Forgive me if the topic has been touched, and it will vary from country to country and even state to state. But I’m hearing that people operating as a business are buying hardware and writing off 60% of it as being tax deductible, along with electricity costs. So for easy math let’s say someone is running at 8c, they managed to get their cost down to 4c/kw because of tax breaks and got 50% written off their miner. Imagine doing that with an S21 and only paying $1500. Even if it doesn’t ROI for a year, having the ability to write it off as a loss and make it tax deductible on my day job would be insane, or to strategicly buy closer to the end of financial year to make it a bigger write off.
I’d like to hear from more people doing this or even better an accountant that focuses on crypto/mining, bonus points if they know it better in Texas where a lot of businesses operate, the information will help us home miners navigate prices better and know the expected hashrate increases. So Vosk if you could bring someone on the channel that would be great. Cheers
I have only done one year of taxes with crypto. I wrote off a lot of losses and power which was good. I work for myself. The day job is an LTD - LLC - PTY - whatever you use in your county for registered company. The crypto is just a hobby attached to my personal taxes. Most of the miners I bought that year were from drawings from the business. That means every miner I bought incurred an extra 20% income tax when I took the extra income from the day job business. So the good side is my losses on crypto operations took care of the extra income taxes incurred on the funds used to by them. Came out pretty much net zero for taxes.
I expect when I get round to last years return it will be much the same. I get quite a long time to get my report together as I’m attached to a tax agent.
I used Koinly for the last one. It was quite expensive (I thought) due to the number of transactions incurred from trading bots and pools that pay every time you blink. I hate that.
I set up mining as a business two years ago. Nothing special required but in the USA, where electricity is typically around 12 cents per Kw/hr, the only way to make mining profitable is through tax write-offs. Operating at a loss will only be allowed for just a few years before the government wants to see a profit but by then, you have amortized equipment and recaptured most if not all electricity expenses. Hopefully, by the time tax benefits end for cap-ex, Bitcoin will have risen sufficiently to show mining profit.
Thanks for the response mate, so buying new hardware at current prices makes sense for you. Where I am, as a business you can only write off the GST which is 10% and import tax. Which is unfortunate for me because miner prices will be set globally for supply and demand, and a lot of people under your circumstances will be buying