How are you guys paying for electricity and bills?

[gotminer]

So who is to say I didnt make 3k instead of 10k making my taxable income 600$? I know this isnt legal advice but just curious if this is really how it would work lol

Miners are basically self employed unless they create an LLC or Corporation.

Your taxable income is total revenue - expenses.

If you depreciate your mining equipment in a single year you can subtract that amount from your revenue also, if not you have to take a percentage every year.

Don’t depreciate in a single year unless...

Total Revenue >= Electricity Cost + Costs of Rigs + Misc Expenses

Otherwise you will give up on the tax savings as your taxable income cannot be less than zero.

Is it more beneficial to depreciate in a single year or to sell crypto at a time that you don't wish to sell it in order to pay your taxes?

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[Druiz287]

Guys, taxes are very tricky.  Please please please talk with a tax specialist.  But I’ll put it like this: anything conducive to mining is an expense if you’re paying for it.  (Rent, internet connection, electricity, etc)  Remember that your equipment will also be depreciating depending on its useful life and it’s salvage value.  You subtract all of that from your profits.

Let me give you a situation that just happened to me:

Been mining for the last two months.
Proceeds at prices when received $3,000+
Sale price when converted to USD $2,100
(Because prices are down comparatively)
So I listed $3000+ in revenues earned

Depreciating ran $476 a month
Loss on capital sale ran $900 (when converting to USD)
Electric ran $150 a month
Rent at my office space ran $550

So I had 3252 in EXPENSES on 3000 in REVENUE
Technically I’m at an OPERATING LOSS OF $252
So I don’t have to pay taxes on any of that
But my cash USD after paying rent and electric is $700
And I didn’t pay anything at all in taxes

Had prices went up, I’d actually PAY taxes but be a lot more profitable
Thankfully I don’t now have to pay taxes on that money

[Agozyen]

Do most of yall have day jobs and use your USD to pay for your bill or do you guys sell crypto to pay thus decreasing your potential from the profit? What are your guys strategies?

Im thinking Im just going to get a day job and be a slave to society for a little while.

My day job pays for my electrical costs, but then again I don't have but two mining rigs.  If I had more rigs I would use some of the profit to pay for my electricity.  If I ever have enough saved up I'd like to plant a solar farm though.

[whoismoses]

Nice this Is very helpful. Should i record how much I made in USD every month or keep the amount of coins that I made and convert to USD at a certain time frame. I believe it is the time that I actaully convert it right? What if i never cash out.

Technically you are supposed to recognize the revenue when the transaction is logged in the block chain. I don’t do that as it would be too hard. I recognize my revenue every month on the 28th. It doesn’t matter if you convert to fiat or not.

[Tidsdilatation]

I pay my electricity bill with taxed money i get from my day to day job. No way i would be selling crypto each month to pay the electricty bill. That would be a HUGE mistake in regards to profits. Either ive negotiate a contract making the payment once a year, or use normal fiat money. but keep track of the expenses you use for your hobby as they are normally subject to tax deduction 

[crocozino]

I pay all my bills with the money I'm earning from mining, this is very convenient for me
all that earned money comes to one bank account, from there I'm paying all the bills.
very easy and fast. before I had to go to atm machine and pay cash there which was really not so convenient )) especially if it is raining or snowing outside 

[bitcoinmasterlord]

I pay all my bills with the money I'm earning from mining, this is very convenient for me
all that earned money comes to one bank account, from there I'm paying all the bills.
very easy and fast. before I had to go to atm machine and pay cash there which was really not so convenient )) especially if it is raining or snowing outside 

That's good you are saving your salary.

how come you will handle your IT. because you earned money will directly come to your bank account then every transaction will be noted in your IT right so you don't have any issues from your IT department.

For me in my local exchange, they allowed us to pay bills directly through bitcoins. that means my bill amount will deduct in my BTC balance no need to convert it into fiat.

[chandrarahmadewa]

Well, if they succeed, you'll just have to wait a bit longer for free electricity...but meanwhile
you can still sell KWhs you get by holding MWATs  
They plan to go global

If the coin project is a success, in the roadmap of the country of Indonesia entered the year 2022.
I feel very sad, and if I have to wait for four more years, that's a long time ago. LOL

[lili song]

I'm stiil working now, so I paid electricity and bills with my salary. I do invest in crypto is for my future, so I will not sell my crypto to paid electricity and bills. Crypto better we setup for the future, because inside crypto have a investment and the profit more than gold. Salary we can paid for bills, saving money etc.

[edwardceng]

I pay my electricity bill with sell a coin. it's already planned, a half a profit to buy new hardware for build new RIG and the rest I keep in the form of coin.

[Trasamania]

I pay my electricity bill with sell a coin. it's already planned, a half a profit to buy new hardware for build new RIG and the rest I keep in the form of coin.

I just keep the coins and use the fiat to pay for the electricity. That is similar to buying coins.

[kriskarthik]

Do most of yall have day jobs and use your USD to pay for your bill or do you guys sell crypto to pay thus decreasing your potential from the profit? What are your guys strategies?

Im thinking Im just going to get a day job and be a slave to society for a little while.

I’m paying both electricity and real estate with fiat and saving all the crypto for good. No selling until I have significant amount of the crypto that I mind and until it goes to moon 

[Kronos21]

I pay for electricity on my own. In my country, the price of electricity is low. But we see that the cost of electricity will increase. Perhaps in the future we will see attempts by the state to limit the possibility of exchanging cryptocurrencies for Fiat to combat users of cryptocurrencies and increase the price of electricity to fight miners.

[Druiz287]

I pay my electricity bill with sell a coin. it's already planned, a half a profit to buy new hardware for build new RIG and the rest I keep in the form of coin.

I just keep the coins and use the fiat to pay for the electricity. That is similar to buying coins.

I respectfully disagree.  It is absolutely not the same, as far as I'm aware.  The electricity costs and other costs for my S9 means that I pay about $2,500 for 1BTC with mining, while it trades for $11,000.  So if I'm converting $2,500 to $11,000 (or on a smaller scale $250 in costs to $1,100) how is that the same as buying coin at $11,000?

[Spllouder]

Was anyone tried wind generated electricity to power mining rigs ? I know i live in a constant windy location most of the year, 5-20 Mph, with gust with as much as 40 mph during average storms. Wouldn't a high amperage dc motor spinning in the wind give you .5-1 Kwh ?

ie. cloth dryer motor

[BitcoinSupremo]

Here in Italy I do pay electricity bill from my mining rigs I own, we have a small farm of 20 rigs and 5 rigs each person, we are 4 friends. I take 100% from one mining rig and 20% from another to pay electricity bill which is high here 0.16 euro/kwatt . I think this does not damage my profit as the other 3 rigs plus the remaining 80% of the 4th one are making me about 1600 Euro/month but I like to make calculations with bitcoin as I save most of them because I have a daily job until now.

My advice even to a person having only one mining rig and let's take as an example the most common rig one with GPU-s RX 500 series, making about 400 USD month, and consuming 80 USD electricity, pay the electricity with this mining rig as this way you continue a normal life without having to spend money from your daily job to pay the mining electricity.

[nsummy]

Nice this Is very helpful. Should i record how much I made in USD every month or keep the amount of coins that I made and convert to USD at a certain time frame. I believe it is the time that I actaully convert it right? What if i never cash out.

Technically you are supposed to recognize the revenue when the transaction is logged in the block chain. I don’t do that as it would be too hard. I recognize my revenue every month on the 28th. It doesn’t matter if you convert to fiat or not.

You are doing it wrong then and could possibly end up paying taxes on something you took a loss on.  You are only taxed when you convert to fiat.  Just to illustrate my point, lets say last March I somehow solo mined a bitcoin block and received 12.5 bitcoins.  And this was when it was at $1250.  By your reasoning I take a capitol gains taxation for $15,625.  Now lets say I hold the bitcoin and decide to sell it all this month netting $137,500.  You think the IRS will let this slide since I paid tax on it last year?  No.    Its really no different than buying a stock.  You pay capital gains when you sell it, not when you receive it.

[Viecoin]

Do most of yall have day jobs and use your USD to pay for your bill or do you guys sell crypto to pay thus decreasing your potential from the profit? What are your guys strategies?

Im thinking Im just going to get a day job and be a slave to society for a little while.

If you live in an apartment and your lease is up soon, you can try looking into a complex that includes electricity based on the average of what all of the other units are using.

[Bambangs]

Do most of yall have day jobs and use your USD to pay for your bill or do you guys sell crypto to pay thus decreasing your potential from the profit? What are your guys strategies?

Im thinking Im just going to get a day job and be a slave to society for a little while.

I currently pay the bill with the result of being a worker, but I want to pay for it with a coin, but I can not.
I really hope someday be fulfilled

[gotminer]

I pay all my bills with the money I'm earning from mining, this is very convenient for me
all that earned money comes to one bank account, from there I'm paying all the bills.
very easy and fast. before I had to go to atm machine and pay cash there which was really not so convenient )) especially if it is raining or snowing outside 

First world problems.  How do you pay your electric bill with cash?  I don't even think my electric company takes cash anymore.  No idea where I would take the cash to them.