How are you guys paying for electricity and bills?

Golftech

hero member

Activity: 2128

Merit: 520

Quote from: jmigdlc99 on March 05, 2018, 01:19:13 AM

Quote from: Pekine on March 02, 2018, 05:28:04 PM

with money off course

Perfect response. /s

But seriously, i pay mine with fiat from my regular job. Time has proven too many times that hodling is way better than auto converting a part of your crypto portfolio just to pay the bills. Only convert when selling price is high.

I do learn to practice this too bro, as I understand that in due time the value of the coins that I mine really fluctuates and by holding it and wait till
the price went much higher is way better than converting it right away to pay bills and to have little earnings, mining can be treated as good past time
and a habit that will generate decent earnings if we pay attention well, the longer we hold and believe with the project that we are mining the more
we will be able to earn bigger.

jmigdlc99

sr. member

Activity: 784

Merit: 282

Quote from: Pekine on March 02, 2018, 05:28:04 PM

with money off course

Perfect response. /s

But seriously, i pay mine with fiat from my regular job. Time has proven too many times that hodling is way better than auto converting a part of your crypto portfolio just to pay the bills. Only convert when selling price is high.

Druiz287

jr. member

Activity: 56

Merit: 8

Quote from: whoismoses on March 03, 2018, 08:54:45 PM

Quote from: nsummy on March 03, 2018, 04:06:57 PM

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.

The only problem with your logic is that buy a share of stock is not the same as mining crypto. Let me explain.

If you were my employee and I paid you for your work in company stock it would be taxed at the price I gave it to you as income and when you sold it would be taxed again on the difference either as a either a capital gain or capital loss (assuming you held it for more than 12 months).

Now, if you buy crypto you only pay capital gains on the difference, again assuming you held it for 12 months.

Trust me.

Small miscommunication here. NSUMMY is saying the same exact thing, but looking at it from an investor's standpoint rather than a miner's.
WHOISMOSES, you are correct in that cryptocurrency is recognized as revenue, and as a result taxed, when it is earned. So lets say that on a pool I mine $1,000 worth of bitcoin on the 1st and I also mine $1,000 worth of bitcoin on the 15th. As of the 30th of that month, I've mined $2,000 worth of bitcoin. If my electricity expense was $200 for the whole month, I will owe taxes on $1,800 (assuming that there are no other expenses I can deduct). Now, lets say that I decide on the 30th to cash out that $2,000 in BTC. But I run into a problem because the BTC price has dropped. So now that same $2,000 of BTC is only worth $1,500 but I still decide to cash it out. Then I get to list a capital loss of $500, meaning my taxable income has dropped by that much ($500 in addition to the $200 from expenses). I would only pay taxes on $1,300.

Sources:
http://theminersunion.com/2017/09/11/what-you-need-to-know-about-bitcoin-mining-taxes/
https://www.irs.gov/pub/irs-drop/n-14-21.pdf
https://www.irs.gov/newsroom/irs-virtual-currency-guidance

whoismoses

member

Activity: 247

Merit: 59

Quote from: nsummy on March 03, 2018, 04:06:57 PM

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.

The only problem with your logic is that buy a share of stock is not the same as mining crypto. Let me explain.

If you were my employee and I paid you for your work in company stock it would be taxed at the price I gave it to you as income and when you sold it would be taxed again on the difference either as a either a capital gain or capital loss (assuming you held it for more than 12 months).

Now, if you buy crypto you only pay capital gains on the difference, again assuming you held it for 12 months.

Trust me.

gotminer

member

Activity: 644

Merit: 24

Quote from: crocozino on March 03, 2018, 01:51:53 AM

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.

Bambangs

member

Activity: 238

Merit: 11

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.

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

Viecoin

hero member

Activity: 852

Merit: 500

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.

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.

nsummy

full member

Activity: 1179

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Quote from: whoismoses on March 02, 2018, 10:46:01 PM

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.

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.

BitcoinSupremo

copper member

Activity: 1442

Merit: 529

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.

Spllouder

newbie

Activity: 24

Merit: 0

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

Druiz287

jr. member

Activity: 56

Merit: 8

Quote from: Trasamania on March 03, 2018, 08:04:51 AM

Quote from: edwardceng on March 03, 2018, 07:23:49 AM

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?

Kronos21

sr. member

Activity: 434

Merit: 255

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.

kriskarthik

full member

Activity: 258

Merit: 100

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.

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 Grin

Trasamania

newbie

Activity: 33

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Quote from: edwardceng on March 03, 2018, 07:23:49 AM

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.

edwardceng

member

Activity: 266

Merit: 50

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.

lili song

hero member

Activity: 980

Merit: 509

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.

chandrarahmadewa

member

Activity: 308

Merit: 49

Quote from: Branko on March 02, 2018, 04:59:23 PM

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

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 Grin

bitcoinmasterlord

legendary

Activity: 1148

Merit: 1006

Quote from: crocozino on March 03, 2018, 01:51:53 AM

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.

crocozino

sr. member

Activity: 420

Merit: 250

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

Tidsdilatation

sr. member

Activity: 518

Merit: 250

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 Cheesy

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: 2702

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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: 2702

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

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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

gotminer

member

Activity: 644

Merit: 24

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.

fanatic26

hero member

Activity: 756

Merit: 560

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.

Branko

sr. member

Activity: 2702

Merit: 328

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?

I personally sell crypto for bill and haven't had the best strategy when selling crypto. Im thinking Im just going to get a day job and be a slave to society for a little while.

I pay it from daily job, but soon MWAT coin will pay for my electricity...I'll even have some to spare to sell to neighbours

BaNgTHai

full member

Activity: 166

Merit: 100

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.

Topic: How are you guys paying for electricity and bills? (Read 749 times)