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.
Is it more beneficial to depreciate in a single year or to sell crypto at a time that you don't wish to sell it in order to pay your taxes?