Paying taxes is something that is a bit of a hasstle for anyone, but now that crypto is being regulated, Uncle Sam is looking for his cut. Give Caesar what belongs to Caesar!
Last year I only made a few small purchases under $100 with my tiny portion of a bitcoin I owned, so taxes were relatively easy. This year I participated in a proof of stake mining operation for an alt coin, so taxes will be a bit trickier to figure out, because mining is considered self employment income.
The best thing I've learned thus far, and it is still something that I need to work on is, keeping track of all of my transactions on an excel spreadsheet ledger. That's why most are avoiding paying the taxes like the plague. Most don't keep a ledger of their activity. I still have alot to do, and haven't successfully recorded every single transaction down.
Not only do you have to pay taxes to mine coins, but when you convert your altcoin for bitcoin, you must pay capital gains/loss taxes. Then when you want to exchange you bitcoin for fiat, you have to pay capital gains/loss tax again! Now thats a tripple whammy come time to file taxes. Depending on what tax brackets you fall into, you may take home 20%-30% profit after paying exorbitan tax fees.
Altcoins really hurt your pocket come tax season.
