Crypto is considered a digital asset, and the IRS treats it generally like stocks, bonds, and other capital assets. Like these assets, the money you gain from crypto is taxed at different rates, either as capital gains or as income, depending on how you got your crypto and how long you held on to it.
If you sell, convert or spend crypto, it is taxable. Selling or exchanging it results in a reportable taxable gain or loss. As well, spending crypto is essentially the same as selling it, so taxable as a capital gain. The capital gains tax rate for long term (held more than a year) is between 0% and 20% depending on your income. Short term capital gains (held less than a year) are taxed at your ordinary income tax rate.
If you get paid with crypto, either in exchange for goods and services, mining, staking, getting crypto from hard forks, airdrops or other incentives and rewards, that is taxable as income, so it would be subject to the ordinary income tax rate for you.
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