US Crypto Tax Year 2022: Inflation-Based Changes to Know

To offset the impact of rising inflation, the IRS has revised a number of tax provisions to let people keep more of their money in their wallets for the 2022 tax year. This piece is part of CoinDesk's Tax Week.
Updated Feb 22, 2022 at 9:32 p.m. UTC
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Ollie is the Learn editor for the Crypto Explainer+ section. He holds some SOL, RAY, CHSB and BTC.

With inflation running at a four-decade high in the United States, the country’s federal tax agency – Internal Revenue Service (IRS) – has responded by making adjustments to some sixty provisions.

Several of these changes will directly affect how much tax you owe for your cryptocurrency activities for the year ahead.

This piece is part of CoinDesk’s Tax Week.

Standard deductions

Starting off, the amount U.S citizens can deduct from their taxable income – known as “Standard Deduction” – has been increased, meaning you get to hold on to a little more cash than the previous year.

Filing status
2021 tax year
2022 tax year
Single
$12,550
$12,950
Married, filing together
$25,100
$25,900
Married, filing separately
$12,550
$12,950
Head of household
$18,800
$19,400

Cryptocurrency-based activities that are treated as income in the U.S. include:

Federal income tax brackets

Changes are also being made to income brackets. These will affect how much tax you’ll owe for short-term held crypto assets (assets held for less than one year). Anything held for longer is treated as a long-term capital gain and subject to either 0%, 15% or 20% tax depending on individual or combined marital income.

Individual filers

Taxable income
Taxes owed
$0 to $10,275
10% of taxable income
$10,276 to $41,775
$1,027.50 + 12% of amount over $10,275
$41,776 to $89,075
$4,807.50 + 22% of amount over $41,775
$89,076 to $170,050
$15,213.50 + 24% of amount over $89,075
$170,051 to $215,950
$34,647.50 + 32% of amount over $170,050
$215,951 to $539,900
$49,335.50 + 35% of amount over $215,950
$539,901 or more
$162,718 + 37% of amount over $539,900

Joint-filing married couples

Taxable income
Taxes owed
$0 to $20,550
10% of taxable income
$20,551 to $83,550
$2,055 + 12% of amount over $20,550
$83,551 to $178,150
$9,615 + 22% of amount over $83,550
$178,151 to $340,100
$30,427 + 24% of amount over $178,150
$340,101 to $431,900
$69,295 + 32% of amount over $340,100
$431,901 to $647,850
$98,671 + 35% of amount over $431,900
$647,851 or more
$174,253.50 + 37% of amount over $647,850

Further Reading from CoinDesk's Tax Week

Crypto won’t save you from taxes, but it may eventually make them easier to pay, says futurist Dan Jeffries.

Tax guidance lags innovation. So does tax software. Meanwhile, misconceptions abound. If not careful, investors can end up owing more tax than expected and having to unload crypto to pay the bill

Investors in MicroStrategy, Tesla, Block and Coinbase need to consider how wild price swings will affect results, not only directly but indirectly due to complex tax accounting rules.

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Ollie is the Learn editor for the Crypto Explainer+ section. He holds some SOL, RAY, CHSB and BTC.

CoinDesk - Unknown

Ollie is the Learn editor for the Crypto Explainer+ section. He holds some SOL, RAY, CHSB and BTC.

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