Crypto Mining Tax Deduction Guide for Equipment and Expenses (2026)
Deduct crypto mining expenses: hardware depreciation, electricity costs, mining pool fees, and business expense documentation for mining operation tax optimization.
Summary
Mining expenses are deductible against mining income. This guide explains hardware depreciation, electricity tracking, and expense documentation for miners.
Key Steps
- 1Track mining income: FMV of mined coins at receipt is ordinary income.
- 2Deduct hardware costs: mining rigs depreciated over 5 years (MACRS).
- 3Document electricity: track mining electricity separately from household usage.
- 4Deduct pool fees: mining pool fees reduce gross mining income.
- 5Separate business vs hobby: substantial mining activity qualifies as business with full deductions.