Bitcoin as a wage to workers
Good afternoon everyone, today I would like to talk about wages for workers. Would you believe if someday in the near future where in bitcoins and other altcoins can be a source of wages for the workers? Is it good or is it bad for you?
For me, that was an innovative way of paying employees because there would be no more tax cuts plus there is a possibility of going high in value in case the workers will hold it. There maybe fluctuations but the time will always correct it and make it a nice and awesome savings for the workers too. The moment they received their wages, they have already an investment that grows. They could even do staking method to earn interest on their altcoins.
If people are being paid as wages, there will still need to be withholding and employment taxes paid on these earnings. If you are holding as an investment, taxes will need to be paid on the earnings as well, once they are cashed in.
Maybe or maybe not I think because there could be business owners discretion of wages or bonuses to their employees I think. Well maybe the taxes will be paid in fiat while cryptos for workers if they want it.
It's an interesting option. However, the possibility for major moves upward and downward exist, and that is why many financial institutions and employers stay away from using crypto-currency payments right now. They need to have safety of payments and can't risk huge drops overnight or some kind of hack.
I do think that paying workers in crypto-currency is a good thing overall for individual liberty. But I think that in order to preserve wealth you need a broader view that includes various asset classes such as gold or silver in your physical possession.
Yup, and it could be a headache for those needing to have money the next day and the price of bitcoin drops. Well opposing to that will be happy if the price rises.
In the US, the IRS has already begun to address this.
First, there are tax consequences of Bitcoin. While the IRS does not count it as FIAT (Currency) it is "Property of Value" and it is taxed accordingly.
As a "wage" in the United States you could not give someone Bitcoin or another Cryptocurrency, however you can pay an independent contractor in terms of an "exchange of like value" meaning the work performed is paid for using the agreed upon property exchange.
On the side of the payor there is no direct consequence as you are trading 1 for 1 (Cryptocurrency for labor), however the payee would be responsible for reporting a receipt of property at it's then current value (on the day received) and paying tax on the USD equivalent (barring any losses).
It actually gets much more complicated than that and requires the advice of a tax professional for any amount over $600 US.