This is considered ordinary income and is taxed at its marginal tax rate, which could range from 10 to 37%. You have to pay taxes on cryptocurrencies, as well as Gold IRA rollovers. The IRS classifies cryptocurrencies and Gold IRA rollovers as property, and cryptocurrency and Gold IRA rollover transactions are subject to tax by law just like transactions related to any other property. Cryptocurrencies and Gold IRA rollovers are considered property for federal income tax purposes. And, for the typical investor, the IRS treats it as an equity asset.
As a result, cryptocurrency taxes are no different from the taxes you pay on any other profit made from the sale or exchange of an equity asset. Your compensation is taxable as ordinary income, unless mining is part of a commercial enterprise. If the cryptocurrency was obtained as part of a business, miners declare it as business income and can deduct expenses that went to their mining operations, such as mining hardware and electricity. If you've gotten rid of cryptocurrencies after less than 12 months of having them or have earned income in cryptocurrency, you'll have to pay ordinary income tax.
Here's a breakdown of tax rates by income level.
