Bitcoin Forum

How do you do this?

File it on your taxes you file every year as 1099...

I'm wondering how that would work. Does the IRS recognize any currencies other than USD? Or do you have to declare them on your tax return only when you convert them back to USD?

I think that when you sell, you pay taxes on whatever profit was made (this would be considered "miscellaneous income" and filed on a 1099).

That said, I am not an accountant...you're best off seeking tax advice from a professional rather than random internet strangers.

My issue is, they are not bonds or stocks. It will be far more difficult to prove what they were acquired for and I would hate to be taxed on the whole exchange and not just the profit gained in the exchange.

Its really sad to keep seeing this question, its like a slave being let out of his cage, dosnt know where to go or what to do.


you have been given the tools of freedom, be creative, why contribute to there fiat money ponzi scheme that is creating hell on earth for many people foreign and domestic?

why not calculate your taxes owed, do some creative magic with bitcoin, take 10% off for you and yours then donate the rest to local charitable projects?

Sounds great but the whole avoidance thing is risky. Unfortunately they report bank transfers to the IRS and the polish cards seem like they would take forever.

Related:
 - http://en.bitcoin.it/wiki/Tax_compliance

Bitcoins should be seen as a commodity.

I don't even file my taxes. Havent since 09. Fuck em Bastards

This, but if you must declare, it's capital gains tax and only if profit is realized (cashed out)

I have wondered this too. Even if you treat it like a commodity when you mine a coin what is your cost basis when you sell it, $0 or the price of electricity it took to mine it?

If you're living in a country with taxes, you are receiving the benefits of various public goods. If you don't think this is the case, go live in a tax haven - but if you're living in a first world country and not paying those taxes you are free-riding and morally in the wrong. Don't do that.

We pay taxes on gasoline, utility bills,  phone and every other type of purchase we make. We're already taxed enough. Plus, there's no reason to volunteer to give the government more money when they've already proven they can't manage what they already have.

In my country most taxes are spent on war rather than public goods. I would happily pay my full amount if there were more libraries and parks rather than drones and bunker busting missiles. Just my .02.

Maybe choosing your representatives better would work?

On this note, Mining is a profession. So general income taxes would be suitable and under $20,000 (if single) iirc is exempt for fed. Now, that is gross income which includes your day job.

PAHAHAHAHAHHAAAA!!!

Someone on this forum actually believes we choose the people who claim to represent us?

No tax to pay until you swap them for legal tender and then don't forget to remove your electricity costs, equipment costs, ASIC scam losses, to come to your final capital gains.

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I lulz at this, hard

You are entitled to your opinion and so am I.  Piss off

..You do know there is no legal requirement or precedent for you to pay taxes...at all right? Just ask any former IRS Agent. They will tell you the same.

Good luck with in your future endeavors!!  ???

You don't?

thats bad ass. i file my taxes because they give me tons of money back every time and im no where near interested in principals enough to walk away from that.

A couple things...  you have your withholding setup wrong if you get a large refund every year - AND if you ever do have substantial income you're in the IRS system.

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The money you get back is actually money you lend the IRS for them to profit from it during the year and then they give you what's yours and they keep the interests they made.

What about claiming capitol gains? That is, pay on the value appreciation at the current 20% rate upon use of coins for purchase, or upon turning them back into dollars.

Think of it the same as cash. If you are a business owner and accept cash for the goods/services you provide, you are required to report these sales and pay taxes on them. It's exactly the same if you accept Bitcoin. To some extent, it's based on the honor system. There are ways people get caught failing to report or under-reporting income but of course there are ways to hide unreported income. I'm not advocating it, of course. Just stating the reality of it.

If you are making money speculating in Bitcoin as a currency, then you wouldn't be expected to report or pay income tax on any capital gains until you cashed it out. Instead of "cashing out" by exchanging your Bitcoin back into your local currency, you could roll it over into silver. There are at least two websites I've found that accept Bitcoin for silver and gold.

If you are making a couple hundred dollars a month or less you can probably claim it is just a hobby and not have to worry about it impacting your taxes. But I'm no expert.

As someone said, if you do not convert your coins to legal tender, there's no need to pay taxes. Basically, stay in the bitcoin domain, support the bitcoin and you will never have to pay a single dollar in tax. If you buy an car, or a house using bitcoin, it is sure that both parties, seller ad buyer understand the bitcoin and can agree to simply gift the house or car or property to someone without having to pay sales taxes!
just s thought.

As long as you hold only BTC. Once you've exchanged into USD or the FIAT of your choice you'll need to report that income or risk some serious headaches, fees and fines.

I see. That's a very interesting point of view, but I'd like to add my in order to fuel discussion.

In a so-called democracy two parties created a totally non-proportional, election law. So whatever happens you end up with two choices which do not differ that much. That's the USA.

I paid taxes for years while I had a relatively small income. When the income grew, I continued paying my fare share of taxes.

Bad thing for me, I *understand* finance a bit more than avg "Joe". What I see is bankers stealing money and people voting parties that turn Al Capone like candidates into Secretary of Treasury, like Henry Paulson for example, turning them insanely rich out of thin air.

Banks buy high risk bonds, first they get the results of accepting high risk bets. Then they get bailed out because they are too-big-to-fail, they also get away legally tax-free with millions (because the CREATE jobs, that's shit they don't create nothing except for bubbles) and I get *raped* with an unemployment rate rising, money debasement and so forth. When I protest, what do I get? Police bullying me.

Truth is that at least 50% do not vote in the USA. Are these people accountable? For me everybody is.

So considering that we have a totally immoral Government. I firmly believe that is immoral to support it in any possible way, thus paying taxes. Taxes are the measure from which government derives power (money). If you cut the ability to a state to tax on people, it will collapse in time. Aritotle, Ghandi and Karl Marx (and many others) had all the same view: If you believe your government is illegal, avoid paying taxes.

Best Regards,

knives

It's a learned behavior. You live your whole life under the threat of punishment for breaking their "rules", and this is what you get.

OK I understand they are not taxed until I exchange for $ but I am not mining so I can not claim such expenses. Say I get rid of 1k coins over the course of a year, how can I prove what profit truly was without real evidence of the price coins were obtained for?

Speaking of which, check out this contest (http://voluntaryist.com/taxation/contest.html).

I also recommend making damn sure you owe anything before you let them take (or keep, if you've been W-9'd) your earnings.  For an in-depth discussion of how rare this is, even while following all the stupid laws they make up, check out Pete Hendrickson's site (http://www.losthorizons.com).

You said it. Since he govt does not recognize btc as currency, you only have to report, when you 1. translate the currency in to USD or you purchase Items in USD... or for example you use a BTC to USD purchasing converter like the amazon thingy somebody made up.

maybe i dont know shit about taxes, i dont even know what "you have your withholding setup wrong" means, it sounds like french to me. And as for being in the system, i got like 7k this year, idc what system im in im not passing that up.

His point was that you're paying the government more in taxes throughout the year than you actually owe them and then getting it back when you file your tax return. They're essentially getting an interest-free loan from you. You can fill out a W-4 form (http://www.irs.gov/pub/irs-pdf/fw4.pdf) to reduce your withholding and then give it to your employer. You should see over $500 more per month in your paychecks if you set it up right.

http://losthorizons.com/Newsletter/Picture056.jpg (http://losthorizons.com/Newsletter.htm)

maybe i dont know shit about taxes, i dont even know what "you have your withholding setup wrong" means, it sounds like french to me. And as for being in the system, i got like 7k this year, idc what system im in im not passing that up.
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could u help me do my taxes? seriously...

Ok, this for you guys who think you're getting "free money" from the government when you file your tax returns:

Give your employer a new W-4 to withhold $1000 from each paycheck. When you file your taxes next year you'll get like $52000 (or only $26000 if you're paid every two weeks) from the government! Who could pass up such an awesome deal?!

But seriously, if you're getting a lot back it just means you paid the government too much last year. I would rather have to owe the government a little bit than to get a lot of money back. You can obviously afford to put about $7000 ($583 per month) into a savings account or under your mattress in one year, so you could easily send in a couple hundred dollars at tax time if you didn't withhold quite enough during the year.

...Oh how naive to think the money from the income tax goes to any of the public goods.

Never forget, with enough careful brainwashing humans can be made to believe anything.

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Civil disobedience folks....

Where is the line for you?  When those drones they are deploying actually start killing people on US soil??? (Why else would they be deploying them if that reality isn't in the future?)

My line was crossed long ago, and I can't imagine any ethical, moral human with any kind of intellect choosing to support that system once they have become fully informed.

...Get fully informed, then have the courage to make the moral (and dangerous) choice.

At the end of the day you gotta look yourself in the mirror.  Are you proud of what's looking back?  Or did you cower because of convenience, comfort, or safety?