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RE: Does anyone here have a clue how TO PAY TAXES FROM EARNINGS on STEEMIT?

in #steemit6 years ago

I think strictly from a legal perspective, at least in most countries, they would "require" you to pay taxes on your earnings. However, in many cases they would have a difficult time knowing you have an account without some in depth analysis. I would presume it's quite easy to get away with not paying.

Think about the ways in which your account is tied to the outside world and then think realistically as to how much effort the government is likely to put into investigating you. If you're making $20k deposits from Coinbase frequently and that's not explained in your tax documents when you file, you're likely to be audited. They'll see Coinbase and then they may be able to get information from Coinbase to see your traffic there. In that case they'll see the funds that you transferred from Binance or another exchange. At some point, they may not get more cooperation, but there is a path in blockchain that leads from your deposits to your steemit account if regulators can get their way. Even if they cant link you all the way back to steemit, they can still get you for the deposited funds. However, if you rarely make those deposits and they're small amounts it's much less likely to be looked at.

Another more difficult way to analyze would be to check any social media or email accounts or websites they know about to see if there's any link to a steemit account there. This method is more subjective to each governments regulations. It would also require types of analysis that government's aren't known for being competent enough to perform without third party assistance.

Outside of the realm of regulation is the question of morality. Do governments have a valid claim to your crypto earnings as taxes. Well, an argument could be made that they don't! That argument could also be made in some capacity for your regular fiat earnings, but those are so transparent and regulated that you can't get away with paying them. If you can get away with not paying crypto taxes and you believe morally you shouldn't pay, it becomes a simple risk reward analysis for you to make. That's what it all boils down to for me. Whats the chance they know I have the funds and when I weigh out my moral compass is it more important to fulfill my legal obligations to my government or to keep the product of my labor that has nothing to do with government and use the funds as I deem most appropriate (or perhaps the motivation is to avoid paying because the government funds what you feel are immoral things).

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Thank you @mjo for your amazing comment. Im glad you shared your knowledge with us.

Appreciate.

I think strictly from a legal perspective, at least in most countries, they would "require" you to pay taxes on your earnings.

And now it's a difficult part: what are our earnings here? If I earn 50 SBD and some steem after my post will be publish then is it my profit?
Let's say that I've spent 40 SBD on bots. So my earning should be just 10 SBD. But how to differ "costs" from transfering funds to your friends/your other account.

That's very tricky.

Luckily my biggest asset is knowledge and many solid business contacts. Those 2 things cannot be taxed :)

yours,
Piotr

@mjo just one more thing

I've learned that you're very responsive which is absolutely great and steemit community surely will benefit by having you here.

if you would ever like to keep in touch and support each other closer, then drop me a message [email protected]. This will allow us to communicate easier.

No pressure of course,

Cheers, Piotr

Hey Piotr, sorry for the delayed response. I'm doing a little speculating here, but I think it would be something along the lines of what money you've moved out of steemit compared to what money you've invested into steemit. So, if you start a fresh account and buy/import 40 SBD into the system, then you write a post and use all 40 SBD promoting it. Then, you end up with 50 SBD and you transfer that all out of the system. I think you would be correct that the earnings would be 10 SBD.

However, if you were creating content regularly and saved up 40 SBD, then promoted a post with it and got 50 SBD upon payout. I think they would argue that both the 40 SBD you earned previously and the 10 SBD from that particular post were taxable (assuming you transfer all 50 SBD out of the system at that time).

I'm also thinking about this based on my understanding of the US tax system, could be totally different for you. I'll have to dig through more of the comments here to see if this is roughly in line with what others are saying.

thank you @mjo for taking the time to reply to my questions

I appreciate it a lot.

Yours
Piotr