Crypto is taxable in the US. Every trade, swap, and purchase is a taxable event for H1B workers. Here's how to track and report it.
Overview
Crypto is taxable in the US. Every trade, swap, and purchase is a taxable event for H1B workers. Here's how to track and report it.
Why This Matters for H1B Workers
H1B workers face unique investing challenges: potential return to India, PFIC tax traps on Indian investments, dual-country financial planning, and uncertainty around green card timelines.
Key Investment Accounts for H1B Workers
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| Account | Tax Benefit | 2026 Limit | Best For |
|---|---|---|---|
| 401(k) Traditional | Pre-tax, reduces taxable income | $23,500 | High earners |
| Roth IRA | Tax-free growth | $7,000 | Long-term wealth |
| HSA | Triple tax advantage | $4,300 | HDHP plan holders |
| Taxable Brokerage | No special tax | Unlimited | Flexibility |
Step-by-Step Getting Started
- Step 1: Max your 401(k) match first (free money)
- Step 2: Fund Roth IRA up to $7,000/year
- Step 3: Additional 401(k) contributions above match
- Step 4: HSA if on High Deductible Health Plan
- Step 5: Taxable brokerage for anything above
India Investment Warning
Do NOT hold Indian mutual funds on H1B. They are classified as Passive Foreign Investment Companies (PFICs) and face punishing US tax treatment (excess distribution method). Sell before becoming a US resident alien, or hold India ETFs listed on US exchanges instead.
Practical Tips
Crypto is taxable in the US. Every trade, swap, and purchase is a taxable event for H1B workers. Here's how to track and report it.
For most H1B workers, a simple 3-fund portfolio (US stocks, international stocks, bonds) in tax-advantaged accounts is the optimal strategy. Automate contributions and rebalance annually.
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