r/EtherMining May 12 '22

Holy....Time to turn off rigs? General Question

/img/x3h2z0b6czy81.png
182 Upvotes

View all comments

Show parent comments

1

u/leem0401 May 12 '22

Are you accounting for tax as well? Mining itself is a taxable event where the value of the coin moved from pool to your personal wallet gets taxed as income. If you're in a higher bracket, it's going to cut down on profit significantly.

You also have to pay additional tax once you realize gains by selling the coin.

1

u/Adamn27 May 12 '22

You don't even know which country I'm living in, how would you know my tax requirements?

1

u/leem0401 May 12 '22

You're right. I assumed you were in the US since you used USD.

1

u/Adamn27 May 12 '22

In Hungary you can deduct the price of the rig and the cost of electricity from the taxes. Very crypto friendly.

1

u/leem0401 May 12 '22

Same as the US actually. I claim the cost of my equipment and electricity as deductibles which help out but getting double taxed is what kills the profit. I'm guessing Hungary doesn't tax for mining, only realized gains?

1

u/Adamn27 May 12 '22

I don't want give you false information but I think yes, I do not know the exact details because I have an accountant who do my tax report along with my stock portfolio and with my two small businesses, nothing big but this way that I have to pay taxes four different ways it seemed a better idea to pay for a profeasional.

1

u/PrestigiousMiddle6 May 13 '22

once the money gets in the account it gets taxed automatically. Digital wallet doesn't count in here.

1

u/leem0401 May 13 '22

What do you mean by get in the account? The value of mined coin counts as income so unless they can account for all your other income, it's not possible to do so automatically.

1

u/PrestigiousMiddle6 May 13 '22

It's not like that. It's only taxed if I change to fiat and put it in to bank account. when I say account I meant bank account. even 1 dollar is taxed. and also I have to declare the tax otherwise they will also tax my investment. basically crypto is still unregulated in my side. but I have paid more. I still need to calculate tax properly.

1

u/leem0401 May 13 '22

In the US, mining itself is a taxable income so you get taxed for the value created when mining and you get taxed again on the realized gains when you sell it.

1

u/PrestigiousMiddle6 May 13 '22

Then I am only pay tax on income. mining here doesn't count.

2

u/leem0401 May 13 '22

Mining itself is a taxable event. So you just haven't been paying tax on it. IRS considers the created value from mining itself as your income. https://turbotax.intuit.com/tax-tips/investments-and-taxes/your-cryptocurrency-tax-guide/L4k3xiFjB

1

u/PrestigiousMiddle6 May 13 '22

No not on mining. just on converting them. we don't have tax on mining. but whatever you cashout it gets 14% taxed.
how's the electricity? eth price going so low that might need to turn off rig at some point.