Legal

Crypto Credits is a Web3 platform & gateway to the blockchain, NOT A BANK. Payment services provided and issued by third party partners. All buy, sell & trading is at users own risk! We’re unable to cancel or reverse any transaction. It can only be refunded by the person receiving the funds.

Users bear responsibility for their own:

  • Financial and/or Investment decisions
  • Private Keys

NEVER, in any situation, should you ever give someone your login password, private key or recovery phrase (“Seed Phrase”). This will give someone complete access to all your crypto!Crypto Credits and staff will never ask you to input your seed phrase. Please make sure you’re visiting https://mobilecredits.app – check the URL carefully.

Do you pay Taxes on crypto?

Yes, you’ll pay tax on cryptocurrency in the US – and pretty much any other country in the world too.
In the US, cryptocurrency isn’t viewed as a currency. Instead, it’s viewed as property – just like a share or a rental property.

Can the IRS track crypto?

Yes – the IRS can track crypto.

So if you’re asking yourself do you have to pay taxes on crypto gains? Can the IRS really know about my crypto investments? Stop right there.

The IRS have confirmed they’re working with crypto exchanges like Coinbase, Binance US and Kraken to share customer information to ensure crypto investors are reporting their crypto gains and income accurately. Coinbase in particular has confirmed they send Form 1099-MISC to any investor who made more than $600 in a financial year and that they send this form to both the investor and the IRS.

Though we’ve singled out the crypto exchanges above, the reality is any crypto exchanges that uses Know Your Customer (KYC) identification may be asked to share this information with the IRS.

The IRS is using this information to send out letters to American crypto investors to remind them to report their crypto transactions and pay their crypto taxes, as well as to conduct audits and seize assets from those avoiding taxes.

The best way to stay tax compliant is to report your crypto taxes accurately to the IRS.

Capital Gains Tax on crypto

Because crypto is viewed as a capital asset from a tax perspective, anytime you dispose of crypto, you’ll pay Capital Gains Tax. There are four ways you can dispose of your cryptocurrency in the US:

  • Selling crypto for fiat currency.
  • Swapping crypto for crypto.
  • Spending crypto on goods or services.
  • Gifting crypto (over the $15,000 threshold for 2021, this has changed to $16,000 for 2022)

You won’t pay Capital Gains Tax on the entire proceeds of a crypto disposal – only any capital gain (profit) you made as a result of a disposal.

Crypto Capital Gains Tax rate

There isn’t a specific crypto tax rate. It’s all based off the Capital Gains Tax rules. The Capital Gains Tax rate you’ll pay on your crypto depends on how long you’ve held your asset for and how much you earn. If you’ve held it for less than a year, you’ll pay the short-term Capital Gains Tax rate. If you’ve held it for more than a year, you’ll pay the long-term Capital Gains Tax rate.

For short-term capital gains, you’ll pay the same tax rate as you do on your regular income. This is based off the Federal Income Tax rate brackets. For 2021 to 2022 these are:

Tax Rate Single Head of Household Married filing jointly Married filing separately
10% $0 – $9,950 $0 – $14,200 $0 – $19,900 $0 – $9,950
12% $9,951 – $40,525 $14,201 – $54,200 $19,901 – $81,050 $9,951 – $40,525
22% $40,526 – $86,375 $54,201 – $86,350 $81,051 – $172,750 $40,526 – $86,375
24% $86,376 – $164,925 $86,351 – $164,900 $172,751 – $329,850 $86,376 – $164,925
32% $164,926 – $209,425 $164,901 – $209,400 $329,851 – $418,850 $164,926 – $209,425
35% $209,426 – $523,600 $209,401 – $523,600 $418,851 – $628,300 $209,426 – $314,150
37% $523,601+ $523,601+ $628,301+ $314,151+

Long-term Capital Gains Tax rate

Meanwhile, long-term Capital Gains Tax for crypto is generally much lower. The long-term Capital Gains Tax rates for 2021 to 2022 are:

Tax Rate Single Head of Household Married filing jointly Married filing separately
15% $40,401 – $445,850 $80,801 – $501,600 $54,101 – $473,750 $40,401 – $250,800
20% $445,850+ $501,600+ $473,750+ $250,800+

Please hire a financial advisor, or ask your current one to make sure you find the best answers & solutions for your specific situation.