Cryptocurrency Mining and Taxes
When you earn rewards from cryptocurrency mining, these are typically taxed similarly to other crypto-assets. The tax rate on crypto mining rewards depends on your total income and falls within the federal income tax brackets, which can range between 10% and 37%.
Taxation Varies by Country
Every country has a different approach to taxing cryptocurrencies, and some countries levy different tax rates or apply different rules for different kinds of crypto transactions. For example, in the US, the IRS states that cryptocurrency trades are taxed using the same capital gains tax rules that apply to stocks.
Reporting and Compliance
Major steps to regulate digital assets at a global level include the OECD’s Crypto Asset Reporting Framework (CARF) and updates to the Common Reporting Standard (CRS), along with DAC8 in the European Union (EU) and tax reporting rules in the US.
Anonymity and Enforcement
Cryptocurrencies’ quasi-anonymity is an inherent obstacle to third-party reporting. This makes it challenging for tax authorities to track transactions and enforce compliance.
Please note that this information is intended to provide a general overview and does not constitute legal or tax advice. Always consult with a qualified professional for advice tailored to your specific circumstances.
