Also keep in mind that the elec and hardware are business expenses that can be written off..
You nailed it jjiimm_64. If I had a company and I could write off the cost of electricity and hardware my mining rig farm would look like this
For those unfamiliar with "writing things off" as a business expense, I'd also like to point out:
If you "write off" $1000 in expenses, you save whatever taxes you would have paid on that amount -- not the full $1000.
How it DOESN'T work: You owe $2000 in taxes, but you spent $900 on equipment, so now you owe $1100.
No, you only save the % in self-employment tax (15%) plus whatever tax bracket you're in (10%, 15%, etc.) which varies by how much you make per year.
Deducting things from your taxes basically means you get to spend your pre-tax income on them, that's all. You're lowering your total tax burden, but you *are* spending money that would otherwise be yours as well. Namely, that other 75%.
So if I buy $1000 in PC equipment, I spent $750 of my own money, plus $250 that would have gone to the government anyway. Attractive, yes, but it would be even better if I could spend $1000 of the government's money
Oh, and electricity is only deducted if you have a separate facility. If your rigs are at home, you can only deduct a PERCENTAGE of the electricity spent -- namely, you have to divide the square footage of your server room by the total square footage of the house (10% or 15%?) and that's how much of your home's electric bill you can deduct as a "business expense".
So, long story short, starting an official "business" doesn't magically make un-economical ventures economical
You still have to deal with expenses, making sure your income is greater than your expenses, etc.
This is not tax advice. Please speak to your tax advisor, accountant or CPA.