How to TAX Bitcoin. An easy way !

[JL421]

Yes you did miss many things if someone stores his bitcoin on an online wallet whenever they send any funds it will be sent from a different address and there is ways the wallet doesn't share information. Now when you send transactions you can use the bitcoin mixing sites which hides this from authorities. The only way is kyc asked in exchanges now for all the past purchases it will be hard to track

[1715481124]

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[Babyrica0226]

i don't know why people are so weird about taxes when it comes to bitcoin. i get that none of us are happy about paying taxes but why is it always different when it comes to bitcoin!
people pay taxes on literary anything you can think of with no complains but when it comes to paying taxes on owning bitcoin, using bitcoin, trading, etc they all start protesting vigorously!

In Bitcoin
If the Tax department makes it a rule by law, that you have to report every BTC address you own, or every wallet you own ...

it is the same as asking you to report all the properties you own!

Yes it is true that we pay taxes in each country, it is because we are under control of the government through their system of centralization where they can make a by laws about it, while in bitcoin is designed for decentralization that's why each government country can't do anything about it.

[megynacuna]

i don't know why people are so weird about taxes when it comes to bitcoin. i get that none of us are happy about paying taxes but why is it always different when it comes to bitcoin!
people pay taxes on literary anything you can think of with no complains but when it comes to paying taxes on owning bitcoin, using bitcoin, trading, etc they all start protesting vigorously!

In Bitcoin
If the Tax department makes it a rule by law, that you have to report every BTC address you own, or every wallet you own ...

it is the same as asking you to report all the properties you own!

Yes it is true that we pay taxes in each country, it is because we are under control of the government through their system of centralization where they can make a by laws about it, while in bitcoin is designed for decentralization that's why each government country can't do anything about it.

On the contrary I think th governments can censor and find details if every Bitcoin transaction and attempt to impose taxes on them because the allow ISPs and telecommunications in each respective country so if they decide to investigate every Bitcoin transaction that passed through their network through deep packet inspection (DPI) I think they can succeed in getting us to succumb and have their way.

[Aleister Crowley]

If bitcoins are related to taxes, I think I think this is a crazy thing, it would be unreasonable if a country would levy a fine or tax on us bitcoin users.
We all know, bitcoin can not be calculated as a tetep income that allows for the calculation of its taxes!

[Love!]

Yes it is true that we pay taxes in each country, it is because we are under control of the government through their system of centralization where they can make a by laws about it, while in bitcoin is designed for decentralization that's why each government country can't do anything about it.

But they would have to recognize it as a currency first, and in the U.S. they don't. But if they did, what you said holds true I think.

To be perfectly honest though, I would guess that 90% of people who have Bitcoins don't earn enough profit from them for the I.R.S. to care about. When was the last time you heard of a typical McDonald's (example) worker getting audited? They don't, and they don't because they don't make enough to put a blip on that radar.

[Silberman]

If your goal is to improve society and civilization.

Encouraging the state to cut taxes, spend more efficiently and streamline operations to cut spending are in your best interest.

People shouldn't support raising taxes at every opportunity unless they want to increase suffering, pain and agony in the world.

This is correct, people think that having a bigger government is the way to go, not realizing that a government does not create wealth they are only in charge of trying to distribute it, the problem is the most taxes you pay the fatter the government gets and that means that less money goes to the people that needs it and that only creates an incentive to try to charge even more taxes.

[Questat]

If your goal is to improve society and civilization.

Encouraging the state to cut taxes, spend more efficiently and streamline operations to cut spending are in your best interest.

People shouldn't support raising taxes at every opportunity unless they want to increase suffering, pain and agony in the world.

This is correct, people think that having a bigger government is the way to go, not realizing that a government does not create wealth they are only in charge of trying to distribute it, the problem is the most taxes you pay the fatter the government gets and that means that less money goes to the people that needs it and that only creates an incentive to try to charge even more taxes.

Tax is the lifeblood of the country therefore if we earn we have to pay taxes, now the question is if bitcoin can be tax?
Of course, if the government will create a law we will have to comply with it.

[Wesimon]

In my country, I have to fill a form every year for the tax department, including my year end bank statement and the salary bill.
Together with some major bills for insurance and healthcare, that's all they get.

So I can hide cash under the bed, or have an overseas account, or have some Gold bars, etc. The goverment has to thrust me quite a bit.
They can check some transfers, but if you like to hide it, you can do it.

So the actual way of getting the real numbers is quite bad.

In Bitcoin
If the Tax department makes it a rule by law, that you have to report every BTC address you own, or every wallet you own ...

All problems solved, because then the Department has also the addresses of the petrol station and the deli you spend money.
In no time the system knows which tax counts here and can claim the respective amount from both sides.

Sure it is still possible to hide Bitcoins, but then it is illegal.


...or did I miss something?

Taxing bitcoin is hard. One can evade tax without the notice of the Government. Simply just have multiple address. Evading tax in bitcoin is really easy, even though its illegal the government has nothing to do with it. Only dumb people can be caught. This is one of the main feature of bitcoin, no one can control over yout earnings  not even the government.

[youngagethinker]

In my country, I have to fill a form every year for the tax department, including my year end bank statement and the salary bill.
Together with some major bills for insurance and healthcare, that's all they get.

So I can hide cash under the bed, or have an overseas account, or have some Gold bars, etc. The goverment has to thrust me quite a bit.
They can check some transfers, but if you like to hide it, you can do it.

So the actual way of getting the real numbers is quite bad.

In Bitcoin
If the Tax department makes it a rule by law, that you have to report every BTC address you own, or every wallet you own ...

All problems solved, because then the Department has also the addresses of the petrol station and the deli you spend money.
In no time the system knows which tax counts here and can claim the respective amount from both sides.

Sure it is still possible to hide Bitcoins, but then it is illegal.


...or did I miss something?

In my country Philippines, we have a coins.ph where you can pay bills there like ( Water bills, load, electricity bills ), everything seems to be going smoothly but these later days, transactions fees are getting high maybe because the central bank in our country is open in regulating cryptocurrencies and they are putting a tax on it. I wonder what will happen in the next months, what I know is like the internet on our country, online wallets will become a hundred peso value with a peso worth of services. Sad.

[Theb]

I don't think reporting and monitoring your Bitcoin address will be a good way. What I mean about that is they don't have a way in which to differentiate what is Bitcoin received from a purchase or Bitcoin received from your friends or family or other non-business purposes. When you look at it this way you will only have more problem with the Taxing department rather than have a good solution at least in my perspective.

[Slark]

Taxing bitcoin is hard. One can evade tax without the notice of the Government. Simply just have multiple address. Evading tax in bitcoin is really easy, even though its illegal the government has nothing to do with it. Only dumb people can be caught. This is one of the main feature of bitcoin, no one can control over yout earnings  not even the government.

Gathering money from taxes is why the only choice for government is to simply legalise Bitcoin usage, include BTC in their legal tax framework.
To do that you don't necessarily want to catch individuals using BTC, but rather tax bitcoin using services instead.
It is always harder for businesses to avoid taxes that looking for random people using bitcoin as a test payment method.

[lovesybitz]

But that your government recognizes bitcoin as a currency? I doubt it. Your income in bitcoins according to the law is not revenue. If you buy goods with bitcoin it does not fall under the tax base. If you exchange them for your currency, then taxes will have to pay.

Absolutely, I agreed to what you just mentioned on this thread. Bitcoin can't have tax as long as it is decentralized.
We all knew that once the government are able to control bitcoins, it means bitcoin is no longer decentralize but instead it is centralize already.

[matuson]

But that your government recognizes bitcoin as a currency? I doubt it. Your income in bitcoins according to the law is not revenue. If you buy goods with bitcoin it does not fall under the tax base. If you exchange them for your currency, then taxes will have to pay.

Absolutely, I agreed to what you just mentioned on this thread. Bitcoin can't have tax as long as it is decentralized.
We all knew that once the government are able to control bitcoins, it means bitcoin is no longer decentralize but instead it is centralize already.

In order for the government to take taxes from bitcoin they need to admit it. There should be government bitcoin wallet. It seems to me that they will not do it. For them it is tantamount to defeat. Even the greed for money will not allow them to do it.

[jorneyflair]

In my country, I have to fill a form every year for the tax department, including my year end bank statement and the salary bill.
Together with some major bills for insurance and healthcare, that's all they get.

So I can hide cash under the bed, or have an overseas account, or have some Gold bars, etc. The goverment has to thrust me quite a bit.
They can check some transfers, but if you like to hide it, you can do it.

So the actual way of getting the real numbers is quite bad.

In Bitcoin
If the Tax department makes it a rule by law, that you have to report every BTC address you own, or every wallet you own ...

All problems solved, because then the Department has also the addresses of the petrol station and the deli you spend money.
In no time the system knows which tax counts here and can claim the respective amount from both sides.

Sure it is still possible to hide Bitcoins, but then it is illegal.


...or did I miss something?

Great idea!!!

...... yes you did miss something.

Unlike paypal and bank accounts(although one can own multiple as well they are way more difficult to create than bitcoin addresses), bitcoin addresses are incredibly easy to create. By running a script you can generate hundreds of bitcoin addresses if not more per second if your computer's fast enough.

Bitcoin is impractical for the government to tax. Your thinking only works IF a person is honest enough to only use that address for all his transactions. Now, most wallets will give you multiple addresses to use by default for better privacy. How can the government ever track you down and all your addresses? It's just impractical and expensive to do, it'll take more money to do this than the tax theey collect from ya.

[Theb]

In my country, I have to fill a form every year for the tax department, including my year end bank statement and the salary bill.
Together with some major bills for insurance and healthcare, that's all they get.

So I can hide cash under the bed, or have an overseas account, or have some Gold bars, etc. The goverment has to thrust me quite a bit.
They can check some transfers, but if you like to hide it, you can do it.

So the actual way of getting the real numbers is quite bad.

In Bitcoin
If the Tax department makes it a rule by law, that you have to report every BTC address you own, or every wallet you own ...

All problems solved, because then the Department has also the addresses of the petrol station and the deli you spend money.
In no time the system knows which tax counts here and can claim the respective amount from both sides.

Sure it is still possible to hide Bitcoins, but then it is illegal.


...or did I miss something?

Great idea!!!

...... yes you did miss something.

Unlike paypal and bank accounts(although one can own multiple as well they are way more difficult to create than bitcoin addresses), bitcoin addresses are incredibly easy to create. By running a script you can generate hundreds of bitcoin addresses if not more per second if your computer's fast enough.

Bitcoin is impractical for the government to tax. Your thinking only works IF a person is honest enough to only use that address for all his transactions. Now, most wallets will give you multiple addresses to use by default for better privacy. How can the government ever track you down and all your addresses? It's just impractical and expensive to do, it'll take more money to do this than the tax theey collect from ya.

Well even if you report all multiple Bitcoin addresses the government wouldn't easily determine what is taxable or not from the money received from that addresses. Because we all know that there is really no labels if Bitcoin was received as an earning or a remittance from a family or friend which is not considered as income. The problem here is that we can always find solutions for taxing Bitcoin but there will always be a loophole in it not unless the government has full control on a local Bitcoin Wallet provider that it.

[oegarod]

But that your government recognizes bitcoin as a currency? I doubt it. Your income in bitcoins according to the law is not revenue. If you buy goods with bitcoin it does not fall under the tax base. If you exchange them for your currency, then taxes will have to pay.

Absolutely, I agreed to what you just mentioned on this thread. Bitcoin can't have tax as long as it is decentralized.
We all knew that once the government are able to control bitcoins, it means bitcoin is no longer decentralize but instead it is centralize already.

In order for the government to take taxes from bitcoin they need to admit it. There should be government bitcoin wallet. It seems to me that they will not do it. For them it is tantamount to defeat. Even the greed for money will not allow them to do it.

As mentioned taxation can be made for every transaction. This is possible only when the government take necessary action on it. But corrupted government will always try to make money out of it. So they always create a solution with holes in it. This will be used by the common people. So taxation is possible only if the user himself realize and pay, else even the government can't do anything.

[Dudeperfect]

The last transaction I made from very first (and the one which I use to sign messages) was on 2017-02-27. That is exact 4 months ago, so does that mean I have not used bitcoins in those 4 months?. Probably I might have transacted over millions of dollars in bitcoin so the people who are tracing my primary bitcoin address will never find any information about my transactions. There is a very low number of people who will willfully disclose their bitcoin holdings and taxation would not work effectively in that way.

p.s - I haven't spent millions of dollars, I do not try to evade tax while dealing btc/fiat trades.

[Teraboy]

But that your government recognizes bitcoin as a currency? I doubt it. Your income in bitcoins according to the law is not revenue. If you buy goods with bitcoin it does not fall under the tax base. If you exchange them for your currency, then taxes will have to pay.

Absolutely, I agreed to what you just mentioned on this thread. Bitcoin can't have tax as long as it is decentralized.
We all knew that once the government are able to control bitcoins, it means bitcoin is no longer decentralize but instead it is centralize already.

In order for the government to take taxes from bitcoin they need to admit it. There should be government bitcoin wallet. It seems to me that they will not do it. For them it is tantamount to defeat. Even the greed for money will not allow them to do it.

As mentioned taxation can be made for every transaction. This is possible only when the government take necessary action on it. But corrupted government will always try to make money out of it. So they always create a solution with holes in it. This will be used by the common people. So taxation is possible only if the user himself realize and pay, else even the government can't do anything.

But you have know that the bitcoin is decentralized and encrypted data. that means every transaction of bitcoin gets encrypted by SHA 256 and it must be breakable by the goverment. The encrypted transaction has made the privacy is really high.

[Xavofat]

But that your government recognizes bitcoin as a currency? I doubt it. Your income in bitcoins according to the law is not revenue. If you buy goods with bitcoin it does not fall under the tax base. If you exchange them for your currency, then taxes will have to pay.

Absolutely, I agreed to what you just mentioned on this thread. Bitcoin can't have tax as long as it is decentralized.
We all knew that once the government are able to control bitcoins, it means bitcoin is no longer decentralize but instead it is centralize already.

In order for the government to take taxes from bitcoin they need to admit it. There should be government bitcoin wallet. It seems to me that they will not do it. For them it is tantamount to defeat. Even the greed for money will not allow them to do it.

Government Bitcoin wallet?  Are you actually insane?!  The whole point is to remove their power and give people sovereignty! It's shocking that Bitcoin isn't 100% centralised with people like you around...

[aesma]

I'm looking into living off Bitcoin legally, and so far I'm thinking the easiest way is to make a company. That way the company has clear accounts with spendings and earnings and can pay all the needed taxes. Then I'm just an employee of the company, with a salary in fiat.

Depending on where you live, you should be able to do this as a corporation, or under your personal income taxes.  Keeping track of the accounts clearly are necessary either way, with respect to income, and capital gains.

In my country there is a stupid limitation that if you earn more money from trading than from a regular job, you must declare those earnings differently than if you just make a few thousands, then you just need to add it to your income and get taxed at the marginal rate (up to 45%).

Since crypto earnings can vary wildly, this makes everything more complicated.