Tax Rates for Cryptocurrency Explained

Andrew PerlinUpdated at: Sep 1st, 2021

This article is part of our crypto tax guide: Get help filing cryptocurrency taxes.

When your crypto gains are taxed, your cryptocurrency tax rate will be either your income tax rate or lower capital gains rates, depending on how long you held the crypto. Your holding period dictates whether you pay income tax rates or capital gains tax rates.

What are my cryptocurrency tax rates?

Your income from crypto transactions will be taxed as short-term gains if you held the asset for a year or less before disposing of it. The federal tax rate for short-term gains is the same as the tax rate for income; currently, it can range from 10% to 37%, depending on your total income.

If you hold the crypto for more than a year, then your profit from selling or disposing of it is considered a long-term capital gain. Long-term capital gains tax rates typically range from 0% to 20%, depending on your total income.

However, if your asset could be considered a collectible, you may be liable for the higher 28% collectibles capital gains tax rate.

Short term capital gains tax brackets (equal to your income tax rates)

Here are the federal income tax brackets in the United States for the 2020 tax year. These tax rates apply to short term capital gains (crypto or other capital assets held for less than 1 year). Note that this is the same as your ordinary income tax rate.

Tax rateSingle filerMarried filing jointlyMarried filing separatelyHead of household
10%$0 – $9,875$0 – $19,750$0 – $9,875$0 – $14,100
12%$9,876 – $40,125$19,751 – $80,250 $9,876 – $40,125$14,001 – $53,700
22%$40,126 – $85,525$80,251 – $171,050$40,126 – $85,525$53,701 – $85,500
24%$85,526 – $163,300$171,051 – $326,600$85,526 – $163,300$85,501 – $163,300
32%$163,301 – $207,350$326,601 – $414,700$163,301 – $207,350$163,301 – $207,350
35%$207,351 – $518,400$414,701 – $622,050$207,351 – $311,025$207,351 – $518,400
37%$518,401 and up$622,051 and up$311,026 and up$518,401 and up

Long term capital gains tax brackets

Here are the federal capital gains tax rates per income tax bracket in the United States for the 2020 tax year. These rates apply to long term capital gains (crypto or other assets held for more than 1 year).

Tax rateSingle filerMarried filing jointlyMarried filing separatelyHead of household
0%$0 – $40,000$0 – $80,000$0 – $40,000$0 – $53,600
15% $40,001 – $441,450$80,001 – $496,600$40,001 – $248,300 $53,601 – $469,050
20% $441,451 and up $496,601 and up $248,301 and up $469,051 and up

Cryptocurrency tax software calculates whether the crypto you are selling was held long or short term. You can also choose between different accounting methods like FIFO, LIFO, or Minimization. Our Minimization method works to defer tax lots to long term gains where possible where it produces the lowest tax liability via your tax rates. 

Related content

To stay up to date on the latest, follow TokenTax on Twitter @tokentax.

Learn how to save money on your crypto taxes

We’ll send you tips that smart investors use when filing their taxes

Calculate your crypto taxes now

TokenTax does the hard work so you don’t have to.