How are you guys paying for electricity and bills? - page 2.

whoismoses

member

Activity: 247

Merit: 59

Quote from: BaNgTHai on March 02, 2018, 04:39:15 PM

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.

Agozyen

sr. member

Activity: 672

Merit: 252

Until the end

Quote from: BaNgTHai on March 02, 2018, 03:43:53 PM

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.

Druiz287

jr. member

Activity: 56

Merit: 8

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

gotminer

member

Activity: 644

Merit: 24

Quote from: whoismoses on March 02, 2018, 04:30:00 PM

Quote from: BaNgTHai on March 02, 2018, 04:15:26 PM

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?

Pekine

newbie

Activity: 112

Merit: 0

with money off course

Branko

sr. member

Activity: 2632

Merit: 328

Quote from: BaNgTHai on March 02, 2018, 04:44:30 PM

Quote from: Branko on March 02, 2018, 04:42:32 PM

Seriously, buy some MWAT, specially if you're from Balkan area, and get your free energy

And don't forget to thank me with merit for info Cheesy

https://www.kucoin.com/#/trade.pro/MWAT-BTC

I have no idea what that is. And immmm ffffaaaaaaaarrrrrr from Balkan area lol

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 Cheesy

They plan to go global

BaNgTHai

full member

Activity: 166

Merit: 100

Quote from: Branko on March 02, 2018, 04:42:32 PM

Seriously, buy some MWAT, specially if you're from Balkan area, and get your free energy

And don't forget to thank me with merit for info Cheesy

https://www.kucoin.com/#/trade.pro/MWAT-BTC

I have no idea what that is. And immmm ffffaaaaaaaarrrrrr from Balkan area lol

Branko

sr. member

Activity: 2632

Merit: 328

Seriously, buy some MWAT, specially if you're from Balkan area, and get your free energy

And don't forget to thank me with merit for info Cheesy

https://www.kucoin.com/#/trade.pro/MWAT-BTC

BaNgTHai

full member

Activity: 166

Merit: 100

Quote from: whoismoses on March 02, 2018, 04:30:00 PM

Quote from: BaNgTHai on March 02, 2018, 04:15:26 PM

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.

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.

whoismoses

member

Activity: 247

Merit: 59

Quote from: BaNgTHai on March 02, 2018, 04:15:26 PM

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.

BaNgTHai

full member

Activity: 166

Merit: 100

Quote from: NameTaken on March 02, 2018, 04:23:34 PM

Quote from: BaNgTHai on March 02, 2018, 04:15:38 PM

Quote from: NameTaken on March 02, 2018, 04:10:17 PM

Bought 30TH/s on Hashflare last year before they increased the price to cover the electricity bill.

for what algo?
Im guessing SHA256

Scrypt and Ethash is measured in MH/s and Equihash in Sol/s.

So my educated guess was correct

NameTaken

hero member

Activity: 630

Merit: 502

Quote from: BaNgTHai on March 02, 2018, 04:15:38 PM

Quote from: NameTaken on March 02, 2018, 04:10:17 PM

Bought 30TH/s on Hashflare last year before they increased the price to cover the electricity bill.

for what algo?
Im guessing SHA256

Scrypt and Ethash is measured in MH/s and Equihash in Sol/s.

BaNgTHai

full member

Activity: 166

Merit: 100

Quote from: NameTaken on March 02, 2018, 04:10:17 PM

Bought 30TH/s on Hashflare last year before they increased the price to cover the electricity bill.

for what algo?
Im guessing SHA256

BaNgTHai

full member

Activity: 166

Merit: 100

Quote from: whoismoses on March 02, 2018, 04:08:49 PM

I pay my additional part of my bill per month out of my pocket, or as some would say my real job.

Feel free to sell your crypto to pay your bill. Let me fix the math from above...

You have a $200 electric bill (all from mining).

You sell $200 worth of crypto to pay your $200 bill.

So let’s make it easy, you do this every month for a total of $2400.

Your total income (before expenses) is $10,000.

You pay taxes on $10,000 - $2,400, which is $7,600.

You basically pay zero taxes on the crypto you sold to pay for electricity..

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

NameTaken

hero member

Activity: 630

Merit: 502

Bought 30TH/s on Hashflare last year before they increased the price to cover the electricity bill.

whoismoses

member

Activity: 247

Merit: 59

I pay my additional part of my bill per month out of my pocket, or as some would say my real job.

Feel free to sell your crypto to pay your bill. Let me fix the math from above...

You have a $200 electric bill (all from mining).

You sell $200 worth of crypto to pay your $200 bill.

So let’s make it easy, you do this every month for a total of $2400.

Your total income (before expenses) is $10,000.

You pay taxes on $10,000 - $2,400, which is $7,600.

You basically pay zero taxes on the crypto you sold to pay for electricity..

BaNgTHai

full member

Activity: 166

Merit: 100

Quote from: flip4flop on March 02, 2018, 03:57:23 PM

Usually, I will just cash out enough to cover electric for the month. Takes about a week of mining then the rest of the month I stash coins. The last few months I haven't been selling any and just pay out of extra money for the month I make since my wife doesn't really mind and sees the long-term value of holding.

Do you have a strategy on when to sell for bills? Or is what you are doing now, not taking out any crypto for the time being, part of your strategy that you had set in place when times like now come around (less profitable).

BaNgTHai

full member

Activity: 166

Merit: 100

Quote from: gotminer on March 02, 2018, 03:55:04 PM

Quote from: fanatic26 on March 02, 2018, 03:47:02 PM

The best way to mine is to not convert your crypto at all and just use fiat from your job to pay for it. Remember in the US you are paying capital gains on your conversions so every time you pay a bill with converted crypto you need to set aside what equates to about 40% of what you converted for taxes.

Convert ETH to $200 USD

Pay a $200 electric bill.

You owe ~$80 in taxes from that transaction.

But the bill itself is a tax deduction, right? I just pay my electrical costs out of my own pocket. Saves me the hassle of possibly losing potential gains.

Isnt it a tax reduction only if you have a registered mining operation as a business?

flip4flop

full member

Activity: 378

Merit: 135

Usually, I will just cash out enough to cover electric for the month. Takes about a week of mining then the rest of the month I stash coins. The last few months I haven't been selling any and just pay out of extra money for the month I make since my wife doesn't really mind and sees the long-term value of holding.

BaNgTHai

full member

Activity: 166

Merit: 100

Quote from: fanatic26 on March 02, 2018, 03:47:02 PM

The best way to mine is to not convert your crypto at all and just use fiat from your job to pay for it. Remember in the US you are paying capital gains on your conversions so every time you pay a bill with converted crypto you need to set aside what equates to about 40% of what you converted for taxes.

Convert ETH to $200 USD

Pay a $200 electric bill.

You owe ~$80 in taxes from that transaction.

Yes I agree this is the best stragy by far. I guess I should get a day job. I want to go on record saying every time that I have taken out crypto, which has been hardly never, I have paid taxes

Topic: How are you guys paying for electricity and bills? - page 2. (Read 721 times)