Crypto Tax Guide 2026 — What You Need to Know
Everything you need to know about crypto taxes in 2026 — rates, rules, calculators, and the best tax software compared.
Is Crypto Taxed?
Yes. In virtually every major jurisdiction, cryptocurrency is treated as property or an asset — not as currency. That means every time you sell, swap, or spend crypto, you may trigger a taxable event. Tax authorities including the IRS (US), HMRC (UK), ATO (Australia), and CRA (Canada) now require crypto gains to be reported on your annual return.
Since 2024, crypto exchanges and brokers in the US are required to issue 1099 forms to the IRS, making it harder than ever to fly under the radar. Most other countries have introduced similar reporting rules.
Taxable vs Non-Taxable Events
Not every crypto action creates a tax bill. Here's a quick reference:
| Action | Taxable? | Tax Type |
|---|---|---|
| Selling crypto for fiat (USD, GBP, etc.) | Yes | Capital Gains |
| Swapping one crypto for another | Yes | Capital Gains |
| Spending crypto on goods/services | Yes | Capital Gains |
| Receiving mining or staking rewards | Yes | Income Tax |
| Earning crypto as salary or freelance pay | Yes | Income Tax |
| Receiving an airdrop | Yes | Income Tax |
| Buying crypto with fiat | No | — |
| Transferring between your own wallets | No | — |
| Holding (HODLing) crypto | No | — |
| Donating crypto to a registered charity | No* | May qualify for deduction |
| Gifting crypto (under annual limit) | No* | Gift tax rules may apply |
How Crypto Tax Works
Crypto tax is primarily based on capital gains — the profit between what you paid (cost basis) and what you received when you sold or disposed of the asset.
Short-Term vs Long-Term Capital Gains (US)
How long you hold an asset before selling it determines the rate you pay:
| Holding Period | Classification | Tax Rate (US) |
|---|---|---|
| Less than 1 year | Short-Term Capital Gain | 10% – 37% (taxed as ordinary income) |
| More than 1 year | Long-Term Capital Gain | 0%, 15%, or 20% depending on income |
Income tax applies when you earn crypto through mining, staking rewards, airdrops, or salary payments. The fair market value at the time you receive it becomes taxable income and also sets your cost basis for any future capital gains calculation.
Tax Rates by Country
Crypto tax rules vary widely. Here's a comparison of five major jurisdictions:
| Country | Capital Gains Rate | Income Tax on Crypto | Key Rules |
|---|---|---|---|
| United States | 0–20% (long-term); 10–37% (short-term) | 10–37% | 1-year holding threshold for long-term; IRS Form 8949 required; wash-sale rules apply from 2025 |
| United Kingdom | 10% (basic) / 20% (higher) | 20–45% | £3,000 annual CGT allowance (2025/26); share-pooling method; 30-day bed-and-breakfasting rule |
| EU (e.g. Germany) | 0% if held >1 year; up to 45% if <1 year | 0–45% | Germany offers full exemption after 1-year hold; €600 annual exemption for short-term gains; MiCA framework in effect |
| Australia | 0–45% (marginal rate); 50% CGT discount if held >1 year | 0–45% | Crypto treated as CGT asset by ATO; 50% discount for assets held 12+ months; personal-use exemption under A$10,000 |
| Canada | 50% of gain taxed at marginal rate (effective ~12.5–26.75%) | 15–33% | Only 50% of capital gains are taxable (inclusion rate); reported on Schedule 3; business traders taxed at 100% |
How to Calculate Your Crypto Tax
Follow these steps to work out what you owe:
Export CSV files from every exchange, wallet, and DeFi protocol you've used during the tax year. Include buys, sells, swaps, transfers, staking rewards, and airdrops.
Common methods include FIFO (First In, First Out), LIFO (Last In, First Out), and Specific Identification. In the US, FIFO is the default. The UK uses share pooling. Check your jurisdiction's rules.
For every sale, swap, or spend: Capital Gain = Proceeds − Cost Basis. Track each individually — you need this detail for your tax return.
Separate your gains based on holding period. Long-term gains (held over 1 year) are taxed at lower rates in most countries.
Report the fair market value at the time of receipt as ordinary income. This is separate from your capital gains.
US: Form 8949 + Schedule D. UK: Self-Assessment. Australia: myTax CGT section. Canada: Schedule 3. Use tax software to generate these automatically.
Tax Software Comparison
Manually tracking hundreds of transactions is unrealistic. These platforms automate the entire process:
| Platform | Starting Price | Key Features | Best For |
|---|---|---|---|
| Koinly | From $49/year | 400+ exchange integrations; supports DeFi, NFTs, and margin trading; auto-generates tax forms for 20+ countries | International users & DeFi traders |
| CoinLedger | From $49/year | Free portfolio tracking; TurboTax & TaxAct integration; unlimited revisions; simple UI | US-based beginners |
| TokenTax | From $65/year | Full-service CPA option; supports all transaction types; tax-loss harvesting dashboard; reconciliation tools | High-volume traders & those wanting CPA support |
| CoinTracker | Free (up to 25 txns) | Coinbase partnership; real-time portfolio tracking; supports 300+ integrations; tax-loss harvesting alerts | Casual investors & Coinbase users |
Tax-Saving Strategies
These are legal, well-established methods to reduce your crypto tax liability:
Sell losing positions before year-end to offset gains. In the US, crypto was previously exempt from wash-sale rules, but since 2025, a 30-day wash-sale rule applies — you cannot buy back the same asset within 30 days.
Long-term capital gains rates are significantly lower than short-term rates. In Germany, gains are completely tax-free after a one-year holding period.
Donating appreciated crypto to a registered charity lets you claim a deduction for the full market value without paying capital gains tax on the appreciation.
In the US, some self-directed IRAs and Roth IRAs allow crypto investments. Gains inside these accounts grow tax-deferred or tax-free.
Where permitted (e.g., Specific Identification in the US), selecting which lots to sell can minimise your taxable gain. Selling your highest-cost lots first reduces the gain.
Good record-keeping is not a tax strategy per se, but it prevents you from overpaying. Without records, tax authorities may assume worst-case cost basis (zero).
Common Mistakes & Penalties
Frequently Asked Questions
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