According to new research from Bitcoin Post Office, more and more Americans are being caught off guard by crypto tax bills, with millennials at the top of the list of those who were surprised when they received their huge tax bills on April 15.
More than 10% of U.S. millennials surveyed said they received a higher-than-expected cryptocurrency tax bill after selling digital assets – which typically triggers federal capital gains taxes, which are taxes on profits from such sales. In addition, some U.S. states also impose capital gains taxes on cryptocurrency transactions, which can increase investors’ overall tax burden.
Overall, only 62% of respondents said they knew that profits generated from cryptocurrency sales were subject to tax.
Compared to millennials, only 8% of surveyed Gen Z (born between 1997 and 2012) and 5% of surveyed Gen X (born between 1965 and 1980) were surprised by their crypto tax bills.
However, cryptocurrencies remain a popular investment strategy for millennials. Another study shows that they are very likely to invest their tax refunds in the cryptocurrency market. Bitcoin, the world’s largest cryptocurrency, is currently trading at nearly $84,059.
New York had the highest percentage of cryptocurrency investors who received unexpected crypto tax bills of any state, with more than one in five New Yorkers surveyed (21%) saying they had experienced an unexpected tax liability as a result of crypto trading.
Gender differences were also evident, with the difference being greater for women: 11% of male respondents were surprised by a crypto tax bill, but only 4% of women were surprised.
There were also significant geographic differences in investor awareness of crypto taxes, with Wisconsin ranking highest — 77% of investors understood crypto taxes — while Florida ranked lower, with only 43% of investors understanding crypto taxes.
The company surveyed 2,457 Americans about taxes, but Alaska, Montana, North Dakota, Vermont, and Wyoming were not included in the survey.
