If a business only ever has expenses and no revenue, they'll figure out what you're up to. If the process can't withstand an audit, you'll probably pay much more in fines and late fees. Sucks. The human farming that is government is still alive and well in the world. Maybe some day we'll move to more voluntary solutions which benefit everyone.
Of course. Hence the need to be diligent and structure well - and keeping revenue (crypto cashouts) and expenses pretty close to on par.
And yeah, hopefully better solutions on the way. Or, they might already be there with trusts and private foundation arrangements, just need to figure out...
That would be amazing. If we HAVE to pay stupid taxes, at least we could choose where it's going - or more importantly where it's not going!
Other problem with making your expenses and profits equal out - if you ever do need to borrow money to get a mortgage or loan - you won't qualify with 0 income.
I love this post though. In the US self employed people are taxed to death (thanks Reagan, you dead douchebag!) at 15% PLUS state and federal tax - like you pointed out - when it's all said and done, it's anywhere from 30% and if you're making good money 45% isn't unheard of. Oh right, then we have Obamacare which is another tax (giant myth its healthcare - it's health insurance you pay $300+ for a month and can't use cause deductibles are $5k+.Talk about theft!)
You got me all fired up with this post. I HATE TAXES!
Agree and also like to add that a hobby with an intent to make a profit is defined as a business. And this idea fits well with this new hobby of many of us called steem(it). If we keep track of steem revenue when exchanged to fiat through some fiat account, then we may be able to deduct "business" (hobby) expenses. This may even potentially include travel, computer, and other expenses related to the steem hobby / business. Surely food for thought t considered that may benefit many of us when properly thought out and exercised.
"Of course, one other option that has been suggested by others on the topic is to merely load up your crypto onto a debit card and then make purchases with that - not reporting it at all
However, such a strategy may be risky."
YES ITS SUPER RISKY , DON'T DO THAT !!!
When you use a debit card you are entering the banking system and the U.S. tax system. Same goes when you cash out of Coinbase to a bank account.
The only way around it is to spend crypto directly .
If you blog for a living you can of course create a business entity and get some tax deductions but also beware that it increases your chances of getting audited.
best way is to claim the max of your tax back and if you get audited ask friend's who clearly aren't being audited for their receipts (new laptops, pc's, navigation, tablets, phones, etc., that'll add up). EASY DONE! Yes it's tax fraud, but they aren't gonna find out!
HAhahahah!!! "Moral of the story? I dunno. Taxes suck?"
I became an expat to reduce my income taxes and love reading ways to legally limit tax exposure. Thank you for this article.
If a business only ever has expenses and no revenue, they'll figure out what you're up to. If the process can't withstand an audit, you'll probably pay much more in fines and late fees. Sucks. The human farming that is government is still alive and well in the world. Maybe some day we'll move to more voluntary solutions which benefit everyone.
Of course. Hence the need to be diligent and structure well - and keeping revenue (crypto cashouts) and expenses pretty close to on par.
And yeah, hopefully better solutions on the way. Or, they might already be there with trusts and private foundation arrangements, just need to figure out...
That would be amazing. If we HAVE to pay stupid taxes, at least we could choose where it's going - or more importantly where it's not going!
Other problem with making your expenses and profits equal out - if you ever do need to borrow money to get a mortgage or loan - you won't qualify with 0 income.
I love this post though. In the US self employed people are taxed to death (thanks Reagan, you dead douchebag!) at 15% PLUS state and federal tax - like you pointed out - when it's all said and done, it's anywhere from 30% and if you're making good money 45% isn't unheard of. Oh right, then we have Obamacare which is another tax (giant myth its healthcare - it's health insurance you pay $300+ for a month and can't use cause deductibles are $5k+.Talk about theft!)
You got me all fired up with this post. I HATE TAXES!
You have my eyes and ears open. Thank you for post rok-sivante
Agree and also like to add that a hobby with an intent to make a profit is defined as a business. And this idea fits well with this new hobby of many of us called steem(it). If we keep track of steem revenue when exchanged to fiat through some fiat account, then we may be able to deduct "business" (hobby) expenses. This may even potentially include travel, computer, and other expenses related to the steem hobby / business. Surely food for thought t considered that may benefit many of us when properly thought out and exercised.
Great information and breakdown. Thanks
"Of course, one other option that has been suggested by others on the topic is to merely load up your crypto onto a debit card and then make purchases with that - not reporting it at all
However, such a strategy may be risky."
YES ITS SUPER RISKY , DON'T DO THAT !!!
When you use a debit card you are entering the banking system and the U.S. tax system. Same goes when you cash out of Coinbase to a bank account.
The only way around it is to spend crypto directly .
If you blog for a living you can of course create a business entity and get some tax deductions but also beware that it increases your chances of getting audited.
Very interesting, thank you for your time spent and all the information given.🕉
Interesting post.
best way is to claim the max of your tax back and if you get audited ask friend's who clearly aren't being audited for their receipts (new laptops, pc's, navigation, tablets, phones, etc., that'll add up). EASY DONE! Yes it's tax fraud, but they aren't gonna find out!
I'd rather keep everything legit.
as much as I'd prefer not to give the government money, it's not that scarce that it's worth the risks.
HAhahahah!!! "Moral of the story? I dunno. Taxes suck?"
I became an expat to reduce my income taxes and love reading ways to legally limit tax exposure. Thank you for this article.
Awesome
Upvoted