A survey of U.S. crypto investors found that 58% of the sample size reported crypto holdings on their taxes in 2022 — up 4% year-over-year — while 31% did not report and 11% of the sample size declined to answer.
The survey was conducted by CoinLedger in December 2022 and included 305 American adults who own or invest in crypto.
Of those that did not report crypto holdings on their taxes, 50% said the primary reason was that they did not profit from trading, while 18% said they did not know they had to report, and 12% said they did not know how to report tax returns on their crypto holdings.
Additionally, 7% of the respondents said they did not want to pay tax, and 4% said they did not report tax because the government does not know about their crypto holdings.
Lack of clarity
The survey also revealed that many people have a hard time differentiating between taxable and non-taxable and are likely misreporting their tax returns to the IRS.
Most people — 65% of respondents — knew that selling crypto is a taxable event, but only 38% of the respondents knew that crypto-to-crypto trades are also taxable under U.S. law.
On the other end of the spectrum, 25% of respondents think that wallet-to-wallet transfers are taxable, while 21% believe holding crypto is taxable — both of which are non-taxable.
According to the survey findings, there is a lack of education and clarity around crypto and more awareness is needed across the board.
IRS expanding tax net
On Feb. 8, Cryptoslate reported numerous changes set to broaden IRS tax requirements for everyone who has received, earned, transferred or sold cryptocurrencies.
In the U.S., crypto gains earned from purchases held less than a year are subject to regular income tax, which varies between 10% to 37%.
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