How to file your Bitcoin taxes
Bitcoin remains the market-leading cryptocurrency, with millions of investors hodling, trading, and mining. Whatever your investments, Koinly can help with your Bitcoin taxes. Here’s how.
Follow these steps to sync your Bitcoin (BTC) data automatically to Koinly:
- Open your Bitcoin (BTC) wallet app
- Locate and copy your public address or key
On Koinly:
- Create a free account on Koinly
- Complete onboarding until you get to the Wallets page and find Bitcoin (BTC) in the list
- Select API > Paste the public address/key you copied above in the appropriate box
- Hit Import and wait for Koinly to sync your data. This can take a few minutes
- Review your transactions on the Transactions page to ensure everything is tagged correctly and no missing data
- Go to the Tax Reports page to view your tax liability!
- We recommend syncing your XPUB key rather than individual addresses. Learn more
- You can enter multiple "single" public addresses by adding a comma between them (but you can only use one xpub)
- Head over to our help center
- Hit up our discussion boards - we might have already answered your question
- Ask us on social media - we're on Twitter and Reddit
- Contact us on email or live chat
- Got a feature request? Give us feedback on Canny
Important: You’ll need your Bitcoin public address from each wallet you use to interact with the Bitcoin blockchain to calculate your taxes accurately. If you're an Unstoppable Domains user, you can also enter your domain instead of your address into Koinly to fetch your transaction data!
How to find your Bitcoin (BTC) public key
You can export your Bitcoin (BTC) xpub key from most wallets, but the way to get your xpub key varies depending on the wallet you're using. We've got a help guide on how to get xpub keys from many popular wallets. There are a few wallets that do not provide xpub keys. In these instances, we have a recovery phrase method that will help you get your xpub key. You can also find easy-to-follow steps on how to get your Bitcoin public address for hundreds of wallets on our integration index.
Please note: your xpub key is different for every single blockchain, so you'll need to export it separately for all the coins you're transacting with for a given wallet, for example, your xpub BTC key, xpub BCH key, xpub LTC key.Â
And don't forget, in order for Koinly to calculate your crypto taxes correctly, you’ll need to add your public address from every wallet you use for Bitcoin.
How are Bitcoin transactions taxed?
It depends on the transaction and where you live. You can read our crypto tax guides for a detailed breakdown of the rules in your country, but generally speaking, Bitcoin is subject to:
Capital Gains Tax: When you sell, trade, spend, or sometimes even gift Bitcoin, you'll pay Capital Gains Tax on any profit.
Income Tax: When you earn Bitcoin, for example, through mining rewards or by getting paid in Bitcoin, this will usually be categorized as additional income and subject to Income Tax.
FAQs
How is mining Bitcoin taxed?
Bitcoin mining tax depends on where you live, as some tax offices allow hobby mining income to be tax-free upon receipt. However, the majority of tax offices, including the IRS, view Bitcoin mining rewards as additional income, which is subject to Income Tax upon receipt.
How is being paid in Bitcoin taxed?
Getting paid in Bitcoin is generally viewed the same way as being paid in fiat currency is. You’ll need to identify the fair market value of any BTC on the day you received it, and you’ll pay Income Tax on this amount upon receipt.
How are Bitcoin rewards taxed?
If you’re earning Bitcoin rewards - for example, earning interest on your Bitcoin investments, these are generally viewed as additional income and subject to Income Tax.
Do you have to pay tax on Bitcoin?
Yes. You need to pay tax on Bitcoin. The tax you’ll pay depends on the transaction you’re making and where you live. You can learn more about Bitcoin and crypto tax in your country in our crypto tax guides.
Can the IRS track Bitcoin?
Yes. The IRS can track Bitcoin and other cryptocurrencies. If you’re trading Bitcoin on centralized crypto exchanges, the majority of these exchanges issue 1099-MISC forms to the IRS for any users earning more than $600 in income in a single financial year. Larger exchanges may also be compelled to share further KYC data with the IRS to ensure tax compliance. As well as this, under current guidance, from 2026 all exchanges operating in the US will be required to issue 1099-DA, which includes much more detail about your crypto transactions.
