How to TAX Bitcoin. An easy way !

[Xavofat]

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

If you use an online wallet, it's 100% likely for it to be tracked, because the wallet can very easily keep logs.  With government regulation, it's inevitable that they would be forced to do so, and without government regulation they're 90% likely to scam you eventually.

Your anonymity is much better off not using an online wallet.

[Mometaskers]

IMHO, it must not be subjected to tax. The spread when buying it from exchanges and selling it for fiat should cover any fee the government wants. Look at it this way, it is still not a stable commodity. It would just be unfair to tax someone who just bought bitcoin and haven't even held it long enough when a crash came.

Sure the government might want more sources of money but they can't rely on bitcoin since it could just dry up in a matter of hours and not recover fast enough for weeks. The government should be content with whatever increase in purchasing power bitcoin grants citizens.

[Proton2233]

I think the government should not tax income from bitcoins. Much more profitable for the government refers to such income as investment in the economy. It will bring more benefit than the turnover of such amount of money in the shadows.

[avikz]

The same goes for every country, you need to show your bank transactions and all the major insurance bills and your salary slips to file for income tax. Why do you need to mention bitcoin transactions separately? I have been earning bitcoin since last two years and I believe, until and unless I am cashing out my bitcoins, there is no need to show it your income tax department.

I have cashed out my bitcoins few times during the last two years and I have shown a total amount under "Income from other source" every time. This amount is only the amount I have cashed out. The government levied tax on it appropriately and I believe I have done it in a legal way. Until I am cashing out my bitcoins, it is not really an income for me, right?

[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.

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.

Disagree paying taxes on your income is a relatively new invention, in the past most of the time you only paid taxes in the case of war or something big like that and for the most part you were left alone by the government, governments need to be kept small, have you wondered why wars got bigger and bigger, that is why because governments got bigger and bigger.

[pitham1]

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?

It would be easier for them to just ask you about your total bitcoin holdings. But they will have to do it for all alt coins as well.
Otherwise, people would just hold litecoins instead of bitcoins and avoid the taxman.

[jubalix]

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!

well no you can make a near unlimited number of addresses and send your "property" to those a addresses.  not so much with real/land property.

[Casdinyard]

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.

Precisely.
Can government spare bitcoin from tax? We're paying taxes on anything and everything they think that taxable. Why don't they let leave bitcoin alone and solve other issues of the country. The problem with our government is when they smell money they just can't sleep unless they get what they want from the people. Moreover, bitcoin can't be called as income because you're not employed to a company nor this is not a business. So there's no way bitcoin will be taxable.

[TastyChillySauce00]

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?

It would be easier for them to just ask you about your total bitcoin holdings. But they will have to do it for all alt coins as well.
Otherwise, people would just hold litecoins instead of bitcoins and avoid the taxman.

Don't you think that once government make a law to taxes bitcoin, this law will also cover any other cryptocurrencies? Maybe the government will just consider the amount of LTC you currently own equivalent to BTC just for taxing purpose,or any other way they could try.
Don't underestimate government if it's about the taxes, they'll just take as much as they can from you.

[KennyR]

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?

It would be easier for them to just ask you about your total bitcoin holdings. But they will have to do it for all alt coins as well.
Otherwise, people would just hold litecoins instead of bitcoins and avoid the taxman.

Don't you think that once government make a law to taxes bitcoin, this law will also cover any other cryptocurrencies? Maybe the government will just consider the amount of LTC you currently own equivalent to BTC just for taxing purpose,or any other way they could try.
Don't underestimate government if it's about the taxes, they'll just take as much as they can from you.

That's true, if government makes a plan then at least for certain time period they'll stick to it. When it comes to cryptocurrency we too have got the chance of making anonymous trading access. So how will they levy taxes if we're just holding in terms of bitcoin or some other altcoins without converting to fiat. In my view if government regulate serious law too, there will be loop holes to stay out of taxation.

[cryptoblazter]

Every country has tax collections to their fellow citizens, which means all people under by each nation are requires to give taxes and declare how much they earn annualy. But it bitcoin it can never be happen as long as it is decentralized.

[mrayazgul]

Every country has tax collections to their fellow citizens, which means all people under by each nation are requires to give taxes and declare how much they earn annualy. But it bitcoin it can never be happen as long as it is decentralized.

We have KYC at the exchanges, but there is still paxful and lbc and others and while it is a set of regs, it counts on people to fall in line and work in the system.
 

[jennywhzz]

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?

Sure, that is a legal way, but it is impossible to make secure.  That is like telling everyone in the city that has an illegal gun to come out and set them on the ground, most criminals are not intimidated by the legal demands

[Silberman]

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.

Precisely.
Can government spare bitcoin from tax? We're paying taxes on anything and everything they think that taxable. Why don't they let leave bitcoin alone and solve other issues of the country. The problem with our government is when they smell money they just can't sleep unless they get what they want from the people. Moreover, bitcoin can't be called as income because you're not employed to a company nor this is not a business. So there's no way bitcoin will be taxable.

They will try believe me, a government, any government thinks that you owe them money just because you are living withing their frontiers, that is why many people are leaving countries with heavy taxation since they don’t get what they want and yet they are charged ridiculous tax rates, bitcoin allow us to be out of reach of the confiscatory measures of the state and they do not like it one bit.

[romero121]

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.

Precisely.
Can government spare bitcoin from tax? We're paying taxes on anything and everything they think that taxable. Why don't they let leave bitcoin alone and solve other issues of the country. The problem with our government is when they smell money they just can't sleep unless they get what they want from the people. Moreover, bitcoin can't be called as income because you're not employed to a company nor this is not a business. So there's no way bitcoin will be taxable.

They will try believe me, a government, any government thinks that you owe them money just because you are living withing their frontiers, that is why many people are leaving countries with heavy taxation since they don’t get what they want and yet they are charged ridiculous tax rates, bitcoin allow us to be out of reach of the confiscatory measures of the state and they do not like it one bit.

This happens with many citizens from different countries hailing to other countries for a better living. There are Countries that get most of the people's earning in the name of tax and now with bitcoin we've got the key to stay away from these issues. Hope if government engage into developing a taxation system sure it'll succeed to certain extent.

[Silberman]

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.

Precisely.
Can government spare bitcoin from tax? We're paying taxes on anything and everything they think that taxable. Why don't they let leave bitcoin alone and solve other issues of the country. The problem with our government is when they smell money they just can't sleep unless they get what they want from the people. Moreover, bitcoin can't be called as income because you're not employed to a company nor this is not a business. So there's no way bitcoin will be taxable.

They will try believe me, a government, any government thinks that you owe them money just because you are living withing their frontiers, that is why many people are leaving countries with heavy taxation since they don’t get what they want and yet they are charged ridiculous tax rates, bitcoin allow us to be out of reach of the confiscatory measures of the state and they do not like it one bit.

This happens with many citizens from different countries hailing to other countries for a better living. There are Countries that get most of the people's earning in the name of tax and now with bitcoin we've got the key to stay away from these issues. Hope if government engage into developing a taxation system sure it'll succeed to certain extent.

Correct, this is happening in Europe where the taxes are awfully high and while the standard of living is ok, the costs associated with it are slowly making people reconsider if they want to keep paying those taxes or even to keep using the euro and be part of the European Union any longer, because while they are able to elect public officials most of the decision no longer come from their governments.

[colossus]

Thanks, Googlebit, was helpful.
Will it work in Korea (I'm planning to go in there in a few month), cause I plan to work in there for quite some time

[XbladeX]

The easiest way is to limit it to fiat conversion when you buy or sell something and you have to pay for services you will have Vat tax in most cases at least in EU.
Sending to bank is taxable event imo but this always wary about country where are you living.
I bet your IRS is scanning you bank acc and you wont get away with real estate purchase or stuff like that.


it is imposible to tax BTC in 100% maybe direct tax in mining reward ?? the easiest way.

[Love!]

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.

But we still pay a sales tax on the item. An item is bought, is recorded as being bought through the tax money it generates, yet is allowed to be bought by something that is not recognized as legal currency.

It's a loophole that shows that regulatory bodies care more about their money than ours.

[Pattart]

I think the government should not tax income from bitcoins. Much more profitable for the government refers to such income as investment in the economy. It will bring more benefit than the turnover of such amount of money in the shadows.

Be calm, after all the government will not be able to give tax to bitcoin users even the government does not know who the citizens of their country who use bitcoin so it can be taxed. This is because the bitcoin is anonymous. So bitcoins are not suitable to be taxed