Everyday Law & Life

Do You Have to Pay Taxes on Cryptocurrency in the U.S.? IRS Rules Explained Cryptocurrency is exciting, volatile, and — yes — taxable. If you bought, sold, staked, or even received crypto as a gift, you might owe taxes to the IRS. Let’s break down when and how crypto is taxed in the United States. 💸 Is Crypto Considered Income or Property? The IRS classifies cryptocurrency as property , not currency. This means crypto transactions are generally subject to capital gains tax , not income tax — unless you're paid in crypto. 📊 Taxable Events You may owe taxes if you: Sell crypto for fiat (USD, etc.) Exchange one crypto for another Use crypto to buy goods or services Receive crypto as payment for work Earn rewards via staking or mining 📝 These events must be reported on IRS Form 8949 and Schedule D 🧮 How Is It Taxed? Short-term gains (held <1 year): taxed at ordinary income rate (10%–37%) Long-term gains (held >1 year): taxed at ca...

Who Qualifies as a Dependent on Your Tax Return in the U.S.? Claiming a dependent on your tax return can lead to major savings — including credits, deductions, and even lower tax brackets. But who actually qualifies? Let’s walk through the IRS rules and common scenarios to determine who you can legally claim as a dependent. 👶 Two Types of Dependents The IRS defines two main types: Qualifying Child Qualifying Relative Each has different rules. 🧒 1. Qualifying Child Requirements: Relationship : Your child, stepchild, sibling, or their descendant Age : Under 19 (or under 24 if a full-time student) Residency : Must live with you more than half the year Support : Cannot have provided more than half of their own support Joint return : Cannot file jointly with a spouse (unless only to claim refund) 👴 2. Qualifying Relative Requirements: Doesn’t have to live with you (if a listed relative) Gross income < $4,700 (2023 limit, adjusted annua...