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> ..and then I discovered US crypto taxes, which triggered on every single incremental payout from the mining pool I used How much were you earning off a singl

> ..and then I discovered US crypto taxes, which triggered on every single incremental payout from the mining pool I used How much were you earning off a single GPU? Surely low enough to fit under your standard deduction?

ar-nelson 4y ago
There was probably a way I could have figured out how to keep the profits, but because I only made a few hundred from mining, and I had other capital gains (from stocks) that made that whole part of my taxes complicated, it just wasn't worth the effort and the risk of an audit to try to find a loophole. I printed the forms from TaxBit and paid what it said. People say that US taxes are kept complicated because the tax prep companies profit, or because Republican politicians benefit from frustration at taxes. But I think this is a bigger reason: a lot of people, myself included, when faced with paying extra taxes that just "don't seem right", would rather pay extra that go through the complication of figuring out how to fix them. So the government gets extra tax revenue that they technically didn't require.
- ctvo 4y ago
  > People say that US taxes are kept complicated because the tax prep companies profit, or because Republican politicians benefit from frustration at taxes. But I think this is a bigger reason: a lot of people, myself included, when faced with paying extra taxes that just "don't seem right", would rather pay extra that go through the complication of figuring out how to fix them. So the government gets extra tax revenue that they technically didn't require. So you think people overpay more commonly when faced with complexity and confusion in the tax code vs. underpaying or not paying at all? Is that right? Also the confusion you're describing is also what drives your first reason: > People say that US taxes are kept complicated because the tax prep companies profit People need to use professional services because they're not sure.
  - squeaky-clean 4y ago
    It's pretty well acknowledged that the American tax system is heavily under the influence of lobbyists from tax filing companies like Intuit. You don't see these sorts of problems in other countries for individual or self employment taxes
  - sgtnoodle 4y ago
    The tax code is too complex. I've consulted professional tax accountants three times over the last decade. Professionals don't understand it either. The first one was an oaf in Los Angeles that charged me $500 to redo a back-of-the-envelope calculation I had already done. The second one was an older lady in Silicon Valley. You would think she would have known how ISOs work, but she messed up the calculations anyway. There were no penalties, but she felt bad enough that she filed my taxes for free. She got cancer and retired 6 months later. The third was a friend that prepares taxes for billionaires. His retainer is something like $15K per year. His software's calculations disagreed with my homemade spreadsheet by $40K. In April my spreadsheet ended up within a few thousand of TurboTax. He's still kicking himself over that...
smeyer 4y ago
If you're working a fulltime job, you're very likely to already be well over the standard deduction. It still sounds like the commenter doesn't fully understand the tax situation and might have paid more than they truly owed, but I can't imagine they'd owe $0 on the profits if they're in the US unless they had minimal other income that year.
- ghaff 4y ago
  In the US, especially absent a large mortgage or significant charitable deductions, it's very possible--even probable--that, given tax changes about five years ago, you're within your standard deduction. I certainly am in a normal year.
  - smeyer 4y ago
    I think we're saying different things. If I'm reading correctly, you're saying that most people don't need to itemize and can take the standard deduction, and I certainly agree. I'm saying that OP will need to report even a small amount of income from crypto mining since their income (not itemized deductions) will be more than the standard deduction and the crypto mining will cause them to owe additional income tax.

ar-nelson 4y ago

There was probably a way I could have figured out how to keep the profits, but because I only made a few hundred from mining, and I had other capital gains (from stocks) that made that whole part of my taxes complicated, it just wasn't worth the effort and the risk of an audit to try to find a loophole. I printed the forms from TaxBit and paid what it said. People say that US taxes are kept complicated because the tax prep companies profit, or because Republican politicians benefit from frustration at taxes. But I think this is a bigger reason: a lot of people, myself included, when faced with paying extra taxes that just "don't seem right", would rather pay extra that go through the complication of figuring out how to fix them. So the government gets extra tax revenue that they technically didn't require.

ctvo 4y ago
> People say that US taxes are kept complicated because the tax prep companies profit, or because Republican politicians benefit from frustration at taxes. But I think this is a bigger reason: a lot of people, myself included, when faced with paying extra taxes that just "don't seem right", would rather pay extra that go through the complication of figuring out how to fix them. So the government gets extra tax revenue that they technically didn't require. So you think people overpay more commonly when faced with complexity and confusion in the tax code vs. underpaying or not paying at all? Is that right? Also the confusion you're describing is also what drives your first reason: > People say that US taxes are kept complicated because the tax prep companies profit People need to use professional services because they're not sure.
- squeaky-clean 4y ago
  It's pretty well acknowledged that the American tax system is heavily under the influence of lobbyists from tax filing companies like Intuit. You don't see these sorts of problems in other countries for individual or self employment taxes
- sgtnoodle 4y ago
  The tax code is too complex. I've consulted professional tax accountants three times over the last decade. Professionals don't understand it either. The first one was an oaf in Los Angeles that charged me $500 to redo a back-of-the-envelope calculation I had already done. The second one was an older lady in Silicon Valley. You would think she would have known how ISOs work, but she messed up the calculations anyway. There were no penalties, but she felt bad enough that she filed my taxes for free. She got cancer and retired 6 months later. The third was a friend that prepares taxes for billionaires. His retainer is something like $15K per year. His software's calculations disagreed with my homemade spreadsheet by $40K. In April my spreadsheet ended up within a few thousand of TurboTax. He's still kicking himself over that...

smeyer 4y ago

If you're working a fulltime job, you're very likely to already be well over the standard deduction. It still sounds like the commenter doesn't fully understand the tax situation and might have paid more than they truly owed, but I can't imagine they'd owe $0 on the profits if they're in the US unless they had minimal other income that year.

ghaff 4y ago
In the US, especially absent a large mortgage or significant charitable deductions, it's very possible--even probable--that, given tax changes about five years ago, you're within your standard deduction. I certainly am in a normal year.
- smeyer 4y ago
  I think we're saying different things. If I'm reading correctly, you're saying that most people don't need to itemize and can take the standard deduction, and I certainly agree. I'm saying that OP will need to report even a small amount of income from crypto mining since their income (not itemized deductions) will be more than the standard deduction and the crypto mining will cause them to owe additional income tax.