The same goes for every country, you need to show your bank transactions and all the major insurance bills and your salary slips to file for income tax. Why do you need to mention bitcoin transactions separately? I have been earning bitcoin since last two years and I believe, until and unless I am cashing out my bitcoins, there is no need to show it your income tax department.
I have cashed out my bitcoins few times during the last two years and I have shown a total amount under "Income from other source" every time. This amount is only the amount I have cashed out. The government levied tax on it appropriately and I believe I have done it in a legal way. Until I am cashing out my bitcoins, it is not really an income for me, right?
Topic: How to TAX Bitcoin. An easy way ! - page 5. (Read 4381 times)
I think the government should not tax income from bitcoins. Much more profitable for the government refers to such income as investment in the economy. It will bring more benefit than the turnover of such amount of money in the shadows.
IMHO, it must not be subjected to tax. The spread when buying it from exchanges and selling it for fiat should cover any fee the government wants. Look at it this way, it is still not a stable commodity. It would just be unfair to tax someone who just bought bitcoin and haven't even held it long enough when a crash came.
Sure the government might want more sources of money but they can't rely on bitcoin since it could just dry up in a matter of hours and not recover fast enough for weeks. The government should be content with whatever increase in purchasing power bitcoin grants citizens.
Sure the government might want more sources of money but they can't rely on bitcoin since it could just dry up in a matter of hours and not recover fast enough for weeks. The government should be content with whatever increase in purchasing power bitcoin grants citizens.
Yes you did miss many things if someone stores his bitcoin on an online wallet whenever they send any funds it will be sent from a different address and there is ways the wallet doesn't share information. Now when you send transactions you can use the bitcoin mixing sites which hides this from authorities. The only way is kyc asked in exchanges now for all the past purchases it will be hard to track
If you use an online wallet, it's 100% likely for it to be tracked, because the wallet can very easily keep logs. With government regulation, it's inevitable that they would be forced to do so, and without government regulation they're 90% likely to scam you eventually.Your anonymity is much better off not using an online wallet.
I'm looking into living off Bitcoin legally, and so far I'm thinking the easiest way is to make a company. That way the company has clear accounts with spendings and earnings and can pay all the needed taxes. Then I'm just an employee of the company, with a salary in fiat.
Depending on where you live, you should be able to do this as a corporation, or under your personal income taxes. Keeping track of the accounts clearly are necessary either way, with respect to income, and capital gains.
In my country there is a stupid limitation that if you earn more money from trading than from a regular job, you must declare those earnings differently than if you just make a few thousands, then you just need to add it to your income and get taxed at the marginal rate (up to 45%).
Since crypto earnings can vary wildly, this makes everything more complicated.
But that your government recognizes bitcoin as a currency? I doubt it. Your income in bitcoins according to the law is not revenue. If you buy goods with bitcoin it does not fall under the tax base. If you exchange them for your currency, then taxes will have to pay.
Absolutely, I agreed to what you just mentioned on this thread. Bitcoin can't have tax as long as it is decentralized. We all knew that once the government are able to control bitcoins, it means bitcoin is no longer decentralize but instead it is centralize already.
But that your government recognizes bitcoin as a currency? I doubt it. Your income in bitcoins according to the law is not revenue. If you buy goods with bitcoin it does not fall under the tax base. If you exchange them for your currency, then taxes will have to pay.
Absolutely, I agreed to what you just mentioned on this thread. Bitcoin can't have tax as long as it is decentralized. We all knew that once the government are able to control bitcoins, it means bitcoin is no longer decentralize but instead it is centralize already.
The last transaction I made from very first (and the one which I use to sign messages) was on 2017-02-27. That is exact 4 months ago, so does that mean I have not used bitcoins in those 4 months?. Probably I might have transacted over millions of dollars in bitcoin so the people who are tracing my primary bitcoin address will never find any information about my transactions. There is a very low number of people who will willfully disclose their bitcoin holdings and taxation would not work effectively in that way.
p.s - I haven't spent millions of dollars, I do not try to evade tax while dealing btc/fiat trades.
p.s - I haven't spent millions of dollars, I do not try to evade tax while dealing btc/fiat trades.
But that your government recognizes bitcoin as a currency? I doubt it. Your income in bitcoins according to the law is not revenue. If you buy goods with bitcoin it does not fall under the tax base. If you exchange them for your currency, then taxes will have to pay.
Absolutely, I agreed to what you just mentioned on this thread. Bitcoin can't have tax as long as it is decentralized. We all knew that once the government are able to control bitcoins, it means bitcoin is no longer decentralize but instead it is centralize already.
In my country, I have to fill a form every year for the tax department, including my year end bank statement and the salary bill.
Together with some major bills for insurance and healthcare, that's all they get.
So I can hide cash under the bed, or have an overseas account, or have some Gold bars, etc. The goverment has to thrust me quite a bit.
They can check some transfers, but if you like to hide it, you can do it.
So the actual way of getting the real numbers is quite bad.
In Bitcoin
If the Tax department makes it a rule by law, that you have to report every BTC address you own, or every wallet you own ...
All problems solved, because then the Department has also the addresses of the petrol station and the deli you spend money.
In no time the system knows which tax counts here and can claim the respective amount from both sides.
Sure it is still possible to hide Bitcoins, but then it is illegal.
...or did I miss something?
Together with some major bills for insurance and healthcare, that's all they get.
So I can hide cash under the bed, or have an overseas account, or have some Gold bars, etc. The goverment has to thrust me quite a bit.
They can check some transfers, but if you like to hide it, you can do it.
So the actual way of getting the real numbers is quite bad.
In Bitcoin
If the Tax department makes it a rule by law, that you have to report every BTC address you own, or every wallet you own ...
All problems solved, because then the Department has also the addresses of the petrol station and the deli you spend money.
In no time the system knows which tax counts here and can claim the respective amount from both sides.
Sure it is still possible to hide Bitcoins, but then it is illegal.
...or did I miss something?
Great idea!!!
...... yes you did miss something.
Unlike paypal and bank accounts(although one can own multiple as well they are way more difficult to create than bitcoin addresses), bitcoin addresses are incredibly easy to create. By running a script you can generate hundreds of bitcoin addresses if not more per second if your computer's fast enough.
Bitcoin is impractical for the government to tax. Your thinking only works IF a person is honest enough to only use that address for all his transactions. Now, most wallets will give you multiple addresses to use by default for better privacy. How can the government ever track you down and all your addresses? It's just impractical and expensive to do, it'll take more money to do this than the tax theey collect from ya.
In my country, I have to fill a form every year for the tax department, including my year end bank statement and the salary bill.
Together with some major bills for insurance and healthcare, that's all they get.
So I can hide cash under the bed, or have an overseas account, or have some Gold bars, etc. The goverment has to thrust me quite a bit.
They can check some transfers, but if you like to hide it, you can do it.
So the actual way of getting the real numbers is quite bad.
In Bitcoin
If the Tax department makes it a rule by law, that you have to report every BTC address you own, or every wallet you own ...
All problems solved, because then the Department has also the addresses of the petrol station and the deli you spend money.
In no time the system knows which tax counts here and can claim the respective amount from both sides.
Sure it is still possible to hide Bitcoins, but then it is illegal.
...or did I miss something?
Together with some major bills for insurance and healthcare, that's all they get.
So I can hide cash under the bed, or have an overseas account, or have some Gold bars, etc. The goverment has to thrust me quite a bit.
They can check some transfers, but if you like to hide it, you can do it.
So the actual way of getting the real numbers is quite bad.
In Bitcoin
If the Tax department makes it a rule by law, that you have to report every BTC address you own, or every wallet you own ...
All problems solved, because then the Department has also the addresses of the petrol station and the deli you spend money.
In no time the system knows which tax counts here and can claim the respective amount from both sides.
Sure it is still possible to hide Bitcoins, but then it is illegal.
...or did I miss something?
Great idea!!!
...... yes you did miss something.
Unlike paypal and bank accounts(although one can own multiple as well they are way more difficult to create than bitcoin addresses), bitcoin addresses are incredibly easy to create. By running a script you can generate hundreds of bitcoin addresses if not more per second if your computer's fast enough.
Bitcoin is impractical for the government to tax. Your thinking only works IF a person is honest enough to only use that address for all his transactions. Now, most wallets will give you multiple addresses to use by default for better privacy. How can the government ever track you down and all your addresses? It's just impractical and expensive to do, it'll take more money to do this than the tax theey collect from ya.
But that your government recognizes bitcoin as a currency? I doubt it. Your income in bitcoins according to the law is not revenue. If you buy goods with bitcoin it does not fall under the tax base. If you exchange them for your currency, then taxes will have to pay.
Absolutely, I agreed to what you just mentioned on this thread. Bitcoin can't have tax as long as it is decentralized. We all knew that once the government are able to control bitcoins, it means bitcoin is no longer decentralize but instead it is centralize already.
But that your government recognizes bitcoin as a currency? I doubt it. Your income in bitcoins according to the law is not revenue. If you buy goods with bitcoin it does not fall under the tax base. If you exchange them for your currency, then taxes will have to pay.
Absolutely, I agreed to what you just mentioned on this thread. Bitcoin can't have tax as long as it is decentralized. We all knew that once the government are able to control bitcoins, it means bitcoin is no longer decentralize but instead it is centralize already.
Taxing bitcoin is hard. One can evade tax without the notice of the Government. Simply just have multiple address. Evading tax in bitcoin is really easy, even though its illegal the government has nothing to do with it. Only dumb people can be caught. This is one of the main feature of bitcoin, no one can control over yout earnings not even the government.
Gathering money from taxes is why the only choice for government is to simply legalise Bitcoin usage, include BTC in their legal tax framework.To do that you don't necessarily want to catch individuals using BTC, but rather tax bitcoin using services instead.
It is always harder for businesses to avoid taxes that looking for random people using bitcoin as a test payment method.
I don't think reporting and monitoring your Bitcoin address will be a good way. What I mean about that is they don't have a way in which to differentiate what is Bitcoin received from a purchase or Bitcoin received from your friends or family or other non-business purposes. When you look at it this way you will only have more problem with the Taxing department rather than have a good solution at least in my perspective.
In my country, I have to fill a form every year for the tax department, including my year end bank statement and the salary bill.
Together with some major bills for insurance and healthcare, that's all they get.
So I can hide cash under the bed, or have an overseas account, or have some Gold bars, etc. The goverment has to thrust me quite a bit.
They can check some transfers, but if you like to hide it, you can do it.
So the actual way of getting the real numbers is quite bad.
In Bitcoin
If the Tax department makes it a rule by law, that you have to report every BTC address you own, or every wallet you own ...
All problems solved, because then the Department has also the addresses of the petrol station and the deli you spend money.
In no time the system knows which tax counts here and can claim the respective amount from both sides.
Sure it is still possible to hide Bitcoins, but then it is illegal.
...or did I miss something?
Together with some major bills for insurance and healthcare, that's all they get.
So I can hide cash under the bed, or have an overseas account, or have some Gold bars, etc. The goverment has to thrust me quite a bit.
They can check some transfers, but if you like to hide it, you can do it.
So the actual way of getting the real numbers is quite bad.
In Bitcoin
If the Tax department makes it a rule by law, that you have to report every BTC address you own, or every wallet you own ...
All problems solved, because then the Department has also the addresses of the petrol station and the deli you spend money.
In no time the system knows which tax counts here and can claim the respective amount from both sides.
Sure it is still possible to hide Bitcoins, but then it is illegal.
...or did I miss something?
In my country Philippines, we have a coins.ph where you can pay bills there like ( Water bills, load, electricity bills ), everything seems to be going smoothly but these later days, transactions fees are getting high maybe because the central bank in our country is open in regulating cryptocurrencies and they are putting a tax on it. I wonder what will happen in the next months, what I know is like the internet on our country, online wallets will become a hundred peso value with a peso worth of services. Sad.
In my country, I have to fill a form every year for the tax department, including my year end bank statement and the salary bill.
Together with some major bills for insurance and healthcare, that's all they get.
So I can hide cash under the bed, or have an overseas account, or have some Gold bars, etc. The goverment has to thrust me quite a bit.
They can check some transfers, but if you like to hide it, you can do it.
So the actual way of getting the real numbers is quite bad.
In Bitcoin
If the Tax department makes it a rule by law, that you have to report every BTC address you own, or every wallet you own ...
All problems solved, because then the Department has also the addresses of the petrol station and the deli you spend money.
In no time the system knows which tax counts here and can claim the respective amount from both sides.
Sure it is still possible to hide Bitcoins, but then it is illegal.
...or did I miss something?
Taxing bitcoin is hard. One can evade tax without the notice of the Government. Simply just have multiple address. Evading tax in bitcoin is really easy, even though its illegal the government has nothing to do with it. Only dumb people can be caught. This is one of the main feature of bitcoin, no one can control over yout earnings not even the government. Together with some major bills for insurance and healthcare, that's all they get.
So I can hide cash under the bed, or have an overseas account, or have some Gold bars, etc. The goverment has to thrust me quite a bit.
They can check some transfers, but if you like to hide it, you can do it.
So the actual way of getting the real numbers is quite bad.
In Bitcoin
If the Tax department makes it a rule by law, that you have to report every BTC address you own, or every wallet you own ...
All problems solved, because then the Department has also the addresses of the petrol station and the deli you spend money.
In no time the system knows which tax counts here and can claim the respective amount from both sides.
Sure it is still possible to hide Bitcoins, but then it is illegal.
...or did I miss something?
If your goal is to improve society and civilization.
Encouraging the state to cut taxes, spend more efficiently and streamline operations to cut spending are in your best interest.
People shouldn't support raising taxes at every opportunity unless they want to increase suffering, pain and agony in the world.
This is correct, people think that having a bigger government is the way to go, not realizing that a government does not create wealth they are only in charge of trying to distribute it, the problem is the most taxes you pay the fatter the government gets and that means that less money goes to the people that needs it and that only creates an incentive to try to charge even more taxes.Encouraging the state to cut taxes, spend more efficiently and streamline operations to cut spending are in your best interest.
People shouldn't support raising taxes at every opportunity unless they want to increase suffering, pain and agony in the world.
Of course, if the government will create a law we will have to comply with it.
If your goal is to improve society and civilization.
Encouraging the state to cut taxes, spend more efficiently and streamline operations to cut spending are in your best interest.
People shouldn't support raising taxes at every opportunity unless they want to increase suffering, pain and agony in the world.
This is correct, people think that having a bigger government is the way to go, not realizing that a government does not create wealth they are only in charge of trying to distribute it, the problem is the most taxes you pay the fatter the government gets and that means that less money goes to the people that needs it and that only creates an incentive to try to charge even more taxes. Encouraging the state to cut taxes, spend more efficiently and streamline operations to cut spending are in your best interest.
People shouldn't support raising taxes at every opportunity unless they want to increase suffering, pain and agony in the world.
Yes it is true that we pay taxes in each country, it is because we are under control of the government through their system of centralization where they can make a by laws about it, while in bitcoin is designed for decentralization that's why each government country can't do anything about it.
But they would have to recognize it as a currency first, and in the U.S. they don't. But if they did, what you said holds true I think.
To be perfectly honest though, I would guess that 90% of people who have Bitcoins don't earn enough profit from them for the I.R.S. to care about. When was the last time you heard of a typical McDonald's (example) worker getting audited? They don't, and they don't because they don't make enough to put a blip on that radar.
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