With updated tax rules taking effect in 2025 and more small businesses using digital assets, misunderstanding how crypto is taxed can lead to reporting mistakes or unexpected tax bills. If you buy, sell, or accept crypto in your business, the IRS expects you to report those transactions. This article will walk you through how cryptocurrency is taxed, when the tax rates apply, and what you need to know to avoid common filing mistakes or unexpected tax bills.
As a business owner, you may be wondering:
In 2025, cryptocurrency is generally taxed as capital gains. The exact rate depends on how long the asset was held and whether it was used for personal or business purposes.
At CMP, we work with business owners across Salt Lake, Logan, and St. George who want clear answers about their crypto tax obligations. As a trusted crypto tax accountant in Utah, our team stays up to date with IRS changes and helps you accurately calculate and report cryptocurrency income or gains.
This article explains how cryptocurrency tax rates work in 2025. You’ll learn how crypto is taxed, the difference between short-term and long-term capital gains, and what business owners need to know to stay compliant and avoid issues at tax time.
The cryptocurrency tax rate in 2025 depends on how the asset was used and how long it was held. If you sell crypto for more than you paid, the IRS treats that as a capital gain. Crypto held for one year or less is taxed at regular income tax rates, while assets held longer are taxed at lower long-term capital gains rates.
If your business receives crypto as payment or earns it through mining or staking, the value is treated as ordinary income at the time it is received. Later, if you sell that crypto for a profit, a capital gains tax may also apply.
In 2025, new IRS rules require exchanges to issue Form 1099-DA showing your sales activity. The IRS also asks a direct question on federal tax forms about whether you received or sold digital assets. These changes mean the IRS now has better tools to match your crypto transactions with what you report.
For business owners in Utah, understanding how and when crypto is taxed helps avoid mistakes, stay compliant, and reduce the risk of penalties. Whether you're accepting crypto payments or holding it as an investment, knowing which rate applies is essential for accurate reporting.
The amount of tax you pay on crypto depends on how you use it. Cryptocurrency can trigger taxes either as income or as a capital gain, depending on the event. Some actions are taxable, while others are not.
You may owe tax if you:
If you buy 1 BTC for $10,000 and later sell it for $14,000, you owe tax on the $4,000 gain. If you held it for under a year, it’s taxed as ordinary income. If you held it longer, it qualifies for long-term capital gains rates.
If your business accepts 0.01 BTC as payment when its value is $500, you report $500 as income. If you later sell that crypto for $600, you pay capital gains tax on the $100 profit.
You do not pay tax when you:
These events do not involve a sale or income recognition, so they are not reported on your tax return.
Businesses in Utah that accept or invest in crypto must track each transaction to calculate the correct tax. Unlike personal use, business transactions may be subject to both income and capital gains tax. Understanding which events trigger taxes helps prevent underreporting and reduces the risk of penalties.
Knowing how crypto is taxed allows you to plan smarter, report accurately, and stay compliant with current IRS rules.
To answer the question
It depends on how long you hold the asset before selling or using it. The IRS separates capital gains into two categories: short-term and long-term. Each is taxed at different rates, which can affect how much you owe.
If you hold crypto for one year or less, the profit is taxed as a short-term capital gain. These gains are taxed at your regular federal income tax rate, which is often higher than long-term rates.
|
Tax Rate |
Single Filer |
Married Filing Jointly |
Head of Household |
Married Filing Separately |
|
10% |
$0 – $11,925 |
$0 – $23,850 |
$0 – $17,000 |
$0 – $11,925 |
|
12% |
$11,926 – $48,475 |
$23,851 – $96,950 |
$17,001 – $64,850 |
$11,926 – $48,475 |
|
22% |
$48,476 – $103,350 |
$96,951 – $206,700 |
$64,851 – $103,350 |
$48,476 – $103,350 |
|
24% |
$103,351 – $197,300 |
$206,701 – $394,600 |
$103,351 – $197,300 |
$103,351 – $197,300 |
|
32% |
$197,301 – $250,525 |
$394,601 – $501,050 |
$197,301 – $250,500 |
$197,301 – $250,525 |
|
35% |
$250,526 – $626,350 |
$501,051 – $751,600 |
$250,501 – $626,350 |
$250,526 – $375,800 |
|
37% |
$626,351 or more |
$751,601 or more |
$626,351 or more |
$375,801 or more |
If you hold crypto for more than one year, the gain is taxed at a lower long-term capital gains rate, either 0%, 15%, or 20% based on your income.
|
Tax Rate |
Single Filer |
Married Filing Jointly |
Married Filing Separately |
Head of Household |
|
0% |
$0 – $48,350 |
$0 – $96,700 |
$0 – $48,350 |
$0 – $64,750 |
|
15% |
$48,351 – $533,400 |
$96,701 – $600,050 |
$48,351 – $300,000 |
$64,751 – $566,700 |
|
20% |
$533,401 or more |
$600,051 or more |
$300,001 or more |
$566,701 or more |
If your business invests in crypto, your tax rate depends on how long you hold each asset. Short-term sales are taxed as income, which may lead to higher rates. Long-term sales can qualify for lower rates if you hold the crypto for more than one year.
If your business is a sole proprietorship, single-member LLC, partnership, or S corporation, then yes. These capital gains tax brackets apply to you because your crypto gains are reported on your personal tax return. If your business is a C corporation, these brackets do not apply. Instead, crypto gains are taxed at the corporate flat rate of 21 percent, with no long-term capital gains benefit.
A business buys Bitcoin for $20,000 and sells it six months later for $25,000. The $5,000 profit is taxed as ordinary income. If the business had held it for over a year, the same gain may have qualified for a 15% long-term capital gains rate, depending on total income.
Holding periods matter. Planning your crypto sales with tax brackets in mind can reduce how much you owe and help your business stay compliant.
Crypto is taxed as ordinary income when it is earned rather than sold. This applies when your business receives crypto through work, rewards, or sales.
You report crypto as income if it comes from:
For tax purposes, the crypto’s value at receipt must be reported as business income. Later, if you sell that crypto for more or less, you may also report a capital gain or loss.
Businesses need to track:
Good records help you stay compliant, avoid penalties, and simplify year-end accounting.
Not all crypto activity results in a tax bill. Some transactions are considered non-taxable because they do not involve income or the disposal of an asset.
If your business sells, trades, or accepts crypto as payment, those are taxable events. Simply moving crypto or holding it in a business wallet does not trigger tax, but the moment you use or exchange it, you may owe tax.
If your business uses or accepts cryptocurrency, the IRS requires you to report both income and capital gains from digital assets. The rules are getting stricter in 2025, and the IRS now has more tools to track crypto activity than ever before.
Used to report each crypto sale or trade. You must list the date acquired, date sold, amount received, cost basis, and gain or loss for every taxable event.
This summarizes your short-term and long-term capital gains. It pulls totals from Form 8949 and is filed with your business or individual return.
Starting in 2025, crypto brokers and exchanges will send this form to both you and the IRS. It reports your gross proceeds from crypto sales. In 2026, it will also include your cost basis, allowing the IRS to match gains with greater accuracy.
All major IRS tax forms, including Form 1040 and Form 1120, now ask whether you received, sold, or transferred digital assets during the year. Answering “yes” requires you to provide details.
Brokers must follow know-your-customer rules and report activity directly to the IRS. Combined with blockchain tracking tools, this makes it easier for the IRS to identify unreported crypto transactions. If your business uses exchanges or wallets that follow U.S. compliance standards, assume your crypto activity is visible to the IRS.
Staying organized with your crypto accounting helps avoid penalties and builds trust with the IRS. As reporting requirements expand, having clean records gives your business a strong foundation for compliance.
Business owners often ask how to lower their crypto tax bill without breaking IRS rules. The good news is that there are legal strategies that can reduce your liability and improve your overall tax outcome.
Crypto creates new challenges for business owners. Between tracking asset values, reporting income, and staying ahead of changing IRS rules, managing crypto taxes can be more complex than traditional bookkeeping.
At CMP, we work with business owners across Salt Lake, Logan, and St. George who use crypto in their operations. Whether you're accepting crypto as payment, investing through your business, or handling staking rewards, we understand how to report these transactions correctly and stay compliant.
If you're unsure how to track crypto gains, file required forms, or prepare for IRS reporting in 2025, we can help. Our team offers business consultations focused on crypto accounting, bookkeeping, and income tax strategy. We’ll help you understand your obligations, reduce your risk, and experience the benefits of hiring a CPA who can guide both your compliance and long-term financial decisions.
Staying on top of deadlines is key to avoiding penalties and keeping your crypto tax reporting accurate. Here are the key dates and tips every business owner should know for 2025.
April 15, 2026: This is the deadline to file your federal tax return for the 2025 tax year. Crypto-related income and capital gains must be included on your return using the correct forms.
If your business expects to owe at least $1,000 in total taxes for the year, the IRS requires estimated tax payments throughout the year. This includes tax owed on crypto-related income.
Failing to pay enough throughout the year may result in underpayment penalties, even if you file your return on time.
Clear records and timely payments help your business avoid errors and stay compliant with growing IRS oversight on crypto.
Crypto tax reporting in 2025 may feel complicated, but you don’t have to handle it alone. Whether your business is accepting crypto payments, earning staking rewards, or managing digital asset investments, the team at CMP is here to help.
With offices in Salt Lake City, Logan, and St. George, we work with business owners across Utah to simplify crypto accounting, meet IRS requirements, and reduce tax stress.
Contact us today for personalized guidance on crypto taxes. We’re here to help you stay compliant, confident, and reduce your tax burden.