(HELP) How do i pay Taxes on Bitcoin or any other Atlcoins

[LittleD]

Al learned the hard way, I simply want to learn from his mistakes   what do i claim to uncle Sammy?

Thanks

[Holliday]

what do i claim to uncle Sammy?

You claim everything. How hard can it be?

[russokai]

Just put all your money in a wheelbarrow and take it to the IRS and that's the only way they will be happy.

Then watch 95% of said money be funneled to the richest .01% and that's it.

[LittleD]

Just put all your money in a wheelbarrow and take it to the IRS and that's the only way they will be happy.

Then watch 95% of said money be funneled to the richest .01% and that's it.

i just know that one day the IRS will go after us (BTC Miners), why not just give them their cut now. intead of later down the road when BTC is much higher than now?

[AltorXP]

Just put all your money in a wheelbarrow and take it to the IRS and that's the only way they will be happy.

Then watch 95% of said money be funneled to the richest .01% and that's it.

i just know that one day the IRS will go after us (BTC Miners), why not just give them their cut now. intead of later down the road when BTC is much higher than now?

They'd actually go after the conversion of BTC to fiat, so you wouldnt lose money regardless of when you payed taxes

[Lucky Cris]

Just put all your money in a wheelbarrow and take it to the IRS and that's the only way they will be happy.

Then watch 95% of said money be funneled to the richest .01% and that's it.

i just know that one day the IRS will go after us (BTC Miners), why not just give them their cut now. intead of later down the road when BTC is much higher than now?

And 'they' know you're mining how? Disclaimer!!! Not real tax advice, but they don't know what they don't know, you know.

[BTCisthefuture]

Just put all your money in a wheelbarrow and take it to the IRS and that's the only way they will be happy.

Then watch 95% of said money be funneled to the richest .01% and that's it.

i just know that one day the IRS will go after us (BTC Miners), why not just give them their cut now. intead of later down the road when BTC is much higher than now?

It's important to stay on top of tax issues in America and play it as safe as possible. The IRS usually doesn't care when people use the excuse "oh I didn't know!"  and they can and will come after things from previous years if they notice it.

To answer your question,  right now there is no guidance from the IRS itself even after repeated requests from businesses and people asking the IRS for clear guidance.   Currently your best bet is to hire an accountant/tax specialist , shop around and try to find one who might have some knowledge of bitcoin.  This really is your best bet,  you can get advice from someone who's career is based on these sort of things and you can rest easy knowing you handled it the best of your abilities. Even if a accountant/tax specialist who doesn't know much about bitcoin, if they are decent at their job they can and will take the time to look into it and develop the best game plane possible and let you know whats required on your end.


edit: Let us know what you find out after talking to tax consultant , I'm sure you're not the only person out there who has the same concerns when it comes to filing taxes and wanting to make sure you handle it the best way possible to avoid potential headaches down the road

[AltorXP]

Just put all your money in a wheelbarrow and take it to the IRS and that's the only way they will be happy.

Then watch 95% of said money be funneled to the richest .01% and that's it.

i just know that one day the IRS will go after us (BTC Miners), why not just give them their cut now. intead of later down the road when BTC is much higher than now?

And 'they' know you're mining how? Disclaimer!!! Not real tax advice, but they don't know what they don't know, you know.

No, but they'd know if you exchange BTC to fiat  
So they'd easily be able to tax the money you got from selling those bitcoins. If the IRS did decide to tax everyone who converted bitcoin to fiat, I would assume that would be more costly than lucrative for the gov.

[BTCisthefuture]

Just put all your money in a wheelbarrow and take it to the IRS and that's the only way they will be happy.

Then watch 95% of said money be funneled to the richest .01% and that's it.

i just know that one day the IRS will go after us (BTC Miners), why not just give them their cut now. intead of later down the road when BTC is much higher than now?

And 'they' know you're mining how? Disclaimer!!! Not real tax advice, but they don't know what they don't know, you know.

No, but they'd know if you exchange BTC to fiat  
So they'd easily be able to tax the money you got from selling those bitcoins. If the IRS did decide to tax everyone who converted bitcoin to fiat, I would assume that would be more costly than lucrative for the gov.

Correct, the common assumption from what I've seen is that if you mine, make a profit , and cash out that profit you should treat it as capital gains. Again there are no officials rules on this from the IRS yet but this tends to be the safest thing to assume and the best approach to take from the few articles of read on this issue.   

It is true that unless you were making absurd amounts of money the IRS is very unlikely to ever noticed....but it's also true that when you take a gamble with the IRS and you lose it's a HUGE headache to deal with later.  I've known a few people who have been audited and it's a nightmare to but it mildly.

[Lucky Cris]

Just put all your money in a wheelbarrow and take it to the IRS and that's the only way they will be happy.

Then watch 95% of said money be funneled to the richest .01% and that's it.

i just know that one day the IRS will go after us (BTC Miners), why not just give them their cut now. intead of later down the road when BTC is much higher than now?

And 'they' know you're mining how? Disclaimer!!! Not real tax advice, but they don't know what they don't know, you know.

No, but they'd know if you exchange BTC to fiat  
So they'd easily be able to tax the money you got from selling those bitcoins. If the IRS did decide to tax everyone who converted bitcoin to fiat, I would assume that would be more costly than lucrative for the gov.

Indeed... But it also depends on your vehicle of exchange and volume. Should you take the cash road for example... Ok, I stop. I don't cheat Uncle Sam and I'm not telling anyone else to.

[BTCisthefuture]

I just found this link and it might help you.....  http://www.bitcointax.info/

If you don't know much about taxes then hiring a CPA  and showing them this document should give them enough of an understanding to make about as accurate as a decision about your situation and come up with an approach that will be very safe for you

[r3wt]

AltorXP, your points should be ignored as lunacy. of course the government will tax it. if you don' t pay they throw your ass in the can. its that simple. if i were you, i'd start a savings account and 10% of your earnings each month or week, put in this account. then at the end of the year, you take your bank statement to the tax lady and let her work her magic. write off your internet usage, any software you buy, shipping costs etc. make the system work for you, don't let the system make you work.

[Singlebyte]

No, but they'd know if you exchange BTC to fiat  
So they'd easily be able to tax the money you got from selling those bitcoins. If the IRS did decide to tax everyone who converted bitcoin to fiat, I would assume that would be more costly than lucrative for the gov.

Since your only taxed on the capital gains, how would they know what's a "gain", unless you tell them?

Or if you sell your services for Bitcoins how would they charge you income tax unless you tell them?

[Honeypot]

Your income, assuming you are going to turn bitcoin into fiat, is going to be calculated as a capital gains tax, which will include all the deductions, exemptions, and rates same as any other capital gain tax. That's about 25%, before you kick in investment and other exemptions.

Keep this in mind, unless you plan on doin some time at the big house.


IRS and other gov agencies regularly do audits and look-overs for many different people. If your fiat movement is greater than 10,000 USD a year, you will be on their sights.

If they find out somebody isn't reporting correctly, you are fucked. You ain't setting up that country any time soon, so don't be a bitch and try to get smart. Just try to maximize exemptions and deductions while also maximizing profits.

And no, you will probably pay more, both in life style and security as well as in money, by trying to get yourself out to a non-extrajudicial country.

[BTCisthefuture]

No, but they'd know if you exchange BTC to fiat  
So they'd easily be able to tax the money you got from selling those bitcoins. If the IRS did decide to tax everyone who converted bitcoin to fiat, I would assume that would be more costly than lucrative for the gov.

Since your only taxed on the capital gains, how would they know unless you tell them?

Or if you sell your services for Bitcoins how would they charge you income tax unless you tell them?

Many people use the advice of  "oh they wont find out"... it might work well for awhile (or even your whole life)  but that's a huge risk to take.  Unless your an expert at laundering money the IRS will notice and does have access to various ways you spend money that you might think they don't .  People can take whatever risk they want, and they can or even often do get away with it.  That's typically bad advice though, it's usually much better to just be honest as possible and let a tax man/lady handle it for you,  sure you might have some less money at the end of the day but you can also rest a lot easier knowing you're much safer.

[LittleD]

I just found this link and it might help you.....  http://www.bitcointax.info/

If you don't know much about taxes then hiring a CPA  and showing them this document should give them enough of an understanding to make about as accurate as a decision about your situation and come up with an approach that will be very safe for you

I just found this link and it might help you.....  http://www.bitcointax.info/

If you don't know much about taxes then hiring a CPA  and showing them this document should give them enough of an understanding to make about as accurate as a decision about your situation and come up with an approach that will be very safe for you

+1

http://www.bitcointax.info/

[AltorXP]

No, but they'd know if you exchange BTC to fiat  
So they'd easily be able to tax the money you got from selling those bitcoins. If the IRS did decide to tax everyone who converted bitcoin to fiat, I would assume that would be more costly than lucrative for the gov.

Since your only taxed on the capital gains, how would they know what's a "gain", unless you tell them?

Or if you sell your services for Bitcoins how would they charge you income tax unless you tell them?

Converting BTC to Fiat would be a gain imo
You'd have money in your bank account you didnt have before the conversion.
If they were left as bitcoins (not exchanged for fiat), then I guess they'd only tax once the bitcoins were converted to fiat (which unless you only have bitcoins as a hobby, will happen sometime). No one could really live off only bitcoins (having 100% of their earnings in BTC) until bitcoins become much more mainstream.

[Singlebyte]

No, but they'd know if you exchange BTC to fiat  
So they'd easily be able to tax the money you got from selling those bitcoins. If the IRS did decide to tax everyone who converted bitcoin to fiat, I would assume that would be more costly than lucrative for the gov.

Since your only taxed on the capital gains, how would they know unless you tell them?

Or if you sell your services for Bitcoins how would they charge you income tax unless you tell them?

Many people use the advice of  "oh they wont find out"... it might work well for awhile (or even your whole life)  but that's a huge risk to take.  Unless your an expert at laundering money the IRS will notice and does have access to various ways you spend money that you might think they don't .  People can take whatever risk they want, and they can or even often do get away with it.  That's typically bad advice though, it's usually much better to just be honest as possible and let a tax man/lady handle it for you,  sure you might have some less money at the end of the day but you can also rest a lot easier knowing you're much safer.

I'm not suggesting anyone hide anything from the IRS.  In fact I suggest everyone pay whatever the IRS comes up with.  My point is, just because you sell your bitcoins for fiat does not mean you are taxed on the entire amount.  You pay taxes on the portion that is gained.  If I traded $1,000 all year long in and out of bitcoin, I am only obligated to pay taxes on any amount over the initial $1,000 invested.  Who knows I may have had a loss after the year.  (Deduction?)  This also will all depend on how the IRS decides to classify Bitcoins.  And as far as I know, they have not made any statements.

[AltorXP]

No, but they'd know if you exchange BTC to fiat  
So they'd easily be able to tax the money you got from selling those bitcoins. If the IRS did decide to tax everyone who converted bitcoin to fiat, I would assume that would be more costly than lucrative for the gov.

Since your only taxed on the capital gains, how would they know unless you tell them?

Or if you sell your services for Bitcoins how would they charge you income tax unless you tell them?

Many people use the advice of  "oh they wont find out"... it might work well for awhile (or even your whole life)  but that's a huge risk to take.  Unless your an expert at laundering money the IRS will notice and does have access to various ways you spend money that you might think they don't .  People can take whatever risk they want, and they can or even often do get away with it.  That's typically bad advice though, it's usually much better to just be honest as possible and let a tax man/lady handle it for you,  sure you might have some less money at the end of the day but you can also rest a lot easier knowing you're much safer.

I'm not suggesting anyone hide anything from the IRS.  In fact I suggest everyone pay whatever the IRS comes up with.  My point is, just because you sell your bitcoins for fiat does not mean you are taxed on the entire amount.  You pay taxes on the portion that is gained.  If I traded $1,000 all year long in and out of bitcoin, I am only obligated to pay taxes on any amount over the initial $1,000 invested.  Who knows I may have had a loss after the year.  (Deduction?)  This also will all depend on how the IRS decides to classify Bitcoins.  And as far as I know, they have not made any statements.

True, the IRS can't expect us to follow tax rules regarding bitcoin that haven't even been made yet....

[BTCisthefuture]

No, but they'd know if you exchange BTC to fiat  
So they'd easily be able to tax the money you got from selling those bitcoins. If the IRS did decide to tax everyone who converted bitcoin to fiat, I would assume that would be more costly than lucrative for the gov.

Since your only taxed on the capital gains, how would they know unless you tell them?

Or if you sell your services for Bitcoins how would they charge you income tax unless you tell them?

Many people use the advice of  "oh they wont find out"... it might work well for awhile (or even your whole life)  but that's a huge risk to take.  Unless your an expert at laundering money the IRS will notice and does have access to various ways you spend money that you might think they don't .  People can take whatever risk they want, and they can or even often do get away with it.  That's typically bad advice though, it's usually much better to just be honest as possible and let a tax man/lady handle it for you,  sure you might have some less money at the end of the day but you can also rest a lot easier knowing you're much safer.

I'm not suggesting anyone hide anything from the IRS.  In fact I suggest everyone pay whatever the IRS comes up with.  My point is, just because you sell your bitcoins for fiat does not mean you are taxed on the entire amount.  You pay taxes on the portion that is gained.  If I traded $1,000 all year long in and out of bitcoin, I am only obligated to pay taxes on any amount over the initial $1,000 invested.  Who knows I may have had a loss after the year.  (Deduction?)  This also will all depend on how the IRS decides to classify Bitcoins.  And as far as I know, they have not made any statements.

True, the IRS can't expect us to follow tax rules regarding bitcoin that haven't even been made yet....

While that's true there have been cases throughout history of the IRS/Government introducing new laws and then arrested people retroactively. Wouldn't be the first time it's happened and wont be the last.

Bet yes overall unless you are making absurd amounts of money you probably don't need to worry about taxes from bitcoin.  With that said, it's always smart to have a tax lady on hand and let her give you the advice instead of trying to come up with your own advice if you aren't an expert on taxes.

Best advice to give people is to talk to a tax consultant and then make your own decision on how to move foward.