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.
Dont 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.