Dear Splinterlands Player:
There is a community on Hive devoted to taxes and recently this topic has been raised; How to Do Crypto Taxes? It seems complicated in the USA, but there are options to have someone do this for you. Automating your crypto gaming taxes makes it simple to report earnings and stay on the right side of the tax rules.
Introduction:
The government treats digital coins and NFTs like property, which means you usually pay taxes in two different ways:
- Income Tax: When you earn rewards or tokens in a game, you pay tax on what they are worth in US dollars the exact day you get them. Casual players report this as extra income, while serious players who treat gaming like a business report it as self-employment income.
- Capital Gains Tax: When you trade those earned tokens for another crypto, sell them for cash, or buy in-game items, you pay tax on any profit made since you first received them.
Simple Steps to Automate Your Taxes
1. Collect Your Wallet Addresses
- Gather all public wallet web addresses you use for your games (like MetaMask, Solana, or Polygon).
2. Pick a Tax Program
Choose an online tax website that automatically connects to your wallets, reads your game history, and tracks exact prices:
* Koinly: Connects to wallet addresses to read token claims and trades.
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Cost: Free to track history; tax reports cost between $49 and $199+ per year based on your activity.
* CoinLedger: Built specifically to track play-to-earn game moves and NFT trades.
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Cost: Free to track history; tax reports range from $49 to $499 per year.
* CoinTracker: Reads multiple wallet addresses and automatically fills out government tax forms.
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Cost: Free basic tracking; tax plans run from $29 to $599+ per year.
* TaxBit: Connects directly to different blockchain programs to track your moves.
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Cost: Starts at $0 for supported partner networks, with paid options depending on total transactions.
3. Let the Software Group Your Transactions
- The program automatically splits your moves into regular income (for earning rewards) and capital gains (for trading or cashing out).
- It also adds network fees (gas fees) to your costs, which helps lower the total profit you have to pay taxes on.
4. Download and File Your Forms
- Download the finished tax forms from your chosen app and add them to your tax filing software.
- Make sure to check "Yes" on your main tax return when asked if you earned or traded digital assets.
(Note: In-game money that stays locked inside regular video games—like V-Bucks—does not count as crypto and does not require tax reporting.)
Tax Community
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Recent Tax Artciles concerning Gaming Taxes:
@shortsegments
An Eight year Hive Veteran, @shortsegments is introducing a new community to Hive to focus on Taxes. I hope you will subscribe and engage with authors and content consumers there.
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