Why You Need A Corporation If You Are Involved In Cryptocurrency.
Spread the love
The recent IRS rulings declaring cryptocurrency to be property but nevertheless subject to income tax as well as the roughly 15% Self Employment and Medicare tax for individual traders and miners, the use of a corporation for the purposes of both mining and trading has become an important necessity for such operations to remain viable.
Here is why; if you are mining for yourself, whether solo or through a pool, the proceeds of your mining are subject to income tax, possibly as high as 28% or more, depending on your tax bracket. In all cases the cash value of cyrpto mined will be subject to about 15% Self Employment and Medicare tax which means that without the use of the corporate model, you could owe as much as 43% of your earnings before you even get the cash in hand!
If you mine using a corporation the corporation is not subject to Self Employment tax on its earnings! Depending on how you run your corporation, the corporation may owe income tax but any amount owed may be reduced siginificantly through the use of proper deductions in the form of expenses charged to the corporation.
Remember also, that corporations use pre-tax money to work with; when the corporation buys hardware, software, services, office supplies or any other expense item, the purchases are made with un-taxed money! The corporation itself is taxed ONLY on its profits and the more expenses the ecorporation has, the less taxable profit it will show!
You personally will only be taxed on the amount of money that the corporation pays you for services which can reduce your tax liability significantly!
Our corporations offer an additional layer of security because of the way we handle the transactions.
Here is how it works:
(1) Receive your payment.
(2) Register a legal Kansas corporation, installing our officers and incorporator.
(3) Obtain the Federal Employer Identification Number (EIN) if this option has been chosen.
(4) Sell you the newly established corporation (Our officers except for the Registered Agent) then resign, at which point we either email or ship you all corporate documents, depending on your preferred method.
(5) You then install your own officers and prodeed to do business!
Since this is a private transaction and no registration of the transaction is required, essentially no one knows who actually owns the corporation for one year until the time of renewal.
The EIN is not tied to a social security number but rather to the corporation, providing you with yet another level of privacy.
In short, in light of the recent IRS rulings, you cannot go wrong with our service and one of our corporations.
Hit us up to get your corporation onw!
Thanks for looking!