Cryptocurrency Tax Calculator

How to Use the Cryptocurrency Tax Calculator

This guide will walk you through the steps to utilize the Cryptocurrency Tax Calculator to estimate your taxes and returns from cryptocurrency investments.

Step 1: Enter Your Cryptocurrency Amount

Begin by locating the field labeled Cryptocurrency Amount. In this field, enter the total amount of cryptocurrency you own or plan to sell. Ensure the value entered is equal to or greater than 0.00000001 to meet the validation requirement.

Step 2: Input the Purchase Price

Next, move to the field titled Purchase Price (USD). Enter the price you paid for each unit of cryptocurrency at the time of purchase. The value must be greater than or equal to 0.00000001 USD to be valid.

Step 3: Input the Sale Price

Following the purchase price, enter the selling price per unit of your cryptocurrency in the field labeled Sale Price (USD). Again, this value should be at least 0.00000001 USD.

Step 4: Choose Your Holding Period

Select your holding period from the Holding Period dropdown menu. Choose Short Term (≤ 12 months) or Long Term (> 12 months) depending on how long you’ve held the cryptocurrency before selling.

Step 5: Select Your Tax Bracket

Identify your tax bracket using the Tax Bracket dropdown. Choose the appropriate percentage based on your total annual income. The options range from 10% to 37% based on different income ranges.

Understanding the Result Fields

• Total Investment: This field calculates the total amount you invested by multiplying the cryptocurrency amount by the purchase price.
• Total Return: Represents the total return by multiplying the cryptocurrency amount by the sale price.
• Capital Gain/Loss: Displays the difference between your total return and your total investment, showing either a profit or a loss.
• Effective Tax Rate: Based on your holding period and tax bracket, this tool provides an effective tax rate. Long-term investments could be eligible for a reduced rate, capped at 20%.
• Estimated Tax Owed: This field calculates the tax you owe on profits. The tax owed is derived from your capital gain multiplied by your effective tax rate. Losses are not taxed.
• Net Profit After Tax: Shows your real profit after tax has been deducted from the capital gain.
• Return on Investment (ROI): Calculates your investment performance as a percentage, by considering the net profit relative to your original investment cost.

By following these steps and understanding each field, you can effectively utilize the Cryptocurrency Tax Calculator to assess your tax liabilities and returns from crypto investments.