An increasing number of Americans are getting caught off-guard by crypto tax bills, with millennials leading the list of groups shocked by their hefty tax bills on April 15, according to new research from Bitcoin Postage.
More than 10% of surveyed American millennials say they’ve received a larger-than-expected crypto tax bill after selling digital assets — an event that typically triggers federal capital gains taxes, or taxes on profits from such sales. Additionally, some U.S. states impose their own capital gains taxes on cryptocurrency transactions, potentially increasing the overall tax burden for investors.
Overall, just 62% of respondents reported being aware that generating profits from crypto sales was taxable.
Compared to millennials, only 8% of surveyed Gen Z individuals (born between 1997 and 2012) and 5% of surveyed Gen Xers (born between 1965 and 1980) were surprised by their crypto tax bills.
Crypto, however, remains a popular investment strategy for millennials, who a separate study shows are highly likely to invest their tax refunds in cryptocurrency markets. Bitcoin, the world’s largest cryptocurrency, is currently trading near $84,059.
Among all states, New York had the highest percentage of crypto investors receiving unexpected crypto tax bills, with over one-fifth of surveyed New Yorkers (21%) reporting they were hit with unanticipated tax liabilities related to their crypto transactions.
Gender differences were also notable, with women coming out on top: crypto tax bills surprised 11% of surveyed men, but only 4% of women.
There was also significant geographic variation in knowledge of crypto taxes, with Wisconsin ranking highest — 77% of investors there knew about crypto taxation — while Florida ranked near the bottom, with only 43% of investors aware.
The firm surveyed 2,457 Americans about their taxes, though Alaska, Montana, North Dakota, Vermont, and Wyoming were excluded from the survey response.
