Are Earnings from Cryptocurrency Mining Subject to Taxes?
The article by Delton Rhodes was originally published at CoinCentral.com. https://coincentral.com/are-earnings-from-cryptocurrency-mining-subject-to-taxes
Due to the rapid growth of cryptocurrency, government agencies around the world are placing more concrete taxes on cryptocurrency mining. Prior to the 2017 tax year, gains made from mining or trading cryptocurrency were operating in a vague area. The IRS has issued guidance that clarifies how it treats these gains and how taxpayers have to report them. This upcoming tax year, anyone making a profit from cryptocurrency mining will be subject to income taxation regardless of the size of the mining operation. In the United States, there are two methods to report gains from cryptocurrency mining. The first option is to report earnings from mining as self-employment income and income tax. This option allows a miner to deduct expenses related to the mining operation. The other way to report earnings from mining as “other income” on Line 21 of your 1040. This method will limit the deductions you can take as compared to the self-employment method. Read more about the taxation of cryptocurrency mining operations HERE.