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Good luck doing your taxes! Seriously. Is there any simple guidance on how to figure your income if paid in BTC?
by ISL 14y ago
Good luck doing your taxes!
Seriously. Is there any simple guidance on how to figure your income if paid in BTC?
- iwwr 14y agoThey're still paid in EUR, just getting some of that converted to BTC. If selling the BTC later on makes them a profit, it becomes the responsibility of the employee to report any profits. The greater problem is how the employer manages to get a hold of larger amounts of BTC needed.
- jerguismi 14y ago> The greater problem is how the employer manages to get a hold of larger amounts of BTC needed. They are using external service for that AFAIK. The company itself does not manage the bitcoin purchases.
- paavo 14y agoThat's true. They're using the Finnish exchanger (Bittiraha) which also provides payment services for world's first Bitcoin-accepting dental clinic (MeidänKlinikka) as well as Finland's first Bitcoin-accepting restaurant (Vegemesta).
- Cthulhu_ 14y ago> The greater problem is how the employer manages to get a hold of larger amounts of BTC needed. If I were the employer, I'd be wringing my hands; for all I know they could've gotten a small fortune in BTC when they were still cheap to generate / purchase, and since then the value of BTC has sixtupled (or more). So, pay their employees without having to spend real money. I'm probably not understanding BTC though.
- hatu 14y agoI'm not sure how the taxes work but wouldn't it be kind of like buying shares as a company that made good profits. It's not free money in the eyes of the tax office.
- jerguismi 14y agoAnd it is not free money even if you didn't pay the taxes. Who knew 2 years ago that bitcoin would be trading now at almost $50 a pop? There has always been huge risk with buying bitcoins, since it is so new technology.
- analog 14y agoExchange rate at time of payment is what I've always used when handling international transactions.
- jiggy2011 14y agoI wonder how one would go about taxing bitcoin transactions at all if there is no record that can be tied with certainty to a person. You probably get the same thing you do with the cash economy where people just make up the lowest figure that sounds vaguely plausible.
- ceejayoz 14y agoThis already happens with cash tips in the service industries.
- gamblor956 14y agoThe same way they tax transactions in foreign currencies: you self-report taxes. If you don't report all your taxes, and you get caught, then you pay all of those taxes, plus interest (above market-rate interest), plus penalties, and they send you on an all-expenses paid vacation to a federal detention center for a few months or years. Also, substantially failing to report your income effectively means that your tax year never closes, which means that the IRS has effectively until the end of time to pursue you for unreported income. (Whereas normally there is a 3-6 year statute of limitations for the IRS to audit you.)
- jiggy2011 14y agoThe question is, how do you audit somebody? It's easy enough when they have bank accounts that you can look at. With bitcoin it is like having your money spread across thousands of anonymous bank accounts which are opened by secret handshake.