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Millennials are most likely to report cryptocurrencies on their 2021 tax returns

Delbert Williams IIBy No Comments3 Mins Read

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A new study of 2021 federal income tax returns reveals that young Americans are familiar with cryptocurrencies.

Among individual filers, 4.5% of millennials reported taxable cryptocurrency transactions last year. That’s the highest percentage of any other generation, according to a report from tax preparation software provider TurboTax.

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research result

The percentage of people who reported taxable cryptocurrency transactions was much lower than the percentage of Americans who said they traded cryptocurrencies in general.

Overall, 2.9% of tax filers have included cryptocurrencies on their 2021 returns. TurboTax compared this figure to a Pew Research Center survey that found 16% of U.S. respondents had invested in, traded, or used cryptocurrencies.

  • After the millennial group aged 25-34, Americans aged 35-44 are the second most likely to report cryptocurrency transactions on their tax returns, followed by those aged 18-24.
  • TurboTax found that filers’ likelihood of reporting crypto transactions on their tax returns was highly correlated with income, making filers more money.
  • There were also regional differences in crypto tax reporting. Western filers were most likely to report crypto transactions on their 2021 tax returns, followed by Northeastern filers.
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next step

Crypto tax reporting rules have changed for the 2023 filing season.

  • Beginning with tax year 2020, all taxpayers were required to answer the virtual currency question at the top of Form 1040. Given that the IRS believes that cryptocurrency trading is grossly underreported, the question stands out because he reflects the IRS’s focus on taxing cryptocurrencies. I’m here.
  • Cryptography questions have been edited for this year’s filing season. It currently looks like this: or (b) sell, trade, give away, or otherwise dispose of Digital Assets (or any financial interest in Digital Assets)? The filer must answer yes or no.
  • Those who checked the “yes” box are required to report income related to those transactions.

Conclusion

Millennials report cryptocurrency transactions in more taxes than other generations. However, even among millennials, only a small percentage of filers report crypto trading.