Crypto questions: IRS will be asking about cryptocurrency transactions on 2021 returns

If you’re banking on cryptocurrency, a digital way to get paid, you may have to pay real taxes on the money you earn.

>> Read more trending news

The IRS has changed the 1040 tax form for the 2021 tax year, asking if a taxpayer has either received, sold, exchanged or disposed of digital currency, Market Watch reported.

That means that if you received payment in cryptocurrency, did not receive it as a gift, or got it by mining, you may need to pay tax on it, Market Watch explained. If you moved your digital money from one account to another, or from one wallet to another, you should not have to pay taxes.

You must check a box for the crypto question, even if you didn’t have any cryptocurrency transactions in 2021.

The new tax question also applies to non-fungible tokens or NFTs, CNBC reported. The NFTs could also come with a hefty tax bill — a 31.8% tax rate on any profets.

Bitcoins and the like are taxed at a 23.8% top rate, CNBC reported.

Cryptocurrency is treated as property, CNET reported. But there is a catch. If you used real money to buy crypto, you may not have to report the purchase, but if you bought cryptocurrency with other cryptocurrencies then you have to report it, according to CNET.

If you have to pay tax on crypto, then you will need to fill out another form — Form 8949 and Schedule D of Form 1040, Market Watch reported.

For more on the tax implications of cryptocurrency, visit the IRS’s website.


On AirMy Magic 94.9 - Tampa Bay's Best Music Logo

Swimming is a great recreational sport that can be enjoyed by people of all ages, especially here in Florida. But it’s important to know how to be safe while you’re in the water.


Win tickets to concerts, unique experiences, great prizes and MORE!


Get weather news that matters, including forecast and radar from 10 News!



See a new furry friend up for adoption every week, brought to you by Purina Beyond!


See Danielle rap all of your favorite kid’s books!



mobile apps

Everything you love about mymagic949.com and more! Tap on any of the buttons below to download our app.

amazon alexa

Enable our Skill today to listen live at home on your Alexa Devices!