All I'm thankful for is I didn't preorder those 1TH+ miners... with the difficulty this high and now daily mining being taxable as ordinary income (and not when btc are sold/exchanged) and with cost of hardware and power, there's no ROI left. IRS has essentially gifted mining to the Chinese.
The only way you'd owe taxes is if you
were making income by mining (by definition!).
From what I understood, that's only if you file "self-employment", then you can include expenses like hardware and power and then it will all net out plus some writedowns ... if not, then its just ordinary income (although obviously a monetary loss with costs and taxes included)
If you are spending thousands to tens of thousands of dollars on mining equipment and power bills, that is a business, sole proprietorship (what you mean by self employment) or otherwise. It is not a lemonade stand or a garage sale. Possibly you could screw that up by not operating properly, keeping good records, etc. You may judge that not to be paperwork trouble and decide not to mine for that reason, which is certainly reasonable. But otherwise there is no reason shouldn't be able to treat it as a business and deduct expenses.