Mining taxes

[Zeroxal]

I heard that the government is starting to take taxes from big miners.
At a company, if you invest/buy equipment you would buy it tax-free, however you will have to pay for the taxes of your income.
Do the big miners get their mining equipment tax-free? Because they still need to pay income taxes afterwards.
Or do they pay taxes for both?

[1715089546]

1715089546

[1715089546]

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[1715089546]

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[Betwrong]

I heard that the government is starting to take taxes from big miners.
At a company, if you invest/buy equipment you would buy it tax-free, however you will have to pay for the taxes of your income.
Do the big miners get their mining equipment tax-free? Because they still need to pay income taxes afterwards.
Or do they pay taxes for both?

It depends on where you live I think. In Europe as far as I know no miners pay taxes from mining, but they should pay VAT (which is pretty big in some cases, 20-25%) when buying things from abroad (including miners and all the equipment ).

[winspiral]

i mine ...600 to 1000 satoshi per day...will i be taxed? (lol)

[Zeroxal]

i mine ...600 to 1000 satoshi per day...will i be taxed? (lol)

The government will trace you down and put you into a high security jail in Norway if you don't pay 200 satoshi per day to the government.
After that all your satoshi will be seized and there will be a big court discussion about what to do with the huge amount of the seized currency.

[Raimonn]

Do you already pay a lot of taxes, when you buy the miner you pay import taxes, Vat taxes, when you are mining you pay taxes of the electricity. I don't think that more taxes are needed. And I think its difficult to see how many bitcoins have you mined. 

[notlist3d]

Well home miners have no worries but giant warehouse owners I think have to pay tax as income taxes but can also write off business expenses and losses which in such a tight area for ROI could come in handy.

I think I would agree normally it would be a "hobby" for most home miners. But if you reach a certain number I'm sure it goes into a taxable item (as far as US).

Best anwser is if you are doing a ton and feel you hit this taxable area.  Get a true CPA, not one of those things that pop up around tax time to help with easy returns. But a true CPA could give you a anwser on what it is in your area.  But they will charge you for their time.

[Rude Boy]

What if someone doing cloud mining? And from bit-x i got ~0.5+ GHs and i'm getting 400+ sat per day and paying 300+ sat for maintanence fee finally i'll get ~100 sat. So i'm the victim of paying tax?

[notlist3d]

What if someone doing cloud mining? And from bit-x i got ~0.5+ GHs and i'm getting 400+ sat per day and paying 300+ sat for maintanence fee finally i'll get ~100 sat. So i'm the victim of paying tax?

We really need a CPA.  But I think you need to be pulling quite the profit, most hobby miners don't make the profit's of a company.  But there are some quite large and chances are should look into it.

One thing I think should make a difference if you cash out the BTC and are making big profits.  If you cash it out you truly could get a profit.  But if you don't cash it in and it's held as BTC I think it really would be hard to pick a value.   But I'm also not a CPA..

[Questor]

So, technically a business would pay taxes on their equipment in two ways:
1) At the time of acquisition most states will require that their one time "use tax" is paid at a percentage based on the value of the miners if sales tax was not remitted.  This is often the same as the sales tax rate.
2) The value of the equipment would be taxed at the states "personal property tax" rate on an annual basis, based on declared value, accumulated depreciation, etc...

At current, any holdings in BTC would probably not be taxed unless they are declared on the asset sheet when doing accrual accounting, but as soon as that BTC is converted to USD on an exchange and USD is deposited into an account it would become taxable income to the state and the fed.

Tax implications around BTC will clearly abound in the near future.

[Amph]

about what number we are talking about? here for example you don't pay taxes for an income that is below 4800 per year

and anyway i'm sure that if you run a big business the simple thing of buying many miners mean that you invested a lot of money and you need to declare those money

[notlist3d]

about what number we are talking about? here for example you don't pay taxes for an income that is below 4800 per years

and anyway i'm sure that if you run a big business the simple thing of buying many miners mean that you invested a lot of money and you need to declare those money

Depends on what they consider the income or investment.  To be honest I would be interested to hear a CPA on it.  At one time I thought I wanted to be one of those...... but went a different path.   So I'm not going to throw out wrong info.

A business would definitely have some.  I think a lot will come down to if it's seen as a hobby or enough to be over a hobby.  A CPA could do a lot better though at classifying it and be able to tell exact numbers.

[EastKing]

about what number we are talking about? here for example you don't pay taxes for an income that is below 4800 per years

and anyway i'm sure that if you run a big business the simple thing of buying many miners mean that you invested a lot of money and you need to declare those money

If you run mining as a big business, you have to declare and many expenses are tax deductible. For most GPU miners, they are making a loss.

[notlist3d]

about what number we are talking about? here for example you don't pay taxes for an income that is below 4800 per years

and anyway i'm sure that if you run a big business the simple thing of buying many miners mean that you invested a lot of money and you need to declare those money

If you run mining as a big business, you have to declare and many expenses are tax deductible. For most GPU miners, they are making a loss.

There really should not be any GPU miners at a business level at this point.  I think any of the ones considered big enough to be a business are using asics.

GPU's just cost so much to buy and electricity use compared to what they bring in.  So they really are not a smart investment at this point.

[Tmdz]

Quoted from the IRS

Q-8: Does a taxpayer who “mines” virtual currency (for example, uses computer resources to validate Bitcoin transactions and maintain the public Bitcoin transaction ledger) realize gross income upon receipt of the virtual currency resulting from those activities?

A-8: Yes, when a taxpayer successfully “mines” virtual currency, the fair market value of the virtual currency as of the date of receipt is includible in gross income. See Publication 525, Taxable and Nontaxable Income, for more information on taxable income.

Q-9: Is an individual who “mines” virtual currency as a trade or business subject to self-employment tax on the income derived from those activities?

A-9: If a taxpayer’s “mining” of virtual currency constitutes a trade or business, and the “mining” activity is not undertaken by the taxpayer as an employee, the net earnings from self-employment (generally, gross income derived from carrying on a trade or business less allowable deductions) resulting from those activities constitute self-employment income and are subject to the self-employment tax. See Chapter 10 of Publication 334, Tax Guide for Small Business, for more information on self-employment tax and Publication 535, Business Expenses, for more information on determining whether expenses are from a business activity carried on to make a profit.

So they consider it self-employment and should be taxed as so, but the only way they will really know how much you mined will be by your transfers to a bank account from a exchange.  The IRS also see's btc as property so if you exchange a large enough amount it could be considered a capital asset and be taxed as such.  For the most part we should not worry unless you have a high volume to currency flowing into and out of bank accounts at which that bank will notify the IRS of your transactions.

[Amph]

about what number we are talking about? here for example you don't pay taxes for an income that is below 4800 per years

and anyway i'm sure that if you run a big business the simple thing of buying many miners mean that you invested a lot of money and you need to declare those money

If you run mining as a big business, you have to declare and many expenses are tax deductible. For most GPU miners, they are making a loss.

gpu miners are in loss regardless of taxes, but i don't know how much are taxes in the usa, if they are more than 20% on the revenue then miners could be a bit in trouble with the halving, if the price will remain the same

i think someone can hide his small farm if he don't use bitcoin, i mean they can't tax your bitcoin directly

[GigaBit]

I don't claim anything.
Not worth it... unless you're mining half a Bitcoin a day, don't worry about it.
They're not worried about lil pissants... if you do mine more than that in a day, you're looking at more issues than just taxes.
If you do, you likely have a business and a chartered accountant.

[jstew]

I don't claim anything.
Not worth it... unless you're mining half a Bitcoin a day, don't worry about it.
They're not worried about lil pissants... if you do mine more than that in a day, you're looking at more issues than just taxes.
If you do, you likely have a business and a chartered accountant.

it all depends on how ur farm is setup , im mining a good bit a day , but dont pay any taxes on it , i even get to write off the power bill for taxes

[notlist3d]

I don't claim anything.
Not worth it... unless you're mining half a Bitcoin a day, don't worry about it.
They're not worried about lil pissants... if you do mine more than that in a day, you're looking at more issues than just taxes.
If you do, you likely have a business and a chartered accountant.

it all depends on how ur farm is setup , im mining a good bit a day , but dont pay any taxes on it , i even get to write off the power bill for taxes

Can you explain more?  This seems far to good.   Writing off  the power bill on taxes but don't report earnings?   

I would hate to get a audit like that.....

[anamichii]

Do you already pay a lot of taxes, when you buy the miner you pay import taxes, Vat taxes, when you are mining you pay taxes of the electricity. I don't think that more taxes are needed. And I think its difficult to see how many bitcoins have you mined. 

right
we're already pay a lot of taxes. import taxes, sales taxes, vat, taxes of the electricity, taxes of the internet connection, etc.
add tax? no ROI.

[notlist3d]

Do you already pay a lot of taxes, when you buy the miner you pay import taxes, Vat taxes, when you are mining you pay taxes of the electricity. I don't think that more taxes are needed. And I think its difficult to see how many bitcoins have you mined. 

right
we're already pay a lot of taxes. import taxes, sales taxes, vat, taxes of the electricity, taxes of the internet connection, etc.
add tax? no ROI.

Depends on where you are at.   US for example really no import/vat tax.  So we are lucky there.

Yes in some countries those are huge fee's.  So I guess this depends on what country were talking about taxes.  I assumed US.  But guess on a global forum I should not assume.