Bitcoin Forum

Please let me know if you have Knowledge or experience with this.

your question is vague because you didn't include where you live.

But to answer for the United States, as a miner, you must claim your earnings on your self employment tax calculation.  Then, you also have to pay any gains on the price movement of bitcoin.

Im mining at a place with no such thing. I want to know what my benefit would be compared to companies in other place.  Considering to offer small batches of 5ths for a certain price, you recieve btc without tax and Electricity at 0,05.

I do not understand what your trying to say above.  It sounds like you will be paying dividends, which would still be taxable to the end user in the U.S., although I do not understand what your business plan is.  If you want a more accurate answer you need to provide where you reside, where your customers will reside, and your business plan, otherwise, no one will be able to help you.

First of all, Who has chose you to represent them? Please   be more specific. I am not planning to put any business plan on a forum like this, I have been helpen a lot by Peopl.  If you chose not to help, dont rereply. However, if this is a cultural misunderstanding and you are interested in my plan, tell me.

I want to know my financial benefit from having no taxes on all my mining earnings.

Major operations in other countries do have this, do they Apple by it? Since bitcoin is hard to tracé. Are their different tax regulations for btc?

Yes typically in most countries you will have to pay some kind of tax on most income, this can include income on bitcoin mining.

You really need to talk to a tax advisor or a lawyer to get a better answer.

As a very broad answer, this is perfect.  I do not understand at all what your saying and have done nothing but try to provide the exact help you asked for, but there are hundreds of countries across the world, and each of them have their own tax rules.  Compound that with the fact that each customer may live in a different country with different tax rules and it is quickly revealed that you need to seek a person who is qualified in the area you want to do business in (and is fluent in your language, because your not getting your point across in English).

Exact. As well as the capital gains you might have from the Bitcoin Price Movements, as said above.

I don't really think many Miners do pay taxes. The current income mining generates is anyway very low, and many people simply avoid the taxes, apart from a few people.
The big mining companies, must be paying it due to obvious reasons , but at a personal level I very much doubt it. Even the daily bitcoin user, has only a small percentage who report taxes on money earned .

Regardless, whether or not a person chooses to pay it, legally, you have to.  And I guarantee that omitting disclosing the income on your tax returns will land you with much bigger fines from penalty and interest than actually giving it a good attempt.  Just because everyone else jumped off a bridge does not make it a good idea. The law clearly states it must be claimed.

I agree with you guys and was thinking the same. I am mining in Kurdistan (Irak). It has no tax regulations and if I chose to scale up, my benefit would be that taxes are zero and electricity is 0.05 ct for large scale operations ( current price for my operation @ around 10 TH is 0.02 ct.).
Low electricity, no tax....

Are their still people looking for hosting at those prices you guys think? Since I wont be spending very much on electricity and other expenses.

I think personal/private miners do not need to pay any tax if their income isnt big enough. Also, how should the government know that you are mining coins?!
But big companies that mine bitcoin will probably need to pay taxes if their getting alot of money. But also, how does the government know that you are mining? They have no proof until you show them your mining facility

Do not spread FUD when you have no idea what your talking about.  Just because, "you think" doesn't mean it is true, especially when there are plenty of more knowledgeable people above you giving the exact opposite response.

As to how the government would know, there are a variety of ways, and all of them end up with accusing you of fraud and forcing you to pay the tax, as well as, penalties and interest that will probably amount to more than you would owe originally.  Add in your time wasted responding to the IRS, and it would be much easier to just pay the tax up front and not lie to the government.

doesn't matter if you sell lemonade, apple pies or bitcoin mining.  you pay tax on all earnings.  of course, if you sell 250$ worth of lemonade you don't really have to declare it because its too small.  there is a threshold for declaration.

Its always recommended and legally bound to pay taxes for any mining operations, however if you are in a country where the laws aren't strict then you may get away by not paying your taxes.


As for that, I don't think governments of countries in Asia really know much about bitcoin or care about it, so yes you may skip, but to avoid any legal problem in the future, its best to pay it .

Yes you have to, but only on any profits you make, so probably not for most people, or very little.
It will be very hard to keep a track of, as each time you mine you will have gained capital, what is the price of that capital and what percentage of that is profit?  I guess you would work it out purely from a mining - electricity cost, then deduct the costs of computers, miners, coolers etc that you bought later.

There is software out there that can be used to help traders work out their tax to be paid, I guess that should work for mining too, luckily (kind of) the price of bitcoin is so low that most people are losing money and are tax exempt.  Don't forget to write that off next year as a capital loss though!

Kurdistan (Irak) is in War whit ISIS and IRAK goverment, you think somebody bay gear and send you at your hosting.I don't trust for law protection  in EU country like Germany,France,Spain,GB.
And also at finish imagine i invest and receive 100000 BTC from you,for BTC i don't pay tax but when i exchange BTC in fiat and pull to my bank acount € i must pay tax in €.in difference amortisation/exspense- income.

What?? So if I have a single antminer S4, is that deemable to be taxed in Canada?

What is the threshold for having to pay taxes of your profits?

Yes very good, we have 1 stupid person joining us. Kurdistan is in war since before 1900, you know who else is ? USA.

you should check the rules for canada about bitcoin, if it isn't regulated yet then i would pay anything, you can always bring that excuse if they call you

also for a small amount of pur eprofit, i would not pay regardless, they don't control small, evaders of taxes

as far as i do know you slhoud inspect a pool thet you are mining all alt and sha 256 coins are using like 1% to pool paymients tax but not the country tax direcly only when its converted to fiat.

i'm interested to this, because i'm running some miners here at home, if we can share your experience, would be really appreciated

Technically yes. It will depend on how Canada tread bitcoin though.
I would guess it would be a capital gain, in which case in Canada you would pay half of your normal income tax rate on it (remember, only on the profit i.e. after paying electricty and buying anything related to mining.)

As unrealized capital gains aren't taxed, it is more complicated, as is Bitcoin money, so have you relaized your profit, or does that only happen when it is in Fiat?

I woldn't worry about it, but it could be an issue for big miners in the future.

(I am not an accountant and am not offering tax advice)

last war in USA be before 150 year 1861 - 1865.
how can you guarantee for  gear. if you betray bank guarantee recognized by EU banks for gear.Who is the insurer in case of fire.in the event of a dispute which the court has jurisdiction

It depends if you do it as a hobby or for a living if you do if for a living you have to pay taxes but if you do it as a hobby there is a maximum amount you can earn before you have to pay taxes depends on where you live

In the US, income earned as a hobby is just as taxable as income earned as a business even if you only earned $1 in net income. However, there are limitations on using losses generated from a hobby to offset other income, whereas there is no similar limitation on business losses.

Yes  , any income is taxable

i don't think so, some income are not taxable especially if they come from second hand stuff, also below a certain amount you are not taxable at all no matter what you are doing

Again this is for the U.S. and for income tax purposes: some income is not subject to tax like interest on municipal bonds, however there is no de minimis exception on income that is otherwise taxable including selling second hand stuff at a profit.  There are de minimis thresholds for reporting income if you are a payor.  For example a bank or brokerage firm doesn't need to give you a 1099 if your account earned less than $10.  That doesn't mean your nominal interest income isn't taxable, it just means that the bank doesn't need to report it to you or the IRS.

For sales/use tax purposes, some jurisdictions in the U.S. exempt sales on second hand personal items like in a garage sale.

Hi

For me its more like a hobby indeed. I follow an economic study and work for Rwe (german Electricity company). My father works for a dutch cooling and heating company and will arrange al the cooling. Prove and pics later (promiss). I have 8 ths devices ready those will be shipped this week and arrive in a month from now. Have it set up and slowly see from there. Profits seem to be stable for a long period. Electricity price is 0,03ctKwh for the 8 Ths including cooling and server. Internet is 30euro Per moNth. Appartement is mine. Taxes I might pay in form of Electricity price which goes up to maximum of 0,05 Ctkwh.

I would not guarantee anything. I will have good customer care and personal contact instead. Might keep it small and not provide any hosting.

What do you guys do about Cloudmining ? I have all my cloudmining earning generated to paper wallet address, which I have never paid taxes on. Could I run into some trouble, if I don't show it as earned amount for the taxes ?

it does not make sense to tax a second hand stuff, otherwise if i continued on selling second hand stuff at the end of the day i would be in negative on that item/items...

In Europe it depends on the money you're getting from it. If you're earning €50 a month from mining nobody is going to ask you to report it or try to prosecute you, but if you're doubling your monthly income with a "hobby farm" it may be difficult to hide.

Here is the best way to think about it (apart from reading the code), if today you are worth $5000 and tomorrow you are worth $5001, 99.9% of the time, whatever you did is a taxable event.

For anyone wondering, whether you mine, buy/sell bitcoin, buy/sell bitcoin equipment, really anything you do crypto related, is taxable in one way or another in the United States.

what i mean is that usually you don't gain anything on second hand stuff, unless you manage to sell it at a higher price than the one which you bought it

so if you bought a 5k thing, then you will probably sell it at 4k or less(if you are good enough), and there is no gain here....so it should not be taxable

If you want to tax this, it surely has to be with Capital gains taxes.

So you subtract your utilities {electricity cost} and the mining hardware cost to acquire the real "profit" you made after you sold the coins.

Some people only reach ROI or make a profit after years, so it's difficult to know what or when to tax.

For some people, it's actually a expense, and they never reach ROI or a profit for that matter.  :(

only little b*tches that support and enslavement tyrannic empire pay taxes.

flee the usa or any other country and get offshore to sovereign water / land. While you still can...

Not even close to kidding.

hope this helps w your answers.

Yes that answer definitly tells a lot about you.

kick rocks shill. Go enjoy that quarantine. Says what that I enjoy living free and not paying into the military / medical / prison industrial complex and perptuate the hamster wheel cycle?

@zekarsalih are you sure you came to the right forums? BTC is about trust and freedom? Are you sure you did not mean to go to the www.ObamaForThirdForum.com ?

 ::) ::) ::) ::) ::) ::) ::) ::) ::) ::) ::) ::) ::) ::) ::) ::) ::)

the only waay to change the shit show in the usa is to quit paying into the empires kitty. All of these political marches, protests, free keene, film the police, etc etc are useless if these same people are paying into the emire....

you want some real ''change''.. Quit paying into their system. Pun n tenders. Shoot i meant pun intended.

discontinuing use of your drivers license and paying into that system is another great way to stick it to da man.

#uber

#notax

#freedom

The electricity costs do not factor into the capital gains tax owed.  The hardware price would.  It is not difficult to know what to tax, you just have to keep track.  I do not think you know what your talking about based on your answer to be honest.  Please read above where I talked about capital gains and self employment tax.  They are very separate and both apply to different aspects of mining.

You have no income in your example assuming it is a non-business asset.  Generally the term income in the U.S. for tax and accounting purposes is defined as revenue less expenses.

However, if you bought a used S3 for $100 and you report your revenue and expenses of your mining operation as a sole proprietorship on a Form 1040 Schedule C, you may have taken a §179 deduction for the purchase price of the S3.  If that's the case and you sell it later for $90, you will have a taxable gain of $90. 

For those in the U.S. you should read the following guidance from the IRS:

It will answer many of the questions in this thread and correct some mis-information.

http://www.irs.gov/pub/irs-drop/n-14-21.pdf

DO NOT PAY TO IRS puertorican  KITTY DO NOT PERPETUATE TYRANNIC EMPIRE

all usa comes tumbling down as the break out shackles and chains to try to force citizens to pay...

problem solved...

Why are we still discussing taxes ???

it depends where do live and what nodes relay your transactions.

What earnings, you shouldnt be paying taxes unless you are well into the profit and most who think they made alot of money are not including their costs properly.     A business can carry over losses for six years against profits hence you get those headlines, megacorp makes record profits but operates tax free.   People have to be more careful but I reckon you should not pay tax on your little home operation.   
Any 'profits' Ive made I just used to buy computer parts, since I need it as part of the operation I think its allowable cost against earnings

You still need to file the returns to show the capital losses of the last few years so that you can claim them back now that you make the capital gains.
You 'reckon' they shouldn't pay, but if someone from the IRS looks into it, they will disagree with you.

The point about not paying tax on selling second hand stuff, if you have already deducted it, then you would have to pay tax on the 2nd hand sales.  They won't let you double count it.

Bitcoin mining is an absolute tax mess!  I wonder if the IRS will be bothered about it unless someone starts making millions from it.

New rule of the thread, unless you have read the tax code of your respective country, and the rulings about how bitcoin is taxed, you are not allowed to post in this thread.

The countless, "opinions" expressed are not only wrong, but severely misleading to someone who may sincerely want to know how they should be treating their bitcoin earnings.  You, like many before you, are unknowledgeable in the matter, wrong, and spreading misinformation on your opinion.

yes bitcoin miners or any other cryptocurrency miner needs to pay tax too..and additnally they have to pay the electricity bills and many more..hope u go for asic mining

NO you dont. You can choose to not pay.

Why ever you pay tax? thats free all cash in hand type of money, but if you want to pay extra be my guest. Elecrcity bills is the only bill so I dont know what else which you need to pay regardless if it wasnt mining youd still be paying for.

The difference is not depositing the money in a checkings account.

This is the most uneducated post I have ever read, which leaves me to believe that the only reason you haven't been audited and found guilty of tax evasion is because you don't make enough for it to be worth it from the IRS's standpoint.  You can also choose to rob a store, but its still illegal!  Also, the IRS can still know if you are hiding cash if it never hits your bank account.  Don't be an idiot and keep your dumb opinions to yourself.

exactly. You choose to pay tax.

bitcoin is about changing and decentralizing the /'system'' continuing to pay into the empire kitty is only perpetuating the cycle that is everything bitcoin stands to topple!

Empire kitty?  I bet you have one of those hipster Anonymous V for Vendetta masks as well.  Stop being a leech and support the infrastructure for things like the electrical grid and healthcare that you are indirectly (ie immunizations for the masses) and directly (internet access that you have access to without some random company censoring everything you write) using.

The 12 year old children on this forum....

I can see the little kids have come out to post since mom must be late from work.  If it's there's an income derived from it there is the duty to pay tax - you don't have to overpay and can use all the correct deductions, but it is still a duty.

Those babbling on about military industrial complexes wouldn't bother to help a woman getting mugged let alone ever enlist to defend their homeland.  It's easy for cowards to press those 110 keys in their ergo chairs...

thread closed

For Australian's Knowledge...

The ATO ruled that if u mine as a company for profit u must pay tax.

As an individual u can earn up to $10,000 before any tax is paid..

As a Aussie individual with 3th of power (I know its not much but prob more than most) i have only made about 12 coins in the last 12 month at approx $300 a coin thats $3600 minus about the same in power costs i neither made nor lost money

Not that the tax man should get any of it anyway, Greedy bastard he is..

I would never make mining a full time job and I refuse to pay taxes on my hobby. That is where I stand.
Work and pay your taxes. Keep your BTC for "fun" ;
 
P.S. Don't buy a Lamborghini if you can't afford one with your day job!

 ;D Mining is on a need to know basis and NOBODY needs to know! ;D

I would assume it depends on the jurisdiction. Obviously, in the US, you would have to pay tax on miner earnings. I'm not sure about other places.

I thought that when you transfer the virtual money into US currency then it is extra income in US dollars. Come tax time I could include say 100 dollars as income. I have no income now and just if I were mowing lawns would include this earned income. I wonder if I can just say mining is my side job so any extra income I can report once it is transferred into USD from Bitcoin.
The difficult part is what to submit with the tax form since the 100 dollars doesn't come with a W2 form. I know their are earned income thresholds.  The scenerio is I have no income now and would like to convert a bitcoin into us dollars into my bank account. Did I earn the income from working as a miner? Did some one just pay me 100 dollars for work i.e mowing the lawn. Can one just report income from this side job and what is needed for proof of payment?

Seems like many of you are interested in this topic. For me one answer stands out. Let's agree all not to pay tax. And if our Bitcoin becomes more valuable compared to your desired currency and we get rich, help others. In my opinion we are paying enough tax and it does not help us. I currently live in the Netherlands, my operation wil hopefully launch in 3 weeks. Operating from KRG region near boarders of Turkey. We have no currency and why not take Bitcoin and be a step ahead?

it is better to pay the bills with your real job and leave bitcoin earned from mining, in cold storage for now, so you can avoid any issues with taxes, and you do not need to pay them at all

if you are forced to use bitcoin, by dumping them because of emergency you can stay below 600 in one year for USA, or below 1k in one year for European(they are starting to take action against this)

Don't tell the government, but I never put it on my earnings.

I live in the us.

I ended up losing money though, so it didn't matter. But I wouldn't of anyway.

well all countries need to be able to let governement know of peopes actions but not impose taxes let them peope be more aware of the need to be taxxed and let the polititians do the work in countries that are needed of bitcoin if the tax of mining and all bitcoin trades come to majoity of countries they are able to put bitcoin into 1000 dollars a pieace and tha can also be good the tax aceptacy and less anon of the coin

Mining is an open accounting system which is purely based on peer to peer networking system, and the users in the network helps each other to send and receive the payments safely and securely without being any involvement of central authority, so there is no way that the terms of Tax applicable occurs here.

Naturally miners don't pay tax over their earnings but tax can be included when converting to fiat but spending bitcoin directly is tax-free.

I believe tax should paid only if mined BTC sold right away. So one pays for selling, not mining.

Another analogy. You do not pay taxes for fruits growing in your garden. Until you sell those fruits.

also miners should not pay taxes, because they are actually already paying those, via electricity bills, so it is included

if miners are intelligent they should keep their bitcoin and dump only for paying electricity, which is their taxes

@amph,  what if the government of the country subsidizes electricity and actually loses money in the sales of electrcicity?

look at it, like it was another thing, for example instead of mining you pay a big portion of your electricity, because you need to wash clothes every hour or you need to eat foods only cooked in the oven(standard oven consume 1k per hour), you will need to pay a tons of electricity for that

do you need to pay taxes on top of that? i don't think so

Yes they should.

Do they? .... probably not ....

Also completely depends on location.

Miners don't pay taxes because mining has nothing to do with united states currency. Maybe if you have a mining operation close to the point where it's earning enough as a second job, and you're converting the bitcoin into usd on a consistent basis you would want to look into it, but if you're only dealing in bitcoins there's no reason you should have to pay taxes on anything, all you're doing is simply using your electricity to solve calculations :)

I run a small mining operation in Australia and we pay our tax, in fact we're always dealing with the accountant to keep the books up to date.
We pay tax on the income we earn through bitcoin mined, bitcoin traded and from all the sales made when re-selling mining equipment.

That's good to know.

Though I wonder if taxes include the Bitcoin price change (for example, if Bitcoin value raises regarding Fiat currency)

Miners should keep track of gear purchased, any expenses.  For example my summer mining area caused a decent expense.   And of course electricity used.

For me converting into a nice summer area with wiring and everything was a pretty good amount of expense.   It was worth it yes but for taxes I record everything as far as costs.

Don't feed the pigs your bitcoin revenue.