Since I speak so often about the positive aspects of using cryptocurrencies, I thought I'd touch on one of the negatives today - taxes.
The volatility of cryptocurrency prices can potentially lead you into trouble with paying income tax on cryptcurrencies that you've earned if prices crash afterwards.
If you can't pay your taxes directly in cryptocurrencies, then it's essential to make sure you have some fiat cash saved to ensure that you can pay whatever income taxes you're liable for.
DISCLAIMER: This is NOT financial advice. I am just offering my opinions. I am not responsible for any investment decisions that you choose to make.
Forget taxes, being a crypto-Youtuber is the biggest risk! You're essentially telling every tech-savvy crook, extortionist and kidnapper that you have lots of loot that is ripe for the taking!
Russian Crypto Developer Beaten, Robbed Of 300 BTC On Moscow Streets: https://cointelegraph.com/news/russian-crypto-developer-beaten-robbed-of-300-btc-on-moscow-streets
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this is a must watch
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great topic as always @louisthomas ! I've always wondered what happened with taxes... I think the situation is still confusing and not clear... I even asked an "accountant expert", and he didnt know the answer clearly, because it is yet to define if btc is an actual currency, an asset, or what the heck it is... hahaha... But if you keep your cryptos and never turned them into fiat, you are "kind of out" of the system...I mean, btc does not belong to any specific country, but to the internet if it was a country...so the matter is quite controversial and I am not sure about it... anyways, most of the taxes you pay today go to 2008 banks bailouts and never ever payable debts of extremely corrupt governments controlled by banksters, to the detriment of future generations, so I am not sure about the legitimacy of those taxes either... what are your take on that mate? I also encourage you to read my latest article about a real experience I recently have in Madrid helping homeless people... hope you will like it and enjoy the reading! Greetings from Spain (no snow here, quite sunny in Valencia actually :P hahah) CHEERS AMIGO!
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Government logic is as follows:
When is it a currency: When it doesn't threaten the government
When is it an asset: When the government can tax you
Can't win. It is what it is I guess!
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good answer...but how can they tax you if you use things such as monero? Would that be any possible?
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They´ll tax Monero users by banning it and potentially forcing companies to not accept it, limiting the adoption to illegals only, then going after them.
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ok...they can try....but how can you stop decentralized peer to peer ecommerces such as open bazaar? there is no company to shut down... and it is just an example... using toor and monero you are virtualy inexistent...
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I imagine you not having too as long as there´s a way to trace people. It may be possible in the future to trace through blockchains (using BLOCKNET) for example.
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When people eventually cash-on their monero for fiat, that is when they will ask questions about your income.
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what about this mate? It depends on the government also... Japan welcomes btc adoption...and now germany seems quiite crypto friendly too... are they prepearing the territory for the upcomming crash of the dollar and most fiat currencies? ... https://www.coindesk.com/germany-considers-crypto-legal-equivalent-to-fiat-for-tax-purposes/
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Important video. Many investors are not taking tax seriously. The government cares about very few things but one of them is tax and they seem to have endless resources when it comes to tax investigations (except of course for massive companies that they seem to turn a blind eye to their redistribution of profits to tax havens..).
It's worth the time and money obtaining tax advice from a qualified tax accountant. Consider it a small cost of doing business.
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It is good a striking balance is laid on both the pros and cons of cryptocurrencies.
Despite the waves and benefits of cryptos. It might be an herculean task totally eradicating fiat currencies.
It's a good suggestion you dwelled on from the video
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@louisthomas quite some snow you got there in the UK! Thanks for this interesting video. This taxes stuff is going to be very confusing! Depending on the coins/token/crypto (Security / Utility etc.), depending what you do with it (Hodl, Trade, Pay stuff with) as well as how you got it (bought, mined, earned). With increasing adoption of cryptocurrencies as well as increasing amount of different concepts, platforms, and tokens, this will be one hell of a ride for taxpayers and for governments. In regards to its volatility, I like your idea with the relative taxes (x% of your Crypto earnings), instead of the absolute FIAT value. All other alternatives I can think of have some kind of flaws...
Thanks again for your video and keep up the good work!
Cheers - @sblue
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Hi! Interesting topic. In Switzerland (where I’m from) you basically don’t pay taxes on crypto investments. It’s something like 0.1%. I don’t know if that’s because they still need to catch up to the crypto phenomenon (which for a country like Switzerland sounds odd) or if they’re simply very welcoming to this whole new space.
This might be the case since more and more companies based on blockchain technology are born here in our alps : )
The next couple of years will be very interesting in regard to this topic.
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Hey fellow Swiss Steemian! :) I've heard/read different things... they seem to catch up, check out this article: Watson.ch: So versteuerst du deine Kryptowährungen korrekt
What do you think of this article? Even if it was wrong, I think things are going to get super tricky very fast...
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Hello to you sir! Unfortunately I live in Tessin. I speak Italian and french... my German is very basic. Can you give me the main bullet points?
Thank you for sharing, btw : )
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Surely you only pay tax on what your crypto is worth at the time you convert to fiat
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Absolutely!
If you Rack up huge gains on a random PAC coin trade, sell that for Litecoin, and then hold all the profits in Litecoin, you still have to pay the taxes on the capital gains from the PAC coin trade.
Sucks, but, that’s life...and there’s is no life without taxes, unfortunately.
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Nice informative video. I think that the whole crypto / tax situation could become a real mine field and that governments may well begin to look at it as a "low hanging fruit" that they can tax at will, especially as most of the beneficiaries of the crypto boom are not big corporations with an army of lawyers and accountants. While this is really unfair I can't see any government allowing people to pay tax in anything but GBP so sensible advice would be to get a good accountant and have a "rainy day fund" in GBP ready just in case.
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Logical actually but I didn't even think about this issue! This is also good why some governments start to accept crypto's as a form of payment.
Thanks for sharing!
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Great info. Definitely have more to think about. I still dont believe paying taxes in crypto, especially BTC is a good idea. you could pay 2000 in btc for taxes but later it could possibly be worth way more than that. Then youd just want to kick yourself in the rear end FOREVER lol
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PEOPLE ALWAYS GAIN AT THE END OF THE YEAR BETWEEN NOVEMBER AND DECEMBER THE PROBLEM THAT I SEE IS WHEN YOU ARE TRAPPED AND YOU HAVE TO PAY TAX INTO YOU SELL TO LOSE UPS
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thankyou @louisthomasfor making this video and your opinion positive aspects of using cryptocurrencies yeah someOne told that cryptocurrency is dangerous but dont think soo is it :p
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I think that depends on one's country of residence. In Russia or other ex soviet block countries - it's a total tax free heaven for anyone earning in crypto.
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We should always keep this in mind, louis.
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I´m a big fan of your articles and video´s. Keep up with the good work!
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Good topic! no one talks about it but it is really important to declare you crypto taxes properly, maybe thats a new lesson for my post https://steemit.com/blockchain/@williamcrypt97/one-year-a-thousand-lessons read it and I hope you like it!
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That's a good insight into tax related to cryptos. This is surely something we should keep in our mind.
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Wonder how those bots doing microtransaction upvotes and getting paid a week later in millicents calculate their crypto to fiat exchange rate at the time of payouts (earnings)? Those transactions can run into the millions. Do you hire an entire accounting firm for about a year to calculate the income from Steem?
I told my tax accountant about this and she said that the IRS hasn't got a clue about what to do about this. I give it about 5 years before a serious equity drain forms in national fiat. Some countries are racing to create their own centralized versions of crypto. Bitcoin and many alts won't oblige.
Infrastructure inversion is coming for sure.
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Hodl the bitcoin sell it when is worth loads of money and then pay a fortune in lawers to get best deal in tax payments
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@louisthomas: It seems possible to carefully sell some of your bitcoins into shitcoins in loss and thereby avoid tax. If the government is taxing you for capital gain, they must also allow you to claim short term capital loss.
What do you think?
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