How much tax you pay on crypto isn't a single number — it depends on how long you held, how much you earn overall, and whether the gain is a capital gain or ordinary income. This guide breaks down the 2026 federal rates so you can estimate what you'll owe before tax season hits.
The One-Year Rule
Holding crypto for more than one year before selling qualifies you for long-term capital gains rates of 0%, 15%, or 20% — far lower than the ordinary income rates (up to 37%) that apply to assets held one year or less. Holding period is the single biggest lever on your crypto tax bill.
Short-Term vs. Long-Term Capital Gains
When you sell, swap, or spend crypto for more than you paid, you have a capital gain. The rate depends entirely on your holding period:
- Short-term — held one year or less. Taxed at ordinary income rates (10% to 37%).
- Long-term — held more than one year. Taxed at 0%, 15%, or 20%.
The holding period clock starts the day after you acquire the asset and ends on the day you dispose of it. One day on either side of the one-year mark can shift you from ordinary rates to preferential rates, so timing sales matters.
2026 Long-Term Capital Gains Brackets
Long-term rates are tied to taxable income thresholds, which are adjusted for inflation each year. The approximate 2026 thresholds are:
Single Filers
- 0% rate — taxable income up to roughly $49,000
- 15% rate — roughly $49,000 to $533,000
- 20% rate — above roughly $533,000
Married Filing Jointly
- 0% rate — taxable income up to roughly $98,000
- 15% rate — roughly $98,000 to $600,000
- 20% rate — above roughly $600,000
These figures are indexed annually, so confirm the exact thresholds for the tax year you're filing. The key takeaway is that lower-income taxpayers can pay 0% on long-term crypto gains.
2026 Ordinary Income Tax Brackets
Short-term gains, staking rewards, airdrops, mining, and crypto received as payment are all taxed as ordinary income. The federal brackets are 10%, 12%, 22%, 24%, 32%, 35%, and 37%. Because the system is progressive, only the income that falls within each bracket is taxed at that rate — not your entire income.
Example: Mixed Income
A single filer with $70,000 of wages who realizes a $5,000 short-term crypto gain adds that $5,000 on top of wages. It is taxed at their marginal rate (22% in this range), costing about $1,100. The same $5,000 gain held long-term would likely be taxed at 15%, or $750 — a $350 difference from holding period alone.
The Net Investment Income Tax
High earners face an additional 3.8% Net Investment Income Tax (NIIT) on investment income, including crypto gains, once modified adjusted gross income exceeds $200,000 (single) or $250,000 (married filing jointly). This stacks on top of capital gains rates, so a top-bracket investor can effectively pay 23.8% on long-term crypto gains.
Don't Forget State Taxes
The rates above are federal only. Most states also tax crypto gains, often at ordinary income rates with no preferential long-term treatment. A combined federal-plus-state bill can be meaningfully higher than the federal figure alone, so factor your state in before assuming your total liability.
How Income From Crypto Is Taxed
Not all crypto is a capital gain. These events are taxed as ordinary income at fair market value when received:
- Staking rewards — income at receipt, then capital gains when sold
- Mining — income at receipt; may be subject to self-employment tax if a business
- Airdrops and hard forks — income at the value when you gain control
- Crypto as payment for goods or services — income equal to the fair market value received
Offsetting Gains With Losses
Capital losses offset capital gains dollar-for-dollar. If your losses exceed your gains, you can deduct up to $3,000 of net capital losses against ordinary income each year, and carry any remaining losses forward to future years. Strategic loss harvesting can meaningfully reduce your effective rate.
Estimating What You Owe
To roughly estimate your crypto tax, work through these steps:
- Separate each disposal into short-term and long-term based on holding period
- Net your gains and losses within each category
- Apply ordinary rates to short-term gains and 0/15/20% to long-term gains
- Add ordinary income from staking, mining, and airdrops
- Add NIIT and state tax if applicable
Know Your Tax Bill Before You File
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Conclusion
Your crypto tax rate isn't fixed — it's shaped by holding period, total income, and the type of activity. The biggest savings come from holding assets longer than a year to unlock long-term rates and from harvesting losses to offset gains.
Run the numbers before you sell, and remember to layer in NIIT and state taxes for a realistic picture of what you'll actually owe.
This article is for informational purposes only. Tax laws can change; consult a qualified tax professional for personalized advice.