So say you put in 1k and make 400 bucks. And cash out. Do you pay on gains? If so whats avg % they tax and also is government making that tax go up more soon or down ?

Srry if bad wording, but serious ? Im new and unsure

If you held it for less than a year it would just be $400 added on to your "overall" income and you would be taxed at w/e tax bracket you're in based off your income.

Ie for single filers;
Tax rate

Taxable income bracket

Tax owed

10%

$0 to $9,950

10% of taxable income

12%

$9,951 to $40,525

$995 plus 12% of the amount over $9,950

22%

$40,526 to $86,375

$4,664 plus 22% of the amount over $40,525

24%

$86,376 to $164,925

$14,751 plus 24% of the amount over $86,375

32%

$164,926 to $209,425

$33,603 plus 32% of the amount over $164,925

35%

$209,426 to $523,600

$47,843 plus 35% of the amount over $209,425

37%

$523,601 or more

$157,804.25 plus 37% of the amount over $523,600

Two Types of Crypto Taxes: Capital Gain vs. Income
As mentioned earlier, cryptocurrencies are taxable and in the United States, and there are two types:

Capital Gains Tax, similar to bonds, stocks, and other assets that qualify for capital gains.
Income Tax includes mining, staking, airdrops, and other related crypto activities from where one can earn income.
In the case of capital gains, the rates depend on the holding period and are classified as:

Short-term capital gains tax, taxes on assets that are held for less than a year. The rates are usually higher and range from 10% to 37%.
Long-term capital gains tax, taxes on assets that are held for a period longer than a year. The rates for long-term capital gains range from 0% to 20%.

Sale price of assets - Cost of acquiring assets = Short-term gains

Sale price = $1,500

Cost of acquiring assets = $500

$1,500 (sale price) - $500 (cost of acquiring) = $1,000 (gains)

This gain of $1,000 is a short-term gain as the assets were sold within a period of 11 months.

Annual income = $55,000, and the short-term capital gains tax rate for this income is 25%.

So, tax owed = 25% * Capital gains = 0.25 * $1,000 = $250

Another example is your annual income is $35,000 and you bought $500 of BTC on August 1, 2020. If you sell it at $1,500 on August 2, 2021, you incurred a long-term capital gain of $1,000. According to the rates tabulated above, you’ll have to pay 0% taxes. Thus, no federal taxes will apply.

Sale price of assets - Cost of acquiring assets = Long-term gains

The sale price = $1,500

The cost of acquiring assets = $500

$1,500 (sale price) - $500 (cost of acquiring) = $1,000 (gains)

This gain of $1,000 is a long-term gain as the assets are sold after a period of 1 year.

Annual income = $35,000, and the long-term capital gains tax rate for this income is 0%.


found this will read ty schwarber

How does capital losses factor into the tax? Would realizing paper loss in a timely way offset the gain, where tax is concerned?