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Self-Employed Crypto Traders! Tax Deductions You Should Claim

As a self-employed cryptocurrency trader, you're not just managing digital assets—you're running a business. Claim these tax deductions to thousands of dollars.

September 02, 2025

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Key Highlights:

  • 8 Common Tax Deductions for Self-Employed Crypto Traders

  • Records for Tax Deductions

  • 8 Uncommon Cryptocurrency Tax Deductions You Shouldn’t Miss

  • Maximize Your Cryptocurrency Tax Deductions

Many self-employed traders miss out on these savings simply because they don't know which expenses qualify. Let's explore both common and unique cryptocurrency tax deductions that could significantly reduce your tax bill this year.

8 Common Tax Deductions for Self-Employed Crypto Traders

These standard business deductions apply to most self-employed individuals, including cryptocurrency traders. Make sure you're tracking these expenses throughout the year.

1. Home Office Expenses

If you use part of your home regularly and exclusively for trading, you can deduct a portion of your rent or mortgage interest, utilities, and home insurance. Think of it as claiming a slice of your housing costs for your workspace.

For more information on how to properly claim home office deductions click below:

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2. Internet and Phone Bills

The percentage of your internet and phone services used for trading activities is deductible. If you use these services 50% for business, you can deduct 50% of the costs.

3. Computer Equipment

Computers, monitors, and other hardware used for trading are deductible business expenses. For expensive items, you may need to spread the deduction over several years through depreciation.

4. Software Subscriptions

Trading platforms, tax calculation software, and portfolio trackers are all deductible business expenses. Any tool that helps you trade or track your crypto activities counts.

5. Professional Education

Courses, books, and webinars about trading or cryptocurrency taxation are deductible. Investing in your knowledge is considered a legitimate business expense.

6. Professional Services

Fees paid to accountants, tax professionals, or financial advisors who help with your trading business are deductible. Expert advice is a recognized business expense.

7. Business Travel

Travel to crypto conferences, meetings with advisors, or networking events can be deductible. Keep detailed records of the business purpose for each trip.

For more information on how to properly claim travel deductions click below:

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What are the lesser-known strategies to legally maximize your travel deductions while staying compliant with IRS regulations?

taxationintel.beehiiv.com/p/travel-expense-deductions-tax-secrets-every-business-owner-should-know

8. Health Insurance Premiums

Self-employed traders can often deduct health insurance premiums for themselves and their families. This is a significant deduction many traders overlook.

Records for Tax Deductions

Keeping detailed records of these common expenses throughout the year will make tax time much easier. Use a spreadsheet or expense tracking app to organize your deductions.

8 Uncommon Cryptocurrency Tax Deductions You Shouldn't Miss

Beyond standard business deductions, crypto traders can claim several unique expenses specific to digital asset trading. These specialized deductions are often overlooked but can significantly reduce your tax burden.

1. Exchange and Trading Fees

Every fee you pay to cryptocurrency exchanges can be deducted as a business expense. This includes trading fees, withdrawal fees, and subscription costs for premium exchange services. For example, if you paid $1,500 in various exchange fees throughout the year, that entire amount can be deducted from your taxable income. Keep detailed records from each platform you use.

2. Blockchain Transaction Fees

Gas fees and network transaction costs are deductible when they're part of your trading business. These fees can add up quickly, especially on networks with high congestion. For instance, if you paid $800 in Ethereum gas fees while moving assets between wallets for trading purposes, these costs can be deducted. Use blockchain explorers to document these expenses throughout the year.

3. Mining Equipment and Electricity

If you mine cryptocurrency as part of your trading business, the equipment and electricity costs are deductible. This includes mining rigs, GPUs, cooling systems, and the additional electricity used. For example, if your mining operation increases your monthly electric bill by $200, you can deduct $2,400 for the year. Keep utility bills and compare them to pre-mining costs to calculate the difference.

4. Staking and Node Operation Costs

Running validator nodes or staking infrastructure incurs costs that are tax-deductible. This includes server rentals, maintenance, and technical support services. For instance, if you pay $50 monthly for a virtual private server to run a validator node, that's a $600 yearly deduction. Document all expenses related to maintaining your staking operations.

5. Security Hardware and Software

Hardware wallets, security keys, and specialized security software are deductible business expenses for crypto traders. Protecting your digital assets is a legitimate business cost. For example, purchasing a $150 hardware wallet, a $60 security key, and $200 for premium VPN services would give you a $410 deduction. Keep receipts for all security-related purchases.

6. Tax Loss Harvesting Costs

Fees associated with strategic selling of assets to realize losses can be deductible business expenses. This includes transaction fees and professional advice specifically for tax loss harvesting. For instance, if you paid a crypto tax specialist $300 to help optimize your tax loss harvesting strategy, that fee is deductible. Document all costs related to this tax planning strategy.

7. Specialized Research Services

Subscriptions to crypto research platforms, market data services, and trading signal providers are deductible. These tools help inform your trading decisions and are considered necessary business expenses. For example, if you pay $50 monthly for a premium research platform and $30 monthly for trading signals, that's a $960 yearly deduction. Save subscription receipts and payment records.

8. Bad Debt Deductions for Failed Platforms

If you lost funds due to an exchange bankruptcy or platform failure, you may qualify for a bad debt deduction. This applies when your loss is complete and final with no chance of recovery. For example, if you had $5,000 worth of assets on an exchange that went bankrupt and liquidated, you might be able to claim this as a business bad debt. Consult a tax professional, as these cases require specific documentation.

Maximize Your Cryptocurrency Tax Deductions

As a self-employed crypto trader, claiming all eligible deductions can significantly reduce your tax bill. Keep detailed records of both common business expenses and crypto-specific costs throughout the year. Remember that tax rules for cryptocurrency continue to evolve, so staying informed is essential.

The IRS treats cryptocurrency as property, not currency. This means every trade, sale, or exchange is a taxable event, but it also means you can claim business deductions related to your trading activities.

While this guide covers many potential deductions, cryptocurrency taxation is complex and constantly changing. What works for one trader might not apply to another based on your specific situation and trading volume.

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