Paying myself in Bitcoins?

[MoonShadow]

I strongly suggest that those with tax questions consult a tax professional.  They make their money off of getting you out of paying taxes, and they get paid a chunk of what you save in taxes.

If you are conducting enough business in bitcoins that if it were dollars you'd go to jail for not paying taxes, go down to H&R block, or your local tax professional, and ask them.  They don't generally charge for a consultation.

Not H&R Block, they are just using a program like TurboTax.  Go to a CPA, or stay out of the whole mess.

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[Anonymous]

How do I even begin to separate personal bitcoins from business bitcoins?

Separate wallets?

Yeah thought about that.

there is also mybitcoin .

[Kluge]

Arise!

Caveat: I'm not an accountant, and changed my major before there was any chance anyone would confuse me for one.

1. How will this work for taxes?

http://www.irs.gov/businesses/small/article/0,,id=130524,00.html
You must immediately translate into dollars all items of income, expense, etc. (including taxes), that you receive, pay, or accrue in a foreign currency and that will affect computation of your income taxl

I keep hearing I need to declare USD value when the conversion happens. What kind of evidence would be sufficient in an audit? Do I just write the date down, GoxLast (which fluctuates $20/hour anymore), and tell them to look up historical price charts? What if Bitcoins are only worth $20 on miou302ponz.info's exchange, but $190 on MtGox? Which do I use? Would the IRS even trust data from Gox?

How do I prove the transaction? "Oh, txID is 19512a921ec4b501faf5b2f56a1cf41129cef65cf46d3fa79b1b2034797793f2, Mr. Has-Me-By-The-Balls -- you can look it up on blockchain.info if you don't believe me and don't keep a copy of the blockchain around."