Crypto Tax Brackets 2022: A Complete Guide to Understanding Your Obligations

How Cryptocurrency Is Taxed in 2022

The IRS treats cryptocurrency as property, meaning every transaction—selling, trading, spending, or earning crypto—is a taxable event. Gains or losses are classified as either short-term (held ≤1 year) or long-term (held >1 year), impacting how they’re taxed.

2022 Federal Tax Brackets for Crypto Gains

Short-Term Capital Gains (Ordinary Income Rates)

• 10%: Up to $10,275 (single filers)
• 12%: $10,276–$41,775
• 22%: $41,776–$89,075
• 24%: $89,076–$170,050
• 32%: $170,051–$215,950
• 35%: $215,951–$539,900
• 37%: Over $539,900

Long-Term Capital Gains Rates

• 0%: Up to $41,675 (single filers)
• 15%: $41,676–$459,750
• 20%: Over $459,750

Example: A single filer with $50,000 taxable income pays 15% on long-term gains but 22% on short-term gains.

Reporting Cryptocurrency in 2022

Use Form 8949 and Schedule D to report transactions. Key steps:

1. Calculate cost basis for each transaction.
2. Separate short-term vs. long-term gains.
3. Report totals on Form 1040.

Penalties for unreported crypto income range from fines to criminal charges.

Strategies to Reduce Crypto Taxes

• Tax-Loss Harvesting: Offset gains by selling underperforming assets.
• Hold Long-Term: Qualify for lower 0%/15%/20% rates.
• Specific ID Method: Choose high-cost lots to minimize gains.
• Donate Crypto: Avoid capital gains and claim deductions.

FAQ: Crypto Tax Brackets 2022

1. Do I owe taxes if I didn’t sell crypto?

Yes, if you traded, spent, or earned crypto (e.g., staking rewards).

2. Can I deduct crypto losses?

Up to $3,000 annually against ordinary income; excess carries forward.

3. What if I forgot to report crypto?

File an amended return using Form 1040-X to avoid penalties.

4. Are NFTs taxed like crypto?

Yes—sales or trades trigger capital gains taxes.

Note: This article is informational. Consult a tax professional for personalized advice.