - $647,850
$215,951 - $323,925
37%
$539,901+
$539,901+
$647,851+
$323,926+
Long Term
Cryptocurrency sold after one year.
The tax rate is 0%, 15%, or 20% dependent on income.
The long term capital gains tax rate is often better than the short term rate so it can sometimes be beneficial to hold crypto for at least a year before disposing of it.
2021 Tax Year (taxes due April 2022)
2022 Tax Year (taxes due April 2023)
0%
Up to $40,400
Up to $54,100
Up to $80,800
Up to $40,400
15%
$40,401 - $445,850
$54,101 – $473,750
$80,801 – $501,600
$40,401 - $250,800
20%
$445,850+
Over $473,750
Over $501,600
$250,800+
Tax Rate
Single
Head of Household
Married Filing Jointly
Married Filing Separately
0%
Up to $41,675
Up to $55,800
Up to $83,350
Up to $41,675
15%
$41,676 – $459,750
$55,801 – $488,500
$83,351 – $517,200
$41,676 – $258,600
20%
Over $459,750
Over $488,500
Over $517,200
Over $258,600
Income Tax
Your rate of income tax (tax bracket) depends on your taxable income and your filing status. The United States has a progressive tax system, meaning people with higher taxable incomes pay higher federal income tax rates.
Income tax rates for 2021
Single
Head of Household
Married Filing Jointly
Married Filing Separately
10%
$0 to $9,950
10% of taxable income
12%
$9,951 to $40,525
$995 plus 12% of the amount over $9,950
22%
$40,526 to $86,375
$4,664 plus 22% of the amount over $40,525
24%
$86,376 to $164,925
$14,751 plus 24% of the amount over $86,375
32%
$164,926 to $209,425
$33,603 plus 32% of the amount over $164,925
35%
$209,426 to $523,600
$47,843 plus 35% of the amount over $209,425
37%
$523,601 or more
$157,804.25 plus 37% of the amount over $523,600
10%
$0 to $14,200
10% of taxable income
12%
$14,201 to $54,200
$1,420 plus 12% of the amount over $14,200
22%
$54,201 to $86,350
$6,220 plus 22% of the amount over $54,200
24%
$86,351 to $164,900
$13,293 plus 24% of the amount over $86,350
32%
$164,901 to $209,400
$32,145 plus 32% of the amount over $164,900
35%
$209,401 to $523,600
$46,385 plus 35% of the amount over $209,400
37%
$523,601 or more
$156,355 plus 37% of the amount over $523,600
10%
$0 to $19,900
10% of taxable income
12%
$19,901 to $81,050
$1,990 plus 12% of the amount over $19,900
22%
$81,051 to $172,750
$9,328 plus 22% of the amount over $81,050
24%
$172,751 to $329,850
$29,502 plus 24% of the amount over $172,750
32%
$329,851 to $418,850
$67,206 plus 32% of the amount over $329,850
35%
$418,851 to $628,300
$95,686 plus 35% of the amount over $418,850
37%
$628,301 or more
$168,993.50 plus 37% of the amount over $628,300
10%
$0 to $9,950
10% of taxable income
12%
$9,951 to $40,525
$995 plus 12% of the amount over $9,950
22%
$40,526 to $86,375
$4,664 plus 22% of the amount over $40,525
24%
$86,376 to $164,925
$14,751 plus 24% of the amount over $86,375
32%
$164,926 to $209,425
$33,603 plus 32% of the amount over $164,925
35%
$209,426 to $314,150
$47,843 plus 35% of the amount over $209,425
37%
$314,151 or more
$84,496.75 plus 37% of the amount over $314,150
You won't pay the same tax rate on your entire income, you will be taxed at the corresponding tax rate for your earnings within each bracket.
Example: Sam is a single filer with $45,000 taxable income, therefore she is in the 22% tax bracket. She pays:
10% on the first $9,950,
12% on the earnings between $9,951 to $40,525
22% on the rest.
Which filing status applies to me?
If you are unsure of your filing status follow the below link for IRS guidance:
Publication 501 (2021), Dependents, Standard Deduction, and Filing Information | Internal Revenue Service