How to Legally Avoid Crypto Tax In 2022

Although you may not realize it, there are specific tax laws for digital currency. If you own cryptocurrency, you need to report it to the IRS. However, certain things may make reporting cryptocurrency taxes less intimidating. We’ll share some ways to avoid cryptocurrency tax legally so you can stay on the right side of the law.

1. Do you need to pay taxes on cryptocurrency?

The short answer is yes, you do need to pay taxes on cryptocurrency. At least, that’s the current consensus among tax experts. The problem is that, because of the way cryptocurrency works, it can be difficult to track and tax. For example, if you bought cryptocurrency a year ago and sold it today, how would the IRS know? You could easily hide your gains (and losses) from the taxman. This is why many people are looking for ways to avoid paying taxes on cryptocurrency. Thankfully, there are a few ways to do this legally.

2. How is cryptocurrency taxed?

In the United States, the Internal Revenue Service (IRS) considers cryptocurrency to be property. This classification has a number of implications for how crypto is taxed. For one, when you sell crypto for cash, you are considered to have sold it at its fair market value, and you must report any gain or loss on your tax return. If you hold crypto for more than a year, you can class it as a long-term capital gain and pay a lower tax rate. If you use crypto to purchase goods or services, the value of the purchase is considered to be the fair market value of the crypto at the time of the transaction.

3. How to legally avoid cryptocurrency tax

It’s no secret that the IRS is closely watching crypto transactions and has made it clear that it will be taxing cryptocurrencies as property. But there are a few ways you can still legally avoid cryptocurrency tax. For starters, you can gift crypto to others. You can also donate crypto to charity. Another way to avoid paying taxes on your crypto is to trade it for goods or services. Of course, you’ll need to keep good records of all your transactions, but if you play your cards right, you can avoid paying taxes on your crypto altogether. Our advice? Talk to a tax advisor to see what options are available to you.

4. What do you need to do to avoid cryptocurrency tax?

In order to legally avoid cryptocurrency tax, you need to take specific steps before and during the sale of your digital assets. Here are the basics:

5. How is income taxed in the US?

The US Tax Code is incredibly complex, with a variety of rules and regulations that can be difficult to understand. In general, income is taxed in the US at a progressive rate, with the highest tax rate kicking in at more than $500,000 for individuals and $600,000 for married couples filing jointly. There are a number of deductions and tax breaks that can help reduce your tax bill, but it can be tricky to figure out which ones you’re eligible for. In certain cases, you may be able to avoid paying taxes on your crypto income altogether. Speak to an accountant or tax lawyer to find out if you qualify and to get help filing your tax return.


With cryptocurrency continuing to rise in popularity, it’s important to know how you might be affected by taxes on your crypto earnings. Whether you’re a casual investor or an experienced trader, there are numerous ways for your digital assets to make you money. If you receive income from any kind of trading or investing, such as selling cryptocurrency at a profit, the IRS will expect some tax on this capital gain. There’s nothing illegal about avoiding crypto tax; but if you don’t disclose and report them properly on your federal income tax return (that is due by April 15th each year), then that would technically be illegal.

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