

Ask HN: Accepting Bitcoin for freelance work - wylie

I'm a web developer, just starting my freelance career, and I want to know if there are any legal or tax reasons that would prevent me from accepting bitcoin as a form of payment.
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gabestein
I've been writing about Bitcoin for a while, so I'd definitely be interested
to know where you end up on this. Please get in touch with me if you end up
accepting payment in Bitcoin.

As for advice: consult your lawyer and accountant. The truth is Bitcoin is a
huge grey area. There are some folks who think Bitcoin is an investment
vehicle like gold or silver and should be reported as capital gains income.

[http://qz.com/72637/why-bitcoin-millionaires-could-
accidenta...](http://qz.com/72637/why-bitcoin-millionaires-could-accidentally-
become-tax-felons/)

And there are others who would say that because you're using it as a form of
payment, you should report it as regular income, probably in the same way you
would income earned in a foreign currency.

[http://www.businessinsider.com/do-you-have-to-pay-taxes-
on-b...](http://www.businessinsider.com/do-you-have-to-pay-taxes-on-
bitcoins-2013-4)

Either way, you will need to report income in Bitcoin to your country's tax
authority in some way or risk prosecution. Again, if you end up pursuing it,
I'd be very interested in hearing the story.

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wylie
Thank you for the links. The first step is to find a client who would pay via
Bitcoin, but I figure if businesses can accept Bitcoin then so can I.

I will definitely update you if I go through with it.

~~~
gabestein
You're quite welcome. Here's another one I found while thinking about your
question:

[http://blog.bitinstant.com/blog/2012/11/12/bitcoin-and-
taxes...](http://blog.bitinstant.com/blog/2012/11/12/bitcoin-and-taxes-not-
that-complicated.html)

Good luck, and thanks in advance for keeping in touch.

EDIT: Actually, that's not the one I was thinking of, although it's not bad.
This is the more informative one:

[http://www.dailydot.com/business/how-to-declare-bitcoins-
tax...](http://www.dailydot.com/business/how-to-declare-bitcoins-taxes/)

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sidmitra
Right now the main factor before everything else would be the volatility of
BTC. If you have an hourly rate, how do you convert it to BTC considering the
values goes up(and down) in solid percentage points and during the course of a
single day. So if you're up for the risk, then try it out.

But personally i don't see any benefits over just asking for money in USD(or
whatever currency) over paypal.

~~~
wylie
I would consider offering a discount of sorts when paying via bitcoin, or
setting a fixed conversion rate (right now something like $120 per BTC has
been fairly stable).

But I agree, there's nothing to prevent me from accepting the money via normal
means, and simply buying my own bitcoins.

~~~
Donito
120$/BTC hasn't been fairly stable. Just a few days ago it was at 70.

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willdcat2121
The government will get their money. Pay now or pay HUGE penalites, fines +
years of interest. Anyone who thinks the government wont control this is
CRAZY. I am longtime buisnessman and know how the IRS and Government work.
Lets not mention going to jail for trying to avoid taxes.

~~~
chris_dcosta
I work with multiple currencies in the real world. However the earnings are
made, they are always _accounted for_ in the currency of the company.

If you publicly acknowledge that you are accepting bitcoin as payment, beware
that you will have to account for it's value on the day of the transaction.
This means that if a person buys a pair of shoes at $50 and you hadn't
adjusted your own exchange rate in line with the market for that date, you
could end up recording more $ or less $ for that sale, and you pay tax a % of
your profit on that sale.

A freelancer however could, in theory, conduct their business entirely out of
the public gaze, but that would also entail your customer playing the game. If
at least one half of the transaction's address is known, then the other can be
found out in the blockchain. It won't identify you specifically in the
transaction, but your customer may be forced to disclose who they were paying.

