Watching investment returns shrink just as they are about to be received is a common pain point for many crypto asset holders, all because of poor tax planning. Global cryptocurrency tax regulations are tightening, and the standards for taxing stablecoin investment yields are becoming clearer. The problem is that many people are completely unaware of the existence of tax costs, resulting in potential earnings being heavily discounted or even penalized due to high taxes and penalties.

To maximize your returns, you need to do three key things: first, file compliance reports; second, seize tax incentives; third, deduct costs reasonably—provided you follow the regulations of your region.

First, it’s important to understand that different countries and regions have completely different tax classifications for stablecoin investment yields, which directly determine how much tax you owe. The US considers these yields as "ordinary income," taxed at progressive rates between 10% and 37%. Most EU countries classify them as "capital gains," with tax rates between 15% and 25%. Singapore and the UAE currently exempt crypto capital gains from tax. Hong Kong also does not tax individual crypto investment income. You must first clarify the rules applicable to your location.

Taking the US as an example, the reporting scope is broad—basic income, dividends, and rewards from point exchanges all need to be reported. Singaporean users do not need to report capital gains, provided their funds are sourced legally and compliantly.

One of the most practical tax-saving tips is "utilizing tax incentives." US users can offset stablecoin investment income with losses from other crypto asset trades, deducting up to $3,000 of ordinary income annually, with any excess carried forward to subsequent years. This can significantly reduce the taxable amount.