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You Make the Call - July 10, 2025

Published:
By: NATP Staff

Question: Maya is a freelance software developer. In 2025, she completed a project for a client who agreed to pay her in Bitcoin (BTC) instead of U.S. dollars. The client transferred 0.02 BTC to Maya's digital wallet. Is this taxable to Maya?

Answer: Yes, it is taxable to Maya. Maya must pay taxes on the virtual currency (aka cryptocurrency) she receives. When receiving cryptocurrency in exchange for services, it is considered taxable income. For tax purposes, cryptocurrency is treated as property and must be reported as ordinary income. The amount of income is determined by the fair market value (FMV) of the cryptocurrency in U.S. dollars on the date it is received.

In Maya’s case, since she is operating as a business rather than an employee, she should report her earnings from these payments as self-employment income.

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NATP Staff

The NATP team is dedicated to supporting tax professionals with expert insights, industry updates, and resources that help them serve their clients with confidence.

Information included in this article is accurate as of the publication date. This post does not reflect tax law changes or IRS guidance that may have occurred after the publishing date.