Tax Returns & Bitcoin

[MJGrae]

So I hope I'm not the only one that finds it funny that my US Tax refund will be going almost 100% into Bitcoins for "savings".

This decision got me to thinking, how many other people were planning to do the same?

At that rate, if there are a lot of us, that would mean that there will be a rather large inflow of funds and a lot of liquidity over the next few months. Or there'll be next to nothing, so maybe this poll will help to shed some light on the subject.

Feel free to share your musings. This is just a general curiosity/amusement poll.

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[sunnankar]

Feel free to share your musings. This is just a general curiosity/amusement poll.

Or you could grab a copy of A Lawyer's Take On Bitcoin And Taxes and then get creative by making your deductions go into bitcoins.

[DobZombie]

remind me when US does their tax returns?

[MEGAMERICAN]

remind me when US does their tax returns?

You can do it anytime after the new year up until April 15th. I got my W2 back last week and will be doing my taxes soon.

[DannyHamilton]

remind me when US does their tax returns?

Businesses are required to send the W-2 form to employees by Jan. 31.  The tax filing deadline is April 15.  After an individual files their tax forms, they'll typically have to wait 3 to 6 weeks to receive their refund if they they have one coming, although there are many businesses that will provide a "refund anticipation" loan at a ridiculously high interest rate.  This would seem to indicate that "buying" of bitcoin with tax refund money will occur between now and a few weeks after April 15.

Many people will find that rather than overpaying their taxes last year and receiving a refund of the extra, they have under paid their taxes and will need to make a payment to cover the shortfall.  In general people in this situation will wait until April 15 to file their taxes and make their payment (might as well keep the free loan from the government as long as possible).  So I suppose if you believe that tax refunds will create a flood of buying bitcoin, that in the week or so before April 15 there could be a sudden flood of people selling bitcoin to come up with the money they need to pay their taxes.

[Rassah]

I'll be doing the opposite. Since tax returns are essentially a zero-interest loan to the government (it's YOUR money you're getting back), I typically have way too little taken out of my paycheck. I think I pay something like $30 in federal off every paycheck, when it should be closer to $250, and I use a part of that freed up money to buy bitcoins every paycheck.
So, instead of using my tax return to buy bitcoins, I'll be using the bitcoins I have been buying over the year to pay my tax bill (since I obviously still owe more in taxes). Except those bitcoins, which have been bought with money that otherwise would've went to taxes, are now worth 3 to 4 times more. Yay for being a financial analyst! 

[ralree]

I think you're all talking about "tax refunds."  "Tax returns" are the paper forms sent to the IRS.

[Akka]

So I hope I'm not the only one that finds it funny that my US Tax return will be going almost 100% into Bitcoins for "savings".

Well, I get my Tax refund almost at the same time here in Germany. Will be interesting to see the effect on the price in late March - April when everyone get their refunds.

Oh and about 50%, my car needs TÜV in that month and there will be certainly some repairs to be made.

[DannyHamilton]

I think you're all talking about "tax refunds."  "Tax returns" are the paper forms sent to the IRS.

I'm pretty sure I got it right.

. . . After an individual files their tax forms, they'll typically have to wait 3 to 6 weeks to receive their refund if they they have one coming, although there are many businesses that will provide a "refund anticipation" loan at a ridiculously high interest rate . . .