Since the inception of human beings, man has always found a way to survive in order to deal with the surroundings one encounters. After all, this life is nothing but the survival of the fittest and for that to happen, to be the fittest of all mankind, one has to work hard in this regard. In olden times, man used to survive with the help of tools and weapons he created out of brass or wood. Fast forward to the 21st century, an entire world of cryptocurrency is where all the magic happens. Forget about arms and weaponry, the one who has the most wealth is regarded irrespective of wherever he belongs. If one got money, he got all the wonders of the world.
Ever heard of the barter system? If not, let me tell you what it means. The barter system is a system used to exchange goods with other important items in order to trade and survive. People did not have any money to buy or sell rather they traded goods with goods. But now, the world works on money. The crypto money, to be precise. Currencies like Bitcoin, Pi, Doge, and Ethereum are all forms of cryptocurrencies that have taken over the market by storm. Our main concern for today is Bitcoin.
In simple words, Bitcoin is a digital or you can say a virtual currency you can own and do any sort of transactions with it. The money is stored in a digital wallet or an app and each transaction that you perform gets recorded in a list that can be seen by the public. This list is basically termed as a “blockchain”. There is only one teensy bit problem, if you cash your bitcoins out, you are compelled to pay the taxes that come with it too. In order to avoid huge sums of taxes, www.advfn.com is here to help and aid you in this regard. This website will answer all your queries related to bitcoin transactions, mining, and cashouts. Your answers are a single click away!
Down below are the top 7 ways for you to cash your bitcoins out without paying any taxes:
Table of Contents
1. Invest in a tax-free country:
Moving to a tax-free country is probably one of the best ways to avoid paying taxes while cashing out your bitcoins. Fortunately, to your luck, there are a number of countries and states that offer minimum and low-income taxes. If you have the right qualification, skills, and money to move to such a place where taxes are minimal, you definitely should give this thought a shot. Of course, you get to pay on a federal level but you get offered to pay as little as possible to the treasury of the state.
2. Wait until short term gains turn into long term gains:
Another way to avoid paying taxes while debiting the bitcoins is to hold your cryptocurrency till the point where your short-term gains get developed into long-term gains. This game is for people who have higher levels of patience. Say if you bought some cryptocurrency and you cash it out in a small amount of time like 2 3 months, you’re going to pay loads of taxes. But if you wait for a year, stick to it, and perform no debiting, end results will bear fruit. It has been said that when a user clings onto his bitcoin money for more than a year, odds are that he is less likely to pay more taxes than the ones who debit bitcoins more often.
3. Giving away in a low-income year:
This method has also been proved quite vital in this regard. It does not matter if you have a long-term gain or a short-term gain, if you sell out in a low-income year, you are going to pay as little tax as possible due to the fact that the year is already of low income. If you sell out in a high-income year, you will pay high taxes. The less the income, the less the tax and vice-versa.
4. Send some cryptocurrency to a family member:
Again, this method is also beneficial if you want to reduce the huge loads of taxations when cashing your bitcoins out. The International Revenue Service (IRS) allows a user to gift $15,000 per year. In this way, you can lower your tax rates by gifting some bitcoins to your loved ones. The user who transfers the money will have to pay less tax when the relevant bitcoin amount money gets sold by its new owner.
5. Renounce your U.S. Citizenship:
This is probably one of the most boldest steps you could take in order to escape the taxations. If you own U.S Citizenship, you are bound to pay the taxes to the IRS no matter what the circumstances are or where you live. The only way to get rid of them is to step back from your U.S. Citizenship. If you are willing to leave your citizenship, if you have a second passport and if you are up for this bold step, then and only then you can opt for this method. Otherwise, things might turn out the bad way. You can be eligible for a 0% tax rate on short as well as long-term gains in a place like Puerto Rico.
6. Donate the cryptocurrency to charity:
If you donate a handsome amount of your bitcoin currency to charity, odds are that you would then have to pay fewer taxes. There will be no capital gains tax and if you claim on your tax return, it can also be the cause of an important tax deduction.
7. Spend on tax-free gold:
Tax-free gold is another crucial investment if you want to avoid paying taxes while rolling the money out. First of all, gold is new in the market when it comes to trading and now certain investors are offering to trade bitcoins with tax-free gold. This is a great opportunity for people who are in pursuit of avoiding taxes while rolling bitcoins out.
Therefore, we can rightly deduce from the above-stated facts that all it needs is some effort and patience if you really want to devise a solution for your problems!