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Education

An Open Letter to Shaun Lamp, CEO of Great Lakes Energy

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Hello Shaun,

A few months back, I got an email from GLE, which announced your new position as CEO (congrats!), along with other updates about service, fiber internet rollout, etc. One of the things I noticed in the email was that Great Lakes Energy doesn’t actually produce electricity, but buys it from a local supplier. I’m sure it’s more complex than that, but nevertheless, it got me thinking.

A couple years ago, Great Lakes Energy started a truly remarkable endeavor to provide fiber-to-the-home for all GLE members. And Truestream was born. It was, and continues to be a huge project, which I’m sure cost many millions of dollars to roll out. And as a business-class fiber customer at my farm in Brutus, I can tell you, the efforts were successful. I’m assuming there were grants and other financial resources available to you in order to help fund the connection of so many folks who otherwise had no decent options for broadband Internet service. I wonder if the same might be true for electricity… A couple days ago I got this email:

And it got me thinking. Again. What if Great Lakes Energy worked with its members, and facilitated the installation of solar and/or wind generation at the individual homes? Many of us are in rural locations, and have the space to install systems that would not only offset carbon emissions, but with grid-tying, you could buy some of the electricity you provide from your own people.

I’m not saying this without understanding many complexities exist. While solar installations would certainly help with the issue presented in the email, solar power is timed very poorly for energy needs in the winter. This is exacerbated by our eventual need to move away from burning fossil fuels to heat our homes. If we all use electric heat pumps (which, we totally should, and almost certainly will eventually), the demand for electricity will increase at night when the sun is not helping produce any power at all.

Good Point, We Should Forget the Whole Thing…

But see that’s where Great Lakes Energy could really help blaze a trail. Who better to solve the issues of energy production, distribution, storage, and independence than an electrical CO/OP who has already proven their ability to think big, and actually follow through? There will always be people like me, who have an off-grid inverter setup, with a battery bank in order to make it through potential downtimes. And less nerdy versions of me who have a standby generator in case things go sideways. But those solutions are very self-focused, and if we want to be leaders, we need to work together as the CO/OP we are. There are so many things individuals like myself can’t do alone. But a huge part of those challenges are just another Tuesday for you. Things like:

  • Testing, approving, and possibly bulk purchasing hardware for grid tied inverters, solar panels, and mounting hardware that will work well, work safely, and provide people with the appropriate hardware for their needs and/or desires.
  • Working with local government entities to provide clear, simple guidelines, and when local governments are unwilling to cooperate, shine light on the issue so that progress doesn’t die in a pile of paperwork.
  • Work with installers, either hiring, contracting, or at the very least facilitating reputable professionals connecting with members.
  • Work with folks like myself, who are passionate about such things, to educate and even help people find the line between DIY and professional installations. What can we do on our own? What should we? What shouldn’t we?

Heh, Yeah, We Already Do That

Well… about that. Yes, you have multiple programs. Three that I’m aware of, kinda. Two of them seem like the same thing worded differently. But they’re not nearly the same level of active participation as the fiber Internet initiative. Let’s talk about them, purposefully from my viewpoint, because I suspect I’m more aware of these things than most folks, and much less aware than you.

Community Solar. This appears to be a partnership with a 3rd party organization, Spartan Solar. You sort of “adopt a panel”, which is installed and maintained in a solar farm by the Spartan Solar folks. You pay for a panel, and get credited by the energy it produces. I’m certain those credits are based on averages and percentages, and are reduced by maintenance cost and financial solvency, etc, etc. On paper, this is very likely the absolute best way to implement solar in the most efficient way possible.

The problem is, it’s just a line item on a piece of paper. And apart from an abstract good feeling, there aren’t any real benefits to the end user. If your power goes out, your adopted solar panel doesn’t know, doesn’t care, and will not keep your cellphone charged so you can watch netflix during the ice storm. I suspect the interest in Community Solar isn’t zero, but also isn’t earth shattering. It’s just moving numbers on a monthly bill. If we’re going to change the world, it needs to feel real.

When you produce power on your roof, and you can see graphs of output and usage, things change. If you want to see someone get radical about energy savings, show them the data. Not abstract kilowatt hours of monthly usage, but daily watts produced and stored vs watts used. The reason people don’t take climate change seriously is they don’t experience it first hand, at least not in a way that feels real and addressable. Am I suggesting we gamify our electrical usage? YES! Members connected reliably to the Internet with fiber only makes that more possible. If people realize it takes a dozen huge solar panels in full sunlight to run their air conditioning, it becomes a tangible reason to add insulation and get better windows.

Net-Metering and Buy-All/Sell-All. From what I can tell by reading the PDF files (which were clearly written by lawyers), this is the ability for a limited number of members to pay extra for a smart meter, and then sell back excess energy they produce. This is great, truly. That said, I have no idea if the 10MW limit specified in the document has been reached, or if the program is still available. I also don’t have any idea how much extra members need to pay for smart meters to facilitate the process. And most importantly, the “how-to” bit is not only confusing, but intimidating and pretty much unattainable without lots of professional investment.

Such things are complicated, and intimidating. I get it. When you add governmental regulations, both local and regional, it’s a non-starter for the vast majority of folks. Even myself. But like I mentioned above, these regulations and interoperability with governments are what you do every day. What if there were a group of local installers, electricians, buying cooperatives (ahem, GLE), and people who know the intricacies of rolling out real community-based initiatives? What if you could show graphs on your website of the percentage of power purchased from members vs from a 3rd party? What if a farmer with a south-facing clearing could install enough solar panels to make a bit of income each month while supplying all their own power/heating/cooling needs?

OK, Sure, But That’s Not a Plan.

Right. My hope is that we can make it easier for people to install things like solar. This will require several things:

  • Education. This is the part I can actually help accomplish. Remember when I was one of the first folks to get fiber Internet installed, and y’all took pictures, etc? (It’s ok if you don’t remember, you weren’t there personally) Let’s expand that idea. Let’s highlight various solar/wind/battery/inverter installations members have in place, or plan to put in place. I’m an educator who is comfortable making video. Let’s show people what’s possible!
  • Easy Access. Most people I know with solar installations got the hardware and labor as part of a contract, which makes their payment and saved electrical usage just about a wash. That requires capital, and I would bet there are governmental grants to help facilitate such things. I’m really nerdy, and really into this stuff. Yet I have no idea how to get something like a solar panel system installed. That’s partially on me, but it points to a bigger problem: No one knows what is possible, much less how to accomplish it.
  • Incentive. It needs to be sexy. There is so much more we need to do than just putting solar panels on houses. But getting people to be active participants in the energy conversation seems like a really good first step. This is mostly marketing, but wouldn’t it be great to have an actionable alternative to the rolling blackouts mentioned in the email above? “Use less power” is an admirable goal, but long term it’s not sustainable. The future will be powered by electricity, and being proactive about scaling our power needs before garages are filled with electric vehicles seems like an even more admirable goal!

I truly can’t think of any other entity more poised to lead the way toward a cleaner, more self-sufficient nation. Once we are more actively involved with producing electricity, and owning the process — things like transitioning away from propane furnaces become a much easier conversation. But the first step is to get people interested in having the conversation. And making everyone an active part of the process seems like a good way to start.

So drop me a line, Shaun. Let’s change the world, starting in one of the most unlikely places — our own backyards.

Significance

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Last night I had the opportunity to speak for Linux Dominicana, which is the Linux Users Group in the Dominican Republic. I was approached several months ago by a man who has since become a good friend, asking if I would give a webinar-based talk. As most people reading this know, I’m currently trying to produce more and more content, and hopefully reach more and more people with it. So even though I had concerns over cultural errors I might make, I agreed to do the talk.

Spoiler: I’m very glad I did.

My whole personal “brand” thing about being kind, assuming the best in others, admitting when I’m wrong, etc., is not so much a “brand” as genuinely who I want to be as a human. And so in the months leading up to the talk, a bunch of the leaders joined me in a group chat so I could ask them an annoying amount of questions. I was not worried about embarrassing myself (clearly, based on most of my public interactions, I have no problem looking silly). But I was very concerned that I would make an offensive comment, or make an assumption out of ignorance that would hurt the feelings those attending. I gave my rough talk outline (it was about Linux as a vehicle to a career), and I asked awkward questions about job opportunities, difficulties with language barriers, salary inequalities, and how things “work” in the Dominican Republic.

This group of folks were so patient, and so kind, my gratitude doesn’t seem like enough payment for all the education they provided me. After a couple months of trying to learn Spanish, it was clear I wouldn’t be anywhere close to capable of conversation in their native language, and still they were nothing but patient with my litany of questions. Honestly, I was probably rather annoying. And even though I learned a lot about Dominican people, and even about Latin America in general — the upcoming talk was more distressing than pretty much any other talk I’ve given. (OK, the Ohio LinuxFest keynote address where I lost my entire presentation the night before was pretty stressful, but this was a different sort of stress.)

See… I wasn’t sure I’d be relatable. Don’t get me wrong, human stories are about humans, and in general we can empathize if we try. But would my life experiences translate (literally and figuratively) to another culture? I normally weave sarcasm and self deprecation into my talks, but sarcasm is often hard to pick up in your native language, so my standard go-to would probably fall flat. Plus, my talk wasn’t really about anything technical. It was a story about how I found my passion, and how those passions helped me in my own career. It was a very “soft” talk for a group of hardened IT professionals.

How did it go? I think the talk went fine. (That link will start the talk when it switches to English) It wasn’t earth-shattering. It was a story-based look at my career, with a few pointers for finding passion of your own. And an awkward section about the unfair importance of speaking English. Again, it wasn’t a bad talk. But it wasn’t amazing by any stretch of the definition.

But it was significant.

What I didn’t mention earlier is that this was the first time they’ve had one of their presentations in English. I was even one of the first (maybe the actual first) presenter without a tie to the Dominican Republic at all. Heck, I’m so white I’m almost clear! They did this on purpose, but I didn’t realize it was that out of the ordinary until I was chatting with the group of leaders the day before the talk. Whether or not my talk went well, they assured me it was ground-breaking. Assuming the attendees enjoyed the talk, it probably means they will have future speakers from other places with different views and different insights. And I got to be the first person to open that door. I’m still so very humbled.

I hope my mediocre talk, where I tried to speak more slowly than normal (I talk fast when I get excited) was enough to tear down a few cultural walls. The kindness of commenters, saying things in English so I could understand it, was really quite touching. This group of Dominicans will always have a special place in my heart. And once winter sets in, I might find out if their offers of helping me get the most out of a trip to the DR were genuine. And to be honest, I already know they were. Because along with being the first English-only speaker to their group, I also made a pretty great group of friends. And that. That is how we change the world.

Interns, and College, and Certs. Oh My.

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I do not have a college degree.

I think it’s important to lead with that, because while I’ve built a fairly successful career, I’ve done it without actually attaining a degree of any sort. I did attend college — a major university for 2 years, and a community college for a year. But in all that time (and all that debt), I never managed to piece together a degree.

Part of the problem is that like most college students, I changed my major multiple times. I started as an Electrical Engineer major. They seemed to make a lot of money, and, if I’m honest, that’s about all the thought I put into it. Then, in Calculus 3, I decided Electrical Engineers did things with numbers that just didn’t need to be done. I was also a Technical Writing major, and English major, and once I shifted to the community college, a “Liberal Arts” major. (I still don’t know what that actually means)

Don’t get me wrong, even though I didn’t get a degree, my college experience did actually help me significantly. I found myself skipping engineering classes at Michigan Tech, and hanging out in the computer labs all day (and night). There was a brand new NeXT computer lab, and it make Unix sexy. In fact, it was probably partially that time in a terminal window when I was supposed to be in engineering classes that made me fall in love with Unix/Linux.

Should I go to College?

This is question I get a lot. A lot a lot. It’s also a question I’m very hesitant to answer. Because the answer is a resounding maybe, and that’s not what anyone wants to hear. Another problem with the question is that the answer keeps changing. For example, back in 2012, I was asked this question at CBT Nuggets, and colleges were just starting to offer more than C++ programming as their only Computer Science class. Here was my response then:

This is still solid advice (well, as solid as advice from me gets anyway), but if anything, the college angle has gotten more attractive. Yes, education lags behind the cutting edge, but if you go into a university computer science program today, you’ll actually get a well rounded education on networking, operating systems, and actual useful programming languages. That still doesn’t mean it’s the right answer for everyone though, because college is very expensive, and you might be served better with a combination of certification programs, internships, and just plain old experience. When I was college-aged, there simply were no computer networking classes. Now there are, but there are also plenty of vocational programs that teach networking as well.

When I was college-aged, there simply were no computer networking classes. Now there are…

Let’s focus on my area of expertise; sourdough bread. No, just kidding, my technical specialty is Linux. And it’s an area that continues to attract more and more employers. Linux Insider posted an article during the pandemic pointing out the need for Linux-savvy workers, even as the industry moves away from traditional servers and hosts everything in the cloud. (Because guess what makes the cloud run? Yep. Linux.) And while colleges certainly offer Linux classes, they’re still lagging way behind current needs when it comes to employable skills. If you get your college degree, you’re still going to need to get certifications to not only prove your worth — but also to fill in the gaps dated college curriculum offers.

So College is a Waste?

Again, maybe. Here’s the thing, college does a couple things really, really well:

  • Teaches foundational knowledge that makes for better equipped professionals
  • Is structured in a way to teach a well-rounded educational base, wider than the specific topic of study
  • Gives students an opportunity to see if they like a variety of subjects (remember my Electrical Engineer “career”?)
  • Looks really good on a resume

And that last one is a real kicker. The current hiring process is largely automated at the early stages. Many employers use a college degree as a litmus test to determine whether or not to even interview a candidate. A college degree shows that a person has the stamina and hard work to achieve a difficult goal. Even if it doesn’t prove they’ll be a good employee, it’s often the first hurdle to even getting an interview. I personally think that’s sad, but I’m sure it’s a statistically viable way to sort the wheat from the chaff. Unfortunately, companies miss out on some really good folks who chose a different path.

I won’t lie, having a college degree does open doors, especially when applying for a job. It’s not the only way to get hired, but it’s important to judge if the cost and years spend getting educated at a university is worth it. It might be, especially if someone else is helping pay the bill. But going into $100k of debt will take a lot of years to pay off, even if you land a great job.

So What Else Is There?

This is where it’s much better to do what I say, and not what I did. When I left college, I started a small business. It failed miserably. (Like, really bad. It was ugly.) From there I got a tech support job at the local community college answering phones giving support to dialup Internet users. My experience in the computer labs at Michigan Tech, and my experience as a “small business owner” gave me enough resume fodder to get an interview. From there, after a series of very unfortunate events, I applied at a K12 school district for the technology director position. I shouldn’t have gotten that job, but I wrote a very compelling cover letter, and interviewed well. I also got very lucky. Getting lucky isn’t something you can prepare for, but all is not lost if you don’t go to college.

If you decide not to go to college, or at least not head off to university for a 4 year degree, there are a couple viable alternatives that will make you employable (even if it makes it tough to get past the automated resume filters):

  • Get an Associate’s degree at a community college.
  • Study on your own and get tech certifications from places like CompTIA, LPI, Cisco, Microsoft, etc.
  • Apply for an internship. If you can afford it, unpaid internships are an easy way to get experience.
  • Apply for an internship. Lots of interns get paid, if crappy. More on this later.
  • Get involved with some Open Source projects, especially if development is what you want to do.
  • Create an online presence. Certainly GitHub for developers, but also YouTube, Twitter, and LinkedIn.

I know this was the “no college” list, but a couple years at a community college is probably affordable, especially if you can stay home and commute. Having a degree, even an Associate’s degree, will open some doors. Even if your major is Underwater Basket-Weaving — just having the paper will potentially get you an interview.

Internships are incredible. They can be at a college, or a business in the field you’re interested in. They come in two flavors: Regular and crappy. Seriously though, some internships are unpaid. It’s the pre-employment equivalent of doing work for the exposure. It sucks. But, if there aren’t any other options, it’s a viable way to get your foot in the door and get some serious experience on your resume. There are many companies who pay their interns though, so don’t assume you’ll have to work for free. You’ll probably make a pittance, but it might be enough if you can still live at home, or have lots of roommates.

Lastly, the old adage is that nothing beats experience. That’s still true, especially if you can get to the actual interview process. An internship is incredible to put on a resume, but if you contribute to projects on GitHub (even documentation! EVERY project needs documentation!), or have projects of your own, that counts. And if a YouTube channel seems like a silly thing to start in order to get a job — I assure you, if you get to the interview stage, interviewers will check out your YouTube channel before they interview you. Same with blogging, tweeting, facebooking, linked-inning, etc. Put yourself in the hiring committee’s shoes, if they can “see” you before they actually see you, they’ll likely do so. Just be genuine, and it will be like an extended interview that you don’t have to sweat through!

You Avoided the Question Entirely

Yeah, I know. That’s what I meant at the start — it’s all maybe. Rather than a one-size-fits-all answer, hopefully this has given you a bit of insight to help you think through what will work best for you. Some of the ideas are valid regardless of your decision on college. All those bullet points above will make you more employable, and a better tech nerd in general. Getting involved in the community you’re interested in will only help make connections that might get you a job. Most of my “best” jobs have been because I knew someone who knew someone who saw my stuff. Good luck, and whatever your future looks like, I encourage you to seek after something you enjoy. If you don’t like calculus, don’t be an electrical engineer. Trust me.

Cryptocurrency and the IRS

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[NOTE: This is a piece I wrote for Linux Journal a few years back. It’s still very relevant, and still important information for anyone dabbling in crypto. This seems like a good time of year to repost it.]

One for you, one for me, and 0.15366BTC for Uncle Sam.

When people ask me about bitcoin, it’s usually because someone told them about my days as an early miner. I had thousands of bitcoin, and I sold them for around a dollar each. At the time, it was awesome, but looking back—well you can do the math. I’ve been mining and trading with cryptocurrency ever since it was invented, but it’s only over the past few years that I’ve been concerned about taxes.

In the beginning, no one knew how to handle the tax implications of bitcoin. In fact, that was one of the favorite aspects of the idea for most folks. It wasn’t “money”, so it couldn’t be taxed. We could start an entire societal revolution without government oversight! Those times have changed, and now the government (at least here in the US) very much does expect to get taxes on cryptocurrency gains. And you know what? It’s very, very complicated, and few tax professionals know how to handle it.

What Is Taxable?

Cryptocurrencies (bitcoin, litecoin, ethereum and any of the 10,000 other altcoins) are taxed based on the “gains” you make with them. (Often in this article I mention bitcoin specifically, but the rules are the same for all cryptocurrency.) Gains are considered income, and income is taxed. What sorts of things are considered gains? Tons. Here are a few examples:

  • Mining.
  • Selling bitcoin for cash.
  • Trading one crypto coin for another on an exchange.
  • Buying something directly with bitcoin.

The frustrating part about taxes and cryptocurrency is that every transaction must be calculated. See, with cash transactions, a dollar is always worth a dollar (according to the government, let’s not get into a discussion about fiat currency). But with cryptocurrency, at any given moment, the coin is worth a certain amount of dollars. Since we’re taxed on dollars, that variance must be tracked so we are sure to report how much “money” we had to spend.

It gets even more complicated, because we’re taxed on the same bitcoin over and over. It’s not “double dipping”, because the taxes are only on the gains and losses that occurred between transactions. It’s not unfair, but it’s insanely complex. Let’s look at the life of a bitcoin from the moment it’s mined. For simplicity’s sake, let’s say it took exactly one day to mine one bitcoin:

1) After 24 hours of mining, I receive 1BTC. The market price for bitcoin that day was $1,000 per BTC. It took me $100 worth of electricity that day to mine (yes, I need to track the electrical usage if I want to deduct it as a loss).

Taxable income for day 1: $900.

2) The next day, I trade the bitcoin for ethereum on an exchange. The cost of bitcoin on this day is $1,500. The cost of ethereum on this day is $150. Since the value of my 1 bitcoin has increased since I mined it, when I make the trade on the exchange, I have to claim the increase in price as income. I now own 10 ethereum, but because of the bitcoin value increase, I now have more income. There are no deductions for electricity, because I already had the bitcoin; I’m just paying the capital gains on the price increase.

Taxable income for day 2: $500.

3) The next day, the price of ethereum skyrockets to $300, and the price of bitcoin plummets to $1,000. I decide to trade my 10 ethereum for 3BTC. When I got my ethereum, they were worth $1,500, but when I just traded them for BTC, they were worth $3,000. So I made $1,500 worth of profit.

Taxable income for day 3: $1,500.

4) Finally, on the 4th day, even though the price is only $1,200, I decide to sell my bitcoin for cash. I have 3BTC, so I get $3,600 in cash. Looking back, when I got those 3BTC, they were worth $1,000 each, so that means I’ve made another $600 profit.

Taxable income for day 4: $600.

It might seem unfair to be taxed over and over on the same initial investment, but if you break down what’s happening, it’s clear we’re only getting taxed on price increases. If the price drops and then we sell, our taxable income is negative for that, and it’s a deduction. If you have to pay a lot in taxes on bitcoin, it means you’ve made a lot of money with bitcoin!

Exceptions?

There are a few exceptions to the rules—well, they’re not really exceptions, but more clarifications. Since we’re taxed only on gains, it’s important to think through the life of your bitcoin. For example:

  1. Employer paying in bitcoin: I work for a company that will pay me in bitcoin if I desire. Rather than a check going into my bank account, every two weeks a bitcoin deposit goes into my wallet. I need to track the initial cost of the bitcoin as I receive it, but usually employers will send you the “after taxes” amount. That means the bitcoin you receive already has been taxed. You still need to track what it’s worth on the day you receive it in order to determine gain/loss when you eventually spend it, but the initial total has most likely already been taxed. (Check with your employer to be sure though.)
  2. Moving bitcoin from one wallet to another: this is actually a tougher question and is something worth talking about with your tax professional. Let’s say you move your bitcoin from a BitPay wallet to your fancy new Trezor hardware wallet. Do you need to count the gains/losses since the time it was initially put into your BitPay wallet? Regardless of what you and your tax professional decide, you’re not going to “lose” either way. If you decide to report the gain/loss, your cost basis for that bitcoin changes to the current date and price. If you don’t count a gain/loss, you stick to the initial cost basis from the deposit into the BitPay wallet.

The moral of the story here is to find a tax professional comfortable with cryptocurrency.

Accounting Complications

If you’re a finance person, terms like FIFO and LIFO make perfect sense to you. (FIFO = First In First Out, and LIFO = Last In First Out.) Although it’s certainly easy to understand, it wasn’t something I’d considered before the world of bitcoin. Here’s an example of how they differ:

  • Day 1: buy 1BTC for $100.
  • Day 2: buy 1BTC for $500.
  • Day 3: buy 1BTC for $1,000.
  • Day 4: buy 1BTC for $10,000.
  • Day 5: sell 1BTC for $12,000.

If I use FIFO to determine my gains and losses, when I sell the 1BTC on day 5, I have to claim a capital gain of $11,900. That’s considered taxable income. However, if I use LIFO to determine the gains and losses, when I sell the 1BTC on day 5, I have to claim only $2,000 worth of capital gains. The question is basically “which BTC am I selling?”

There are other accounting methods too, but FIFO and LIFO are the most common, and they should be okay to use with the IRS. Please note, however, that you can’t mix and match FIFO/LIFO. You need to pick one and stick with it. In fact, if you change the method from year to year, you need to change the method officially with the IRS, which is another task for your tax professional.

The Long and Short of It

Another complication when it comes to calculating taxes doesn’t have to do with gains or losses, but rather the types of gains and losses. Specifically, if you have an asset (such as bitcoin) for longer than a year before you sell it, it’s considered a long-term gain. That income is taxed at a lower rate than if you sell it within the first year of ownership. With bitcoin, it can be complicated if you move the currency from wallet to wallet. But if you can show you’ve had the bitcoin for more than a year, it’s very much worth the effort, because the long-term gain tax is significantly lower.

This was a big factor in my decision on whether to cash in ethereum or bitcoin for a large purchase I made this year. I had the bitcoin in a wallet, but it didn’t “age” as bitcoin for a full year. The ethereum had just been sitting in my Coinbase account for 13 months. I ended up saving significant money by selling the ethereum instead of a comparable amount of bitcoin, even though the capital gain amount might have been similar. The difference in long-term and short-term tax rates are significant enough that it’s worth waiting to sell if you can.

Overwhelmed?

If you’ve made only a couple transactions during the past year, it almost can be fun to figure out your gains/losses. If you’re like me, however, and you try to purchase things with bitcoin at every possible opportunity, it can become overwhelming fast. The first thing I want to stress is that it’s important to talk to someone who is familiar with cryptocurrency and taxes. This article wasn’t intended to prepare you for handling the tax forms yourself, but rather to show why you might need professional help!

Unfortunately, if you live in a remote rural area like I do, finding a tax professional who is familiar with bitcoin can be tough—or potentially impossible. The good news is that the IRS is handling cryptocurrency like any other capital gain/loss, so with the proper help, any good tax person should be able to get through it. FIFO, LIFO, cost basis and terms like those aren’t specific to bitcoin. The parts that are specific to bitcoin can be complicated, but there is an incredible resource online that will help.

If you head over to BitcoinTaxes (Figure 1), you’ll find an incredible website designed for bitcoin and crypto enthusiasts. I think there is a free offering for folks with just a handful of transactions, but for $29, I was able to use the site to track every single cryptocurrency transaction I made throughout the year. BitcoinTaxes has some incredible features:

  • Automatically calculates rates based on historical market prices.
  • Tracks gains/losses including long-term/short-term ramifications.
  • Handles purchases made with bitcoin individually and determines gains/losses per transaction (Figure 2).
  • Supports multiple accounting methods (FIFO/LIFO).
  • Integrates with online exchanges/wallets to pull data.
  • Creates tax forms.

The last bullet point is really awesome. The intricacies of bitcoin and taxes are complicated, but the BitcoinTaxes site can fill out the forms for you. Once you’re entered all your information, you can print the tax forms so you can deliver them to your tax professional. The process for determining what goes on the forms might be unfamiliar to many tax preparers, but the forms you get from BitcoinTaxes are standard IRS tax forms, which the tax pro will fully understand.

Figure 1. The BitcoinTaxes site makes calculating tax burdens far less burdensome.

Figure 2. If you do the math, you can see the price of bitcoin was drastically different for each transaction.

Do you need to pay $29 in order to calculate all your cryptocurrency tax information properly? Certainly not. But for me, the site saved me so many hours of labor that it was well worth it. Plus, while I’m a pretty smart guy, the BitcoinTaxes site was designed with the sole purpose of calculating tax information. It’s nice to have that expertise on hand.

My parting advice is please take taxes seriously—especially this year. The IRS has been working hard to get information from companies like Coinbase regarding taxpayer’s gains/losses. In fact, Coinbase was required to give the IRS financial records on 14,355 of its users. Granted, those accounts are only people who have more than $20,000 worth of transactions, but it’s just the first step. Reporting things properly now will make life far less stressful down the road. And remember, if you have a ton of taxes to pay for your cryptocurrency, that means you made even more money in profit. It doesn’t make paying the IRS any more fun, but it helps make the sore spot in your wallet hurt a little less.

In Which I Make a Fool of Myself for a Good Cause

by

Tomorrow is it. With all my crazy health problems of late, I haven’t done anywhere close to the fundraising I hoped to do, but regardless — tomorrow I’ll be golfing 50 holes. Again due to the health stuff, I haven’t been to a driving range, so my first golf swing attempt will be on the course tomorrow. Yikes. 🙂

What am I golfing for exactly? I’m glad you asked, even if you really didn’t. Hehehhe.

  • Harbor Light Christian Schools is an independent, non-denominational school. It shares a name and building with a church, but is not actually a church ministry. It’s completely separate.
  • I’ve seen HLCS transform my kids. In a good way. Yes, it provides a Christian education as one would expect, but it does so much more that I honestly never expected:
    • It’s given my kids a safe place to learn who they are. No bullying. No ostracizing for being “weird”. No judgement based on background.
    • Even with a district size of under 100 students (K-12!), my girls have all played multiple sports, competing successfully with schools 10 times their size. Heck, Lizzie (a 7th grader) made a double play the other day on the varsity softball team against a school at LEAST 10 times their size.
    • The student/teacher ratio is such that teachers form a personal, sincere, and direct relationship with the kids. This means students can’t get away with fluffing off, because the teacher will follow through with contacting parents and arranging extra help if needed.
    • It’s also shocking for me to see families of drastically different Christian denominations not only exist together, but excel in making each other better Christians, and better people. In fact, the differences at Harbor Light are one of the biggest strengths. When we learn to get along and agree on commonalities, it helps everyone relate to the rest of the world better. Getting rid of the “us/them” mindset is so healthy, and it happens every day.

 

But tuition is so, so expensive for a private school. Even in our economically depressed area of northern Michigan, it’s not uncommon for tuition prices for Christian schools to hover around the $10,000 per year range. While in other parts of the country that is a paltry amount to pay for tuition at a private school, up here, it makes it unreachable for the majority of families.

And so, golf.

Harbor Light does an incredible amount of fundraising. So much so, that for a top notch, parochial education, the base tuition is reduced to around $5,600 per student. PLUS, there are incentives (half off for the first year, things like that), scholarships, and tuition forgiveness that takes place every year. No one gets rich educating students at Harbor Light Christian School, but student’s lives are enriched beyond measure.

I could go on and on about the specific things HLCS does to benefit the community and world, but I’ll save that for another day. Giving families the ability to provide their children with a top notch academic education, while at the same time teaching them to exist peacefully and productively around others of differing world views is priceless. So, I agreed to participate in this golf marathon. My goal is/was to raise $1,500 to offset tuition prices next year. Again, due to my recent health concerns, I haven’t been able to beat the bushes for support, which is very unfortunate. If you’d like to contribute, even a small amount, I would be grateful. If you’re unable to contribute financially, please either pray for HLCS, or at the very least ponder how amazing it is to raise a generation of young Christians who understand how to get along with people of varying faith systems.

Here’s a link to my contribution page if you’re interested in donating. Thanks for reading. 🙂