So since coinbase reports they will send you something like everyone else does?I don’t know if Nicehash reports anything to the IRS. They aren’t US based, but that doesn’t mean they or others don’t. That’s one reason why I think it’s not worth it to try to hide it. Bitcoin is not anonymous. It’s difficult to trace but it’s not impossible. The open ledger records EVERY transaction and balance. IP history is a thing, and after a few transactions it’s generally regarded that your account info could be start being linked to an owner. Most of the exchanges that have KYC (know your customer) have to report to the IRS.
alternatives to reporting your cryoto earnings would be spending it on gift cards, look at gyft. Selling it on the forum, or exchanging for goods. Many places take crypto and BTC as payment. Newegg. Microsoft, etc. if you want to convert it to USD on an exchange without tax implications you’ll have to pick a non US based exchange that doesn’t have KYC and then use VPN, and anonymous e-mails and such. That’s a lot of hassle, and then the exchanges are less safe IMO.
I file my taxes with crypto as “hobby mining”. I have to list mining dispersements as additional income, and pay taxes on it as regular income. When I sell it, if it’s been longer than 1 year, then I will have to pay long term capital gains on it, which is 10% currently. (Just like stocks).
I think the US taxes are rubbish and unfair — especially in the crypto space. Not like the US government does ANYTHING to benefit you with cryoto. If I had a Bitcoin stolen and told the police or government they’d tell me to go pound sand — so not sure why they get to tax it — But you’ll have to find your own way here and weigh the risks of reporting or not. Dont try to claim expenses as a mining business as a all time operation because your taxes get way more complicated, you’ll have to pay self-employment tax and social security tax and all that nonsense. If you want to claim expenses, in my opinion, you’d best be mining as an occupation. I’m no tax lawyer though and the usual disclaimers apply.