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Is crypto mining taxable? How to file taxes?

If you receive cryptocurrency payments, you may also be subject to tax. As the regulatory framework for taxation of cryptocurrencies varies from country to country, it is recommended to consult local tax professionals.

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In many countries, cryptocurrencies must be taxed. Trading, spending or selling cryptocurrencies are generally taxable events. Capital gains and losses must be taken into account when taxes and dues are calculated. If you receive cryptocurrency payments, you may also be subject to tax. As the regulatory framework for taxation of cryptocurrencies varies from country to country, it is recommended to consult local tax professionals.

This article focuses on how cryptocurrency mining is taxed in the United States, and you need to understand the IRS's guidance on mining income in detail. The IRS first published its guidelines on taxation of cryptocurrencies in 2019 and clarified how taxes from the mining industry should be filed.

One key point to note is that cryptocurrency mining rewards should be taxed when they are collected, not when they are sold. Each time crypto miners receive cryptocurrency from mining in their wallets, they should declare the market price as a cost basis for reporting total revenue. When you successfully mine a cryptocurrency, you trigger a taxable event. General income tax rates range from 10% to 37%, depending on your tax bracket.

If you're only mining the occasional passive income on a computer, you should report your income as an income from hobby. The IRS will treat your profits as general income and you will be taxed at the same rate as any other source of income. You will report this income as “other income” in IRS Form 1040 Schedule 1.

 If crypto mining is your primary income and you own a crypto mining rack and operate multiple professional mining machines, then you should report your income as a “business” in IRS Form 1040 Schedule C.

If you think it’s burdensome in filing your taxes, you can also use crypto tax software to simplify filing your taxes for mined cryptocurrencies.    

BTC
Shut Down
Issue amount 21000000
24 hours volume 998.36K
24 hours turnover $ 25.98B
Market Direction Short
Panic Index 72 (Greed)
Swap Rate 4.88%
Market Value Proportion 47.78%
market value $ 4,588.67 x 100 million
24 hour increase -1.06%
Computing power 484.90 EH/s
daily output 0.00000185 BTC / T
Halving time

The public chain will have a halving cycle to maintain the value of the currency, and the market will rise sharply after halving in history.

Completed
Earnings volatility

The computing power of the entire network is due to the increase and decrease of mining machines, which affects the average distribution of revenue. If the computing power decreases, the average revenue will increase, and if the computing power increases, the average revenue decreases.

0%
LTC
Shut Down
Issue amount 84000000
24 hours volume 9.53M
24 hours turnover $ 711.36M
Market Direction Short
Swap Rate 12.90%
Market Value Proportion 0.38%
market value $ 30.15 x 100 million
24 hour increase -0.59%
Computing power 829.78 TH/s
daily output 0.00000427 LTC / M
Halving time

The public chain will have a halving cycle to maintain the value of the currency, and the market will rise sharply after halving in history.

No halving expected
Earnings volatility

The computing power of the entire network is due to the increase and decrease of mining machines, which affects the average distribution of revenue. If the computing power decreases, the average revenue will increase, and if the computing power increases, the average revenue decreases.

0%
BCH
Shut Down
Issue amount 21000000
24 hours volume 2.62M
24 hours turnover $ 308.54M
Market Direction Short
Swap Rate 13.63%
Market Value Proportion 0.21%
market value $ 25.37 x 100 million
24 hour increase 0.26%
Computing power 2.18 EH/s
daily output 0.00033036 BCH / T
Halving time

The public chain will have a halving cycle to maintain the value of the currency, and the market will rise sharply after halving in history.

Completed
Earnings volatility

The computing power of the entire network is due to the increase and decrease of mining machines, which affects the average distribution of revenue. If the computing power decreases, the average revenue will increase, and if the computing power increases, the average revenue decreases.

0%
FIL
Shut Down
Issue amount 2000000000
24 hours volume 84.61M
24 hours turnover $ 397.36M
Market Direction Short
Swap Rate 17.90%
Market Value Proportion 0.14%
market value $ 46.38 x 100 million
24 hour increase 0.65%
Computing power 22.63EiB
daily output 0.00579263 FIL / TiB
Halving time

The public chain will have a halving cycle to maintain the value of the currency, and the market will rise sharply after halving in history.

No halving expected
Earnings volatility

The computing power of the entire network is due to the increase and decrease of mining machines, which affects the average distribution of revenue. If the computing power decreases, the average revenue will increase, and if the computing power increases, the average revenue decreases.

0%
XCH
Shut Down
Issue amount 21410000
24 hours volume 467.66K
24 hours turnover $ 12.09M
Market Direction Long
Swap Rate 17.32%
Market Value Proportion 0.01%
market value $ 3.00 x 100 million
24 hour increase -2.69%
Computing power 14912.60839843 PiB
daily output 0.00024269 XCH / TiB
Halving time

The public chain will have a halving cycle to maintain the value of the currency, and the market will rise sharply after halving in history.

No halving expected
Earnings volatility

The computing power of the entire network is due to the increase and decrease of mining machines, which affects the average distribution of revenue. If the computing power decreases, the average revenue will increase, and if the computing power increases, the average revenue decreases.

0%
ETC
Shut Down
Issue amount 210700000
24 hours volume 31.82M
24 hours turnover $ 799.17M
Market Direction Short
Swap Rate 23.14%
Market Value Proportion 0.33%
market value $ 21.00 x 100 million
24 hour increase -0.80%
Computing power 152.16 TH/s
daily output 0.00010720 ETC / M
Halving time

The public chain will have a halving cycle to maintain the value of the currency, and the market will rise sharply after halving in history.

No halving expected
Earnings volatility

The computing power of the entire network is due to the increase and decrease of mining machines, which affects the average distribution of revenue. If the computing power decreases, the average revenue will increase, and if the computing power increases, the average revenue decreases.

0%
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