Naturally, you want to minimize your crypto taxes so you can keep more of your money and maximize your gains. To do this, you first need a basic understanding of how cryptocurrency gains are taxed. Then you can start thinking about ways to reduce or eliminate your tax bill. Hopefully, the information and tips below will help you keep a lid on crypto taxes and let you get ahead financially.
If you want to lower your tax bill, hold your cryptocurrency long enough to turn your short-term gains into long-term gains. It may not be an easy task, but if you have the patience and fortitude to keep your crypto for at least a year before selling, then you’ll likely pay a reduced tax rate on any capital gain.
Another strategy for lowering the taxes crypto investors must pay is to offset capital gains with capital losses. This works by subtracting losses on crypto assets that you sold during the year from taxable gains on cryptocurrencies or other investments that have appreciated in value.