Mining Tax Calculator
Hobby or Business? Know Your Tax Liability
Mining Income
Your Tax Rates
Tax Summary
Hobby vs Business Mining
- Income reported on Schedule 1
- No expense deductions (post-2018)
- No self-employment tax
- Cannot depreciate equipment
- Simpler reporting
- Income on Schedule C
- Full expense deductions
- 15.3% self-employment tax
- Section 179 / depreciation
- Home office deduction possible
Mining Tax FAQ
How do I know if I'm hobby or business?
IRS looks at: profit motive, time spent, expertise, success history. Mining full-time or with significant investment? Likely business.
When exactly is mining income taxable?
When you receive it - the moment coins hit your wallet or pool pays out. Not when you sell.
Can I deduct my $5,000 ASIC?
Business miners: yes, via Section 179 (immediate) or 5-year depreciation. Hobby miners: no deduction.
What about electricity costs?
Business: fully deductible. Track your mining rig's wattage and calculate the portion of your bill. Keep records.
Pool mining vs solo - different taxes?
Same tax treatment. Pool just pays more frequently in smaller amounts. Track each payout's value.
I mined at a loss - any benefit?
Business miners can deduct losses against other income. Hobby losses can't offset anything - you still pay tax on coins mined.
What records should I keep?
Date mined, coin amount, FMV at mining, wallet/pool records. For business: all expense receipts, equipment purchases.
GPU mining multiple coins - how to track?
Each coin is separate income. Sum up FMV at receipt for each. Software like NiceHash provides reports.
Do I form an LLC for mining?
Not required but can provide liability protection. Doesn't change tax treatment - still Schedule C for single-member LLC.
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