Bitcoin
Bitcoins and other cryptocurrencies have taken the financial world by storm and have quickly become one of the main payment instruments. You can use bitcoins to buy a multitude of goods, but the IRS considers them assets, therefore taxable, and they do not play around. For example, in 2019 the IRS sent more than 10,000 letters to people who did not report cryptocurrency transactions.
If the bitcoin you used to buy something has a higher value than you actually paid for it, you’re required to pay taxes on your profits at capital gains rates, similar to stocks and bonds. If the payment you receive from your employer is in a virtual currency, you must report it in your W-2 form and add the fair market value of the currency to your income.
