US Crypto Tax: What You Need to Know in 2025

When dealing with US crypto tax, the set of IRS rules that determine how cryptocurrency transactions are taxed in the United States. Also known as crypto tax compliance, it shapes how you report gains, losses, and foreign holdings. Another key piece is FBAR, a mandatory filing for any U.S. person who holds crypto assets abroad worth more than $10,000 at any point during the year. Finally, IRS Form 8949, the form used to list each capital‑gain transaction, connects directly to the overall tax picture. Understanding how these three pieces fit together lets you avoid penalties and stay on the right side of the law.

US crypto tax isn’t just a buzzword; it’s a practical framework that starts with determining your taxable events. Every trade, swap, or payment creates a capital‑gain event that the IRS treats like a stock sale. The key attributes are the acquisition cost (your basis), the fair market value at disposal, and the holding period, which decides whether the gain is short‑term (taxed as ordinary income) or long‑term (lower rates). In 2025 the threshold for reporting crypto‑related income remains $600, but the IRS is cracking down on under‑reported transactions, so accurate record‑keeping is essential.

FBAR reporting is a separate obligation that often trips newcomers. If you keep any crypto on foreign exchanges, wallets, or custodial services and the combined value exceeds $10,000 at any time, you must file FinCEN Form 114. Unlike the tax return, FBAR has a strict deadline of April 15 with an automatic extension to October 15. Failure to file can result in civil penalties up to $10,000 for non‑willful violations and far higher for willful ones. The connection to US crypto tax is direct: the same foreign holdings you disclose on the FBAR must also appear on your tax return, usually via Schedule D and Form 8949.

IRS Form 8949 acts as the ledger for every crypto transaction you made during the year. Each line captures the date you acquired the asset, the date you disposed of it, the proceeds, the cost basis, and the resulting gain or loss. When you have dozens of trades, the form can quickly become unwieldy. That’s why many taxpayers rely on software to generate a consolidated 8949 that feeds straight into Schedule D. The form also lets you flag adjustments, such as wash‑sale rules or crypto‑specific deductions, ensuring the final tax bill reflects the real economic outcome.

Speaking of software, crypto tax tools have matured dramatically. Platforms like CoinTracker, TokenTax, and TaxBit pull transaction data straight from exchanges, wallets, and DeFi protocols, then auto‑populate Form 8949 and Schedule D. They also calculate the cost basis using FIFO, LIFO, or specific‑identification methods, letting you choose the most tax‑efficient strategy. For miners, these tools can separate mining income (ordinary income) from held‑coins that later generate capital gains, keeping the two streams distinct on your return.

State tax considerations add another layer. While the federal government treats crypto uniformly, several states—California, New York, and Washington—have their own rules about whether crypto gains are subject to state income tax. If you live in a high‑tax state, the combined impact can significantly affect your net return. Moreover, if you earn crypto as salary or airdrops, those amounts are ordinary income at the fair market value on the receipt date, and they must be reported on Form 1040, line 1.

Recent regulatory updates in 2025 introduced a new Schedule C line for crypto‑related self‑employment income, acknowledging the rise of freelancers paid in Bitcoin or other tokens. The IRS also clarified that NFTs sold for profit are treated as capital assets, meaning the same short‑ or long‑term rules apply. Keeping an eye on these changes helps you adjust your filing strategy before the tax deadline hits.

Below you’ll find a curated set of articles that walk through each of these topics in detail. Whether you’re looking for a step‑by‑step FBAR guide, a deep dive into Form 8949, or reviews of the best tax software, the collection provides practical insights you can apply right away.