FreshJR (OP)
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March 29, 2013, 04:04:30 PM |
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Does anyone do their own taxes on here? Im asking because I don't have enough income, to get any return, so I can't justify using a tax accountant. I'm a student claimed as a dependent, with minimal income yielding $0 tax.
How would I report bitcoin mining income that was transferred into cash? Not bitcoin trading income (capital gains).
Is it possible to subtract hardware costs and monthly electricity costs, defining a net profit of 0. Is it possible to depreciate hardware costs as not to deduct all of the possible savings in 1 tax year.
And the current estimated value of BTC has nothing to do with anything until its converted to fiat right?
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Maria2.0
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March 29, 2013, 04:14:48 PM |
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Go to HR Block with your blockchain screenshots and tell them to file your taxes accordingly. If you mined 100 BTC last year prepare to give Uncle Sam around 13 BTC. May vary depending on your state.
Maria 2.0
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yogi
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Hamster ate my bitcoin
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March 29, 2013, 04:17:04 PM |
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What country are you in?
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FreshJR (OP)
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March 29, 2013, 04:17:37 PM Last edit: March 29, 2013, 05:07:49 PM by FreshJR |
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Go to HR Block with your blockchain screenshots and tell them to file your taxes accordingly. If you mined 100 BTC last year prepare to give Uncle Sam around 13 BTC. May vary depending on your state.
Maria 2.0
But for real, im assuming just go in with a list of Mtgox Withdrawals to cash, since what do they care how much BTC i have. --- Im in USA --- For this tax return, I can define the income as pure income, and still come out okay, since I have a $300 deduction left and and pay 10% on the rest. But the smarter way would be to setup depreciation if applicable, and subtract utility bills, since next year my expected income is going to be off the charts. And this years net income WAS 0. --- Would it be filing as a small business? Before you can determine if you are subject to self-employment tax and income tax, you must figure your net profit or net loss from your business. You do this by subtracting your business expenses from your business income. If your expenses are less than your income, the difference is net profit and becomes part of your income on page 1 of Form 1040. If your expenses are more than your income, the difference is a net loss.
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allthingsluxury
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March 29, 2013, 04:37:29 PM |
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Does anyone do their own taxes on here? Im asking because I don't have enough income, to get any return, so I can't justify using a tax accountant. I'm a student claimed as a dependent, with minimal income yielding $0 tax.
How would I report bitcoin mining income that was transferred into cash? Not bitcoin trading income (capital gains).
Is it possible to subtract hardware costs and monthly electricity costs, defining a net profit of 0. Is it possible to depreciate hardware costs as not to deduct all of the possible savings in 1 tax year.
And the current estimated value of BTC has nothing to do with anything until its converted to fiat right?
You would just claim their value based on the date you converted them to US funds. I have to pay my taxes on bitcoin sales, as my business is of course a registered business and you have to play the game. Look at BTC's the same as any other currency when filing taxes. Really there is no difference from that point of view.
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meebs
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March 29, 2013, 04:40:17 PM |
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Go to HR Block with your blockchain screenshots and tell them to file your taxes accordingly. If you mined 100 BTC last year prepare to give Uncle Sam around 13 BTC. May vary depending on your state.
Maria 2.0
But for real, im assuming just go in with a list of Mtgox Withdrawals to cash, since what do they care how much BTC i have. --- Im in USA --- For this tax return, I can define the income as pure income, and still come out okay, since I have a $300 deduction left and and pay 10% on the rest. But the smarter way would be to setup depreciation if applicable, and subtract utility bills, since next year my expected income is going to be off the charts. --- Would it be filing as a small business? Before you can determine if you are subject to self-employment tax and income tax, you must figure your net profit or net loss from your business. You do this by subtracting your business expenses from your business income. If your expenses are less than your income, the difference is net profit and becomes part of your income on page 1 of Form 1040. If your expenses are more than your income, the difference is a net loss. It is unlikely that they care how much BTC you have.. it is the cashing out part that they would care about.
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FreshJR (OP)
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March 29, 2013, 04:41:40 PM |
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You would just claim their value based on the date you converted them to US funds. I have to pay my taxes on bitcoin sales, as my business is of course a registered business and you have to play the game. Look at BTC's the same as any other currency when filing taxes. Really there is no difference from that point of view.
That makes sense for you since its sales from BTC, and which is pure income. In this situation, what about the expenses incurred to generated the BTC. I known I could consider it as 100% income, but that's just setting me up for a headache next tax season.
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christop
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March 29, 2013, 04:44:59 PM |
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https://bitcointalk.org/index.php?topic=156418.0What I understand from the above thread, and what most people are saying in this thread, is that you have to report only what you gain when you exchange BTC to USD. I think it would be reported as a capital gain.
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Tomatocage
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brb keeping up with the Kardashians
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March 29, 2013, 05:07:35 PM |
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I farmed about a half million gold in WoW last year. How much do I owe the IRS?
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FreshJR (OP)
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March 29, 2013, 05:09:53 PM |
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I farmed about a half million gold in WoW last year. How much do I owe the IRS?
Assuming you sold the gold on ebay, you made taxable income. Now about about the cost of electricity to run your computer, the cost of your computer, and your monthly subscription fee. Chances are, after that, your net income was 0. Which one do you report, and which form do you use? Hell, if I scored an ASIC right now. The income would defiantly raise a eye-brow or two.
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Nemesis
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March 29, 2013, 05:26:50 PM |
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Go to HR Block with your blockchain screenshots and tell them to file your taxes accordingly. If you mined 100 BTC last year prepare to give Uncle Sam around 13 BTC. May vary depending on your state.
Maria 2.0
Oh hi Maria, how have you been? Scamming life not working out for ya?
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Stephen Gornick
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March 29, 2013, 05:30:41 PM |
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I'm a student claimed as a dependent, with minimal income yielding $0 tax. At certain income ranges you don't even need to file a return. Though if you need to report capital gains I'm not sure if you can avoid it. The threshold is $400 for net self employment income. - http://www.smartmoney.com/taxes/income/in-some-cases-you-dont-need-to-file-a-tax-return-20713If you claim the mining income as revenue then you can deduct the electricity and amortize the hardware cost (instead of Section 179 expense since you wanted to depreciate over multiple years.) And the current estimated value of BTC has nothing to do with anything until its converted to fiat right? Either cashed out or spent or gifted even. Related: - http://en.bitcoin.it/wiki/Tax_compliance[Disclaimer, I am not an accountant.]
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FreshJR (OP)
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March 29, 2013, 05:46:22 PM |
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Thanks, Im in the clear this year.
Next year ill tell you the results when I sit down with my accountant.
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lettucebee
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March 29, 2013, 06:39:54 PM |
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First you should read the tax code and find the part that says you have to pay tax on bitcoin profits.
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Tranz
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May the force bit with you.
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March 29, 2013, 09:25:26 PM |
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I have seen many people say you only have to file them when you convert USD to BTC. What about buying goods or services. Gift Cards, Gold? Would these be taxable?
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aantonop
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Entrepreneur, coder, hacker, pundit, humanist.
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March 29, 2013, 09:40:31 PM |
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If you mine, then it is income.
If you invest, then it is capital gains.
My understanding is that I will file any GAINS only, as capital gains. Since I have not sold much of the bitcoin I bought, I have not yet realized any gains. Therefore, I only will declare and pay taxes on the difference in price on bitcoin that I bought and then sold at a profit.
Nothing to do with income.
If you're a business that sells in bitcoin, then you have sales, franchise, and corporate taxes, or self-employed taxes and pass-thru, depending on the business type.
Given how much incorrect info is floating around here, ask an accountant (I'm not one, I pay one to answer these questions)
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FreshJR (OP)
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March 30, 2013, 04:33:23 AM |
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First you should read the tax code and find the part that says you have to pay tax on bitcoin profits.
Exactaly, you mentioned bitcoin profit. Profit = Revenue - ExpenseBitcoin Related Capital Gains (Revenue) Sale of Bitcoin - $200 Bitcoin Related Capital Loses (Loss) Electricity $30/month = $360 Internet $50/month = $600 Computer Purchases that Year = $500 Bitcoin Related Net Profit (Loss) = (1260) <- thats negative
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PachucoBro
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April 09, 2013, 05:28:39 AM |
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Does anyone do their own taxes on here? Im asking because I don't have enough income, to get any return, so I can't justify using a tax accountant. I'm a student claimed as a dependent, with minimal income yielding $0 tax.
You do understand that a Tax refund is a REFUND of money you already paid out of your paycheck. If you file taxes and you get nothing back... YOU DID A GOOD JOB! You paid what you were supposed to and don't need to pay any more. If you get to the end of the year and you OWE taxes... the hope is you were able to use that money all year long to do something productive and pay it the following year in April and now you can say Uncle Sam let you borrow his money to buy BitCoins and make a 1000% profit with it. GREAT JOB!Also, your situation is that of a Sole Proprietorship. You have expenses and you have income... not Capital Gains. Capital Gains is for investment gains and is also taxed higher I believe.
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romerun
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Bitcoin is new, makes sense to hodl.
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April 09, 2013, 05:47:06 AM |
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buy bit coin, never sell it back to USD, use it, no need to file.
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Luckybit
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April 09, 2013, 09:49:00 PM |
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Does anyone do their own taxes on here? Im asking because I don't have enough income, to get any return, so I can't justify using a tax accountant. I'm a student claimed as a dependent, with minimal income yielding $0 tax.
How would I report bitcoin mining income that was transferred into cash? Not bitcoin trading income (capital gains).
Is it possible to subtract hardware costs and monthly electricity costs, defining a net profit of 0. Is it possible to depreciate hardware costs as not to deduct all of the possible savings in 1 tax year.
And the current estimated value of BTC has nothing to do with anything until its converted to fiat right?
You want a 1099 form and you fill out all income on that. You call yourself an independent contractor. I've made money before as an independent contractor and it's fairly simple. Get a 1099.
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