Everything you do on the blockchain is recorded. Even though I believe the government has no clue how to handle this right now I'm sure that at some point in the future they will.
Let's say the year is 2023, they have finally realized how this works. They look back in time and see that I had a substantial dollar's worth of STEEM crypto that I didn't pay taxes over in 2017. I think that's fraud. Or tax evasion. It can't be good.
I don't want to hide anything. I want to pay my taxes. I don't mind it. It's good living in the Netherlands and I don't want to worry about these things. That's freedom too.
That's why I always included my crypto holdings in my tax return. (And it probably also has to do with my Dutch need to always play by rules.).
But if crypto keeps going up like it has in 2017 than it might be a little more than they used to this year.
So, I started to put money aside for this already. Just like I do for taxes regarding my company. I think that's a smart move.
But with Steem it's also different now. It's possible to earn crypto with Steemit and the Steem blockchain through content creations and I don't know if this is considered an income (income tax) or a property tax. I have no idea. I need help and I'm looking for it actively.
I talk about it more in my vlog.
Follow Me @exyle
I think the whole tax system will need to be rethought. The tax system we have now was designed for 20th century economic models, where it was easy to follow the money and tax individuals/corporations accordingly.
Automation and robotics are already starting to erode the income tax base and this will accelerate in the coming years making it less ineffective. We are also seeing that that existing tax models do not work for blockchains and crypto money. Unlike before, everything is becoming decentralised and individuals have control of their money, not a centralised entity which can easily be audited. The fact that this money is created by the internet - which is everywhere - and not in a sovereign nation just adds to the complexities. All governments are struggling with this because they are trying to retrofit old tax laws to a new asset class and we're seeing that it doesn't work properly.
Also, don't forget, income tax has only been around for about 100 years. This is not a tax that existed for a long time historically. Perhaps it's time it's time it was scrapped it altogether since it is becoming less fit for purpose.
"Perhaps it's time it's scrapped altogether since it is becoming less fit for purpose"
100%
I was just thinking about this the other day. Living in the US, the definition of Cryptocurrency is rather murky. The government considers it a currency, hence the need for currency exchange license for crypto exchanges operating in the US, including FINCEN rules regarding Know Your Customer (collection of identity information for all customers).
Yet the IRS has defined it as property, so capital gains taxes would apply anytime it is exchanged for goods or services. Here is where it gets even stickier with Steemit, since your are being paid for work, which typically becomes a taxable event at the time the work is performed, not when the item of value that is transferred in exchange for work is sold.
My guess is the IRS would be very willing to accept taxes you pay on earnings from crypto sales or Steemit earnings, but if we would have a pull back at the end of the year, I believe they would be reluctant to allowing a loss deduction for the decline in market value.
It is going to be an interesting period that we are entering!
Until you withdraw anything into your bank account, tax cannot be applied.
Crypto currency is still considered as virtual currency by government... there cannot not be any tax for virtual currency. If they come with a law which accepts crypto currency as real currency then we should include it in tax returns.
that's been my understanding too.
The tax rules regarding crypto currencies are very vague here in the US. I hired an accounting firm who specializes in crypto (one of about 5 in the whole country) to do my taxes last year. I was so surprised at how ill-defined the rules were. I had a hefty bill but I didn't mind, like you, I would rather be transparent from the beginning.
I totally agree. I just want to have this all on the table. I have no interest in fines or worse. I rather pay my tax and be clean. Smart thinking hiring that firm. Atleast, you got it done right!
I don't give a shit about govt. I am free man. Yeah!!!!!!!!
LOL! Good luck!
haha. Thanks!!!
Yes, that's something I've thought a lot about too. I live in Australia so it's a bit different, but I did look up the taxation laws for bitcoin and other cryptos in Australia.
To the best of my understanding investments in cryptocurrencies don't encur tax if they are used for personal expenses, even the investment has appreciated in value. But they are taxable if the cryptocurrencies are used for business purposes. This is for Australia, but probably different for the Netherlands.
I pretty convinced it differs from country to country. This is good info for Australians. Last information I could find is that I would have to pay 1.2% over my total holdings. Which I would have no problem with.
Taxes are a really good topic to discuss and something a lot of Steemians probably haven't given much thought. Thank you very much for addressing this! Could save a lot of people a lot of trouble down the road.
It's a good thing to think about at least!
A very good thing. If this is not at the forefront of people's mind here on Steemit, and taken care of properly, it can become quite an issue! Have a great day! :)
You bring up a very, very important topic. @jerrybanfield recently covered this. Here is a couple links that might help:
(go to the last 1/3 of the video and he shows exactly how he's keeping track of his steemit earnings.)
https://steemit.com/steemit/@jerrybanfield/steemit-tax-calculation-and-payment-system
Here he goes into great detail about keeping records for taxes regarding Steemit.
I created a spread sheet and am keeping daily records as @jerrybanfield set forth.
Hope this helps as this is a very important topic that all Steemians need to keep track of. Great post and discussion! Resteemed
Thanks for the link! I'll check it out!
I neither I don't mind paying taxes but the government need to fix the problem, how to include my crypto holdings on my tax return when we don't have a cryptocurrency regulation.
Yeah, they better step up!
What a good video ... I expect 99% won't pay taxes on capital gains at all for a few years but you are right, the government can back track everything... time will tell 😭😂
That's the problem. You might think it's all secret now but it could potentially get back to you. For me, it's clear I want this straight from the start.
Totally makes sense... save that tax money guys lol
I think any kind of capital gain falls under tax liability until & unless the state has made some exemptions...not sure in Netherlands what is the rule for capital gains from cryptos but here in India the government is planning to tax crypto earnings.
Last information I could find is that I would have to pay 1.2% over the value of my total holdings. Which I would have no problem with.
Good post, I agree. Better to e on the safe side than regret and pay more (even your freedom) later...there is still enough for you after tax..great guy
Cheers man! I agree.
Great my buddy...welcome and more success.
I just posted a new intro...
Thanks
Upvoted, resteemed, and promoted to the top of the page. Great analysis.
thanks!
Nice post although many will want to discuss tax as little as possible! Maybe they will get their heads around it in a few years, so it's best to put some aside ready I guess. Not that I have this 'problem', yet!
As a side note, I blogged about steemfest 2 the other day, and if you have 2 mins to look I'd appreciate your thoughts. Thanks! Asher
One way or another hiding money from a government usually ends badly....I have no choice my face is all over steemit.
Haha yeah, no hiding now!
Thank you for this video resteemed and followed :)
Cheers!
To me the earnings should be seen as income. My take however is that as long as I keep the money in crypto, I don't have to pay tax on it, but as soon as I convert it in FIAT, then I should declare it as income and pay my dues.
Last information I could find is that I would have to pay 1.2% over my total holdings. Which I would have no problem with. This doesn't cover my earning in SBD though. But maybe that's the same because we don;t get paid in Euros/US dollars.
Thank you for the info
just move bruh , 50% is normal in your country , they should take it all .
We pay a lot of taxes. But then again....I like living here.
Will follow as i am curious about this as well. And when does it change of having funti serious income?
meep
Thank you! Great post about important stuff for me as well, I live in Norway and it`s a lot that you are talking about that is similar, I also happily pay my tax. I´m pretty sure my accountant can´t answer me on any of these questions :)
Haha, it's tough finding the answers. I'm looking for the right accountant.
At least in the US, taxes on crypto make no sense. They are basically unpayable. They assume the value of something like Steem with logic that could be used to tax Reddit Karma. They don't care that, until you cash out, you have made no gain, and could in fact lose it all. They also don't care that the quoted price is not a real price, because making a large sale into a thin market will crash the price. They will price every Steem you make at the marginal dollar rate, despite the fact you'd never receive that much if you dumped it.
Crypto taxation is fraud and property theft, not income tax. It will not last.
Presently my taxes are being used to destabilize the world in order for the USA to maintain monopoly control. Its being used to fund Black budgets and to insure the survival of the dark state even after the USA as we know it is long gone. They are used to fund the Prison Industrial complex and Military industiral Complex. Not to mention the cost of corporate welfare. I did not sign up for this and am not interested in continuing to fund it. This not what I signed up for.
NO TAXATION WITHOUT REPRESENTATION!
Do you think the GOV will come after us in a few years? Huummm...
The blockchain is open. What you think is secret now might not be in a few years. That's why I think it's smart to just be honest about it.
very nice post amazing work
thanks!
Nice post , following you
I would love to pay my taxes my accountant has no idea how can this implemented on my form though.
Some day bro. Till then enjoy the ride.
Sure thing man! Enjoying the ride!
What happened to your foot?