What Counts as a Taxable Event?
Selling crypto for fiat currency (e.g. BTC → USD) is a taxable event. So is trading one crypto for another (e.g. BTC → ETH) and in many jurisdictions, using crypto to buy goods or services.
Simply holding (HODLing) crypto is not taxable. The tax event occurs at the point of disposal.
Capital Gains vs Income Tax
Most jurisdictions treat crypto gains as capital gains. Short-term gains (assets held under one year) are often taxed at a higher rate than long-term gains.
Mining rewards, staking income and airdrops are usually treated as ordinary income at the fair market value on the date received.
Record Keeping
Keep records of every transaction: date, amount, price in your local currency and purpose. Most major exchanges allow you to export your full transaction history as a CSV file.
Crypto tax software (e.g. Koinly, CoinTracker) can automate the calculation of gains and losses across multiple wallets and exchanges.