Topic: [2019-11-27] One Reason People Aren’t Paying With Bitcoin: Taxes (Read 394 times)
Where I'm at there's no capital gains tax and bitcoins aren't taxed at all, but don't spend because I treat my Bitcoins like that coin jar from the picture. My Bitcoin wallet is my piggy bank. To be honest if there was a capital gains tax in my country I'd keep my coins hidden and that would be extremely easy because I bought them on defunct exchanges with no KYC somewhere in 2014 and 15. If I wanted to sell at some point I'd move to a tax haven. This means that I don't spend because I don't want to, not because of taxes.
December 07, 2019, 06:24:09 AM
Buy a car and a helicopter:
https://delouvois.com/browse/all_categories/1995-eurocopter-as350b2/
A bit of gold and platinum:
https://www.jmbullion.com/
House by the ocean or own island:
https://bitcoin-realestate.com/property/3123-2/
https://bitcoin-realestate.com/property/160-acre-tropical-island/
Buy a good yacht:
https://cryptobankandtrust.co.uk/index.php/yachts-for-sale/
Now pay taxes:
https://refundo.com/
https://delouvois.com/browse/all_categories/1995-eurocopter-as350b2/
A bit of gold and platinum:
https://www.jmbullion.com/
House by the ocean or own island:
https://bitcoin-realestate.com/property/3123-2/
https://bitcoin-realestate.com/property/160-acre-tropical-island/
Buy a good yacht:
https://cryptobankandtrust.co.uk/index.php/yachts-for-sale/
Now pay taxes:
https://refundo.com/
December 03, 2019, 12:04:12 PM
Most Bitcoin enthusiasts restock their satoshi stack after having spent some. I do that too. Works well.
T.H.I.S.
If you really want Bitcoin to succeed, do exactly what 1Referee is saying: spend BTC on your regular weekly stuff, then spend your fiat buying back the BTC you spent. Currencies change hands. Money circulates.
December 03, 2019, 08:36:00 AM
the second reason is that people do not want to spend bitcoin expecting it to x100-1000
and the thought process is like this - I spend 0.01 which is 75$ now , but in ten years ,maybe this will be 750$
and the thought process is like this - I spend 0.01 which is 75$ now , but in ten years ,maybe this will be 750$
The funny thing however is that the people expecting it to x100-x1000 lose everything anyway because of poor investment decisions. People are so greedy that they do not only want to see the price go up a lot, but also see their satoshi stack go up a lot, and they hope to do that by investing in all sorts of shitcoins.
By spending you at least have the item that you purchased. Most of the get rich quick noobs have nothing left but bad memories because most shitcoins lost ~90% of their value.
Most Bitcoin enthusiasts restock their satoshi stack after having spent some. I do that too. Works well.
December 03, 2019, 03:50:07 AM
the second reason is that people do not want to spend bitcoin expecting it to x100-1000
and the thought process is like this - I spend 0.01 which is 75$ now , but in ten years ,maybe this will be 750$
and the thought process is like this - I spend 0.01 which is 75$ now , but in ten years ,maybe this will be 750$
I don't buy this oft-repeated explanation. Who knows where the price and Bitcoin will be within a year, let alone ten years? Maybe if the price has dipped recently and someone's making a bigger purchase, otherwise 0.01 BTC is too little to worry about losing on a potential "10-1000" increase decade down the line. And I know Bitcoin has already increased 10000 between 2011 and 2017, but even now anything more than a 10x increase looks kind of ridiculous. It's not going to be increasing like it already did forever.
well , I often catch myself doing this and I'm sure others do as well
it is human psychology , there is no escaping it and bitcoin is too volatile to be spending it without thinking
we don't know where the price will be come next year , it is true but we secretly HOPE that our decisions ( to buy in this case) are correct and are reluctant to spend bitcoins
one more thing I forgot to mention , the tiny purchases like a cup of coffee I've mentioned -
add your transaction fees and the price goes up , while it is pretty negligible on the purchases > 10$ , but paying 2-3 bucks and then get "taxed" for 0.25$ by a tx fee , not too exciting
December 02, 2019, 08:41:23 PM
It's definitely the case for me and I'm sure it's the same for others who've been around.
I'm well aware of the piece of tat I'm buying now coming back to haunt me at a much higher price. I only buy stuff with BTC that I know will enrich my life for the foreseeable future no matter what the price will do.
I've got piece of shit laptop sleeves that broke the moment I tried to zip them up that now cost the equivalent of £250. Not doing that again. Even buying and replacing would still sting.
It's these nincompoops who wrote in 2015 about spending everything they had on their Steam library who must wander the streets punching themselves in the head and muttering to themselves. I warned 'em at the time.
I'm well aware of the piece of tat I'm buying now coming back to haunt me at a much higher price. I only buy stuff with BTC that I know will enrich my life for the foreseeable future no matter what the price will do.
I've got piece of shit laptop sleeves that broke the moment I tried to zip them up that now cost the equivalent of £250. Not doing that again. Even buying and replacing would still sting.
It's these nincompoops who wrote in 2015 about spending everything they had on their Steam library who must wander the streets punching themselves in the head and muttering to themselves. I warned 'em at the time.
Then don't spend everything
Stupid PCIe risers I bought back in 2011 would be worth more than my home if I could exchange them back to Bitcoin but I'm not going to complain - at the time it was a good investment.
December 02, 2019, 08:09:22 PM
I don't buy this oft-repeated explanation.
It's definitely the case for me and I'm sure it's the same for others who've been around.
I'm well aware of the piece of tat I'm buying now coming back to haunt me at a much higher price. I only buy stuff with BTC that I know will enrich my life for the foreseeable future no matter what the price will do.
I've got piece of shit laptop sleeves that broke the moment I tried to zip them up that now cost the equivalent of £250. Not doing that again. Even buying and replacing would still sting.
It's these nincompoops who wrote in 2015 about spending everything they had on their Steam library who must wander the streets punching themselves in the head and muttering to themselves. I warned 'em at the time.
December 02, 2019, 07:20:12 PM
the second reason is that people do not want to spend bitcoin expecting it to x100-1000
and the thought process is like this - I spend 0.01 which is 75$ now , but in ten years ,maybe this will be 750$
and the thought process is like this - I spend 0.01 which is 75$ now , but in ten years ,maybe this will be 750$
I don't buy this oft-repeated explanation. Who knows where the price and Bitcoin will be within a year, let alone ten years? Maybe if the price has dipped recently and someone's making a bigger purchase, otherwise 0.01 BTC is too little to worry about losing on a potential "10-1000" increase decade down the line. And I know Bitcoin has already increased 10000 between 2011 and 2017, but even now anything more than a 10x increase looks kind of ridiculous. It's not going to be increasing like it already did forever.
December 02, 2019, 02:32:40 PM
if you do everything by the book, it's a nightmare. but what percentage of crypto investors do you think actually report gains after every purchase? probably a low single digit percentage. after all, there is zero tax reporting on the merchant side or KYC when buying goods/services.
Dunno. But I wouldn't want to be planting future pain for myself. Maybe one day they'll get super hot software that effortlessly tracks every purchase ever made and go to town. The merchant addresses will be known and many of the personal addresses will be linked to IDs as well.
And congrats on your legendariness. It's exceedingly well deserved.
December 02, 2019, 02:25:55 PM
taxes would be the last reason to not be paying with bitcoins , the primary reason is the lack of businesses that would accept them first place
I spend rather more than I should. If that spending was taxable in the way it seems in the US I would likely stop doing it. Sounds like a right grind.if you do everything by the book, it's a nightmare. but what percentage of crypto investors do you think actually report gains after every purchase? probably a low single digit percentage. after all, there is zero tax reporting on the merchant side or KYC when buying goods/services.
i'm hoping one of these bills gets passed which exempts a certain amount of gains realized by spending. that'll give us a bit of additional cover......
December 01, 2019, 08:59:16 PM
taxes would be the last reason to not be paying with bitcoins , the primary reason is the lack of businesses that would accept them first place
I spend rather more than I should. If that spending was taxable in the way it seems in the US I would likely stop doing it. Sounds like a right grind.
December 01, 2019, 01:47:54 PM
taxes would be the last reason to not be paying with bitcoins , the primary reason is the lack of businesses that would accept them first place
I would love to be paying with coins for my coffee , for example but alas , there are literally zero places that accept bitcoins where I live and only 2 bitcoin ATM
with atrociously high rates and when I tried to buy coins there it didn't even work
the second reason is that people do not want to spend bitcoin expecting it to x100-1000
and the thought process is like this - I spend 0.01 which is 75$ now , but in ten years ,maybe this will be 750$
the businesses that may want to accept bitcoins have to check the legal status first , in many countries crypto is in the grey area
for many it is not worth the trouble and bitcoin remains excluded from our day to day activities like shopping , Friday night parties
etc.
I would love to be paying with coins for my coffee , for example but alas , there are literally zero places that accept bitcoins where I live and only 2 bitcoin ATM
with atrociously high rates and when I tried to buy coins there it didn't even work
the second reason is that people do not want to spend bitcoin expecting it to x100-1000
and the thought process is like this - I spend 0.01 which is 75$ now , but in ten years ,maybe this will be 750$
the businesses that may want to accept bitcoins have to check the legal status first , in many countries crypto is in the grey area
for many it is not worth the trouble and bitcoin remains excluded from our day to day activities like shopping , Friday night parties
etc. December 01, 2019, 06:59:30 AM
A lot of them like the convenience of using Payment processors, because they avoid the legal issues. (When they work with Payment processors, all bitcoins gets converted back to Fiat) 
From a business perspective, that's all you need. I do not blame businesses for accepting Bitcoin through a payment gateway because they are just looking for that extra exposure and potentially extra revenue. You can claim to accept Bitcoin without even accepting it directly, that's some powerful free exposure right there. Even Peter Schiff does that.
I'm pretty sure that we will reach a point in the future where merchants want to hold on to their coins, but it will need to be less volatile, and have more global acceptance so that they can use their coins to restock inventories similar to how they do it with fiat today.
Lightning will play a role there too because of instant transaction settlement, which reduces the exposure to Bitcoin's volatile nature even further because you don't have to wait 10-60 minutes depending on how many confirmations the other party demands. Interesting times we have ahead of us.
November 30, 2019, 08:48:16 AM
One of the main reasons why companies are not accepting Bitcoin as a payment option is the accounting and auditing of their books.
not for brand new businesses
You're talking about established businesses, who are more conservative as they have something to lose. People just starting out with fresher ideas are already risking everything on the venture e.g. openbazaar is gradually filling up it's search listings with exactly that kind of business
November 30, 2019, 06:50:02 AM
One of the main reasons why companies are not accepting Bitcoin as a payment option is the accounting and auditing of their books. Most auditors
do not know about Bitcoin, because they did not get that as part of their education and what they were taught are totally against what Bitcoin is.
When we want to introduce Bitcoin to merchants, they have many questions about the legality and also how it would be integrated into their
Point of sale systems. So there are definitely a lot of uncertainty and complexity that has to be addressed before merchants would be willing to
accept Bitcoin directly. A lot of them like the convenience of using Payment processors, because they avoid the legal issues. (When they work
with Payment processors, all bitcoins gets converted back to Fiat)
do not know about Bitcoin, because they did not get that as part of their education and what they were taught are totally against what Bitcoin is.
When we want to introduce Bitcoin to merchants, they have many questions about the legality and also how it would be integrated into their
Point of sale systems. So there are definitely a lot of uncertainty and complexity that has to be addressed before merchants would be willing to
accept Bitcoin directly. A lot of them like the convenience of using Payment processors, because they avoid the legal issues. (When they work
with Payment processors, all bitcoins gets converted back to Fiat)
November 29, 2019, 06:21:44 AM
So, I don't blame anyone for spending their bitcoins to avoid taxes. Especially in the US, where most of our taxes are paying for really horrible wars and military expenditures from decades past anyway. The notion that our tax dollars are mostly funding vital services is a fallacy. It's highway robbery, that's all.
It's rare to see anyone from the US publicly acknowledge where taxpayer money goes, but what you say is one big truth. The mere thought that tax money goes to financing wars thousands of miles away from your country where mostly innocent people die is enough to make you want not to pay that tax. The USA may be called the largest democracy in the world, but I would never want to live in one like that.
There are also countries with zero VAT on certain things, especially food is in some from 10% to 0 %, not that I see too many people paying for groceries with bitcoin anyway. The system is stupid anyhow, full vat on dental care, reduced vat for hairdressing and therapeutical massage saloons.
These are countries where governments somewhat care for their residents, so they reduce VAT on certain products. I have the same situation in my county, but even though VAT is reduced, prices remained the same - which is, of course, the result of the greed of merchants who saw an extra opportunity to make money.
The system is bad for people, but it is very good for people in power - if we think about it, nothing's changed since the Middle Ages, taxes are still being collected and sticks and swords have been replaced by tax officials and enforcement laws.
November 28, 2019, 09:30:51 PM
I think one reason I don't see anyone mentioning is simple obliviousness. On /r/Bitcoin once in a while I'll see a relatively highly upvoted post about someplace accepting Bitcoin that I've known about for a long time and I can see a lot of users commenting that they didn't know said place accepts Bitcoin.
November 28, 2019, 05:32:13 PM
Satisfied people pay taxes much easier than those who do not benefit too much from their governments/states.
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It is also a misconception that when paying with BTC person is avoid tax, maybe in some countries this can be the case, but we have VAT (value-added tax) in EU from 17% to 27% (Hungary) so every time you pay/buy something you pay tax. I buy some things from time to time with BTC, and I think VAT is quite a sufficient contribution to the state on my part.
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It is also a misconception that when paying with BTC person is avoid tax, maybe in some countries this can be the case, but we have VAT (value-added tax) in EU from 17% to 27% (Hungary) so every time you pay/buy something you pay tax. I buy some things from time to time with BTC, and I think VAT is quite a sufficient contribution to the state on my part.
There are also countries with zero VAT on certain things, especially food is in some from 10% to 0 %, not that I see too many people paying for groceries with bitcoin anyway. The system is stupid anyhow, full vat on dental care, reduced vat for hairdressing and therapeutical massage saloons.
As for the first part, I would say is half true.
I did pay tax on the profit I made from bitcoins this year, (of course, not quite all..half...around that
) but right now even if I wanted to pay also again the income tax on things I purchased I would probably quit not because of the financial reason but the whole stupidity of the system where I would have to keep track of price, gains, every purchase, no way in hell I'm doing this, I'm better of with a fine!Not a fan of the US system, not a fan of ours either.
November 28, 2019, 05:18:48 PM
Really, the whole thing's a total labyrinth, this thread is no doubt barely scraping the surface. It's highly likely that there are multiple taxes that even tax professionals are not paying through misinterpretation or being otherwise unaware; like the statute books overall, the tax code is so vast and complex that only skilled and diligent people can find either the loopholes or the gotchas that their contemporaries do not. Which makes it a great tool for political persecution; when everyone is breaking the law (unaware or not), you can make an example of anyone if you're powerful and a particular person or group is pissing you off.
November 28, 2019, 04:12:33 PM
no. there have been some bills introduced to congress like the token taxonomy act, which would exempt a total of $600 of capital gains per year from taxes if realized by spending on goods/services. (the per transaction amount wouldn't matter)
Thanks for the confirmation. That's bonkers. That makes a vast amount more work for the population, the services they use and the tax people. I wonder whether the piddling amounts they take actually pay for the extra bureaucracy.
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