|Increase in U.S. taxpayers trading cryptocurrencies|
Data from the IRS show that around 2.3m U.S. taxpayers traded cryptocurrencies in 2020 - a 149% increase from 2019, when nearly 928,000 taxpayers answered “yes” to a question of whether they had received, sold, sent or otherwise acquired virtual currency. Bloomberg says the figures underscore crypto's growing popularity before this year's painful market rout, and the extent to which Americans may be exposed to losses as platforms collapse. However, it notes that the bump may also reflect the IRS's efforts to ensure that filers disclose holdings and pay taxes on any gains. The IRS report on individual tax return data also showed Americans’ unemployment compensation jumped to $405bn in 2020, from $21.4bn in 2019. Despite the economic fallout from the pandemic, government relief payments and a rise in investors’ capital gains helped total U.S. individual income climb 5.2% to $12.7trn. Wages and salaries increased more slowly, by 1.7% to $8.4trn. The average federal income tax rate in 2020 was 12.6%, up from 12.3% in 2019. Americans earning from $2m to $10m paid the highest average rate: 28%. The richest taxpayers, earning $10m or more, paid less, at 25.5%, because their income was more likely in the form of long-term capital gains, which are subject to lower rates.