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.

Star Trek Me This

A while back I posted a poll on Twitter about which Star Trek technology would be the most significant. Usually when I bring the topic up in conversation, people jokingly say the Holodeck, and then say, “But seriously, warp drive is the most significant tech.” I generally argue that the replicator is the most overlooked tech in Star Trek, because its invention would solve world hunger, put manufacturing centuries ahead, and make scarcity a thing of the past. I was pleasantly surprised to see that on Twitter, most folks think along the same lines.

But, I want to elaborate a bit on the items, because sometimes I have more than 280 characters of thought on a topic. 🙂

Holodeck

The holodeck got little love on Twitter, and I understand. It seems the most frivolous of the items listed. In reality, the Holodeck is the one we’re probably the closest to actually having. It’s basically VR to the Nth degree. There are obvious differences, what with actual physical interactions and all, but VR is like a poor man’s Holodeck, and we can try it out today.

The use cases for an actual Holodeck are pretty incredible though, to be honest. The show generally stresses its usage as a vacation simulation, which would be important on interstellar trips. But the training, learning, physical fitness, and full immersion would make life better in so many ways.

That said, I think we all know, most Holodeck use cases would devolve into sexual deviance pretty quickly. Maybe that’s good, maybe that’s bad, I’m not here to judge. The takeaway though is that a Holodeck could do more than just entertain us. It could level the playing field for everyone such that privilege of wealth and/or location wouldn’t matter as much.

Transporter

There was some discussion on Twitter about whether the transporter was its own tech, or whether the replicator and the transporter were really the same thing, since the technologies are closely related. But since I was specifically referring to the transporter as a “mover of objects and people”, that’s what I’ll focus on here.

Quite frankly, the transporter tech creeps me out the most. The notion of converting mass into energy and then that energy back into mass seems fine for chairs and pepperoni pizzas, but for a living thing — it’s oogy. This is a trope in the Star Trek universe of course, what if people are “recreated” twice. What if the “pattern degrades” in the buffer. But I’m more concerned about what makes a person a person. When an object (or lifeform) is converted into the stream of energy, their existence is nothing more than a record of what they used to be. If you then rebuild them into that same record, are they the same person? Is there a spark of life that is more than matter/energy? Is there a soul?

Deep stuff, I know. But the transporter has always bothered me in Star Trek. And while I don’t want to get into a big philosophical debate about souls and the meat they may or may not inhabit — if the transporter idea for living things doesn’t creep you out, I’m a little worried about you.

Warp Drive

Arguably the most exciting Trek tech, it’s oddly the one that would probably affect humanity the least. Well, at least initially. With things like hunger, inequality, and scarcity eliminated, Warp Drive would allow for exploration without the sole purpose of exploitation. That would be amazing. But as a “first” tech? Yeah, I’ll pass. I don’t want to solve our energy problems by drilling for oil on a remote planet. That’s just putting the cart before the horse.

Obviously cool tech from a scientific standpoint. And not outside of the realm of “maybe someday something like what it sorta implies” — so I’m not anti-WarpDrive. I’m just not in the, “We need Warp Drive first” camp.

I already talked about the replicator, and why I think that would be the most important and civilization changing tech. But something that didn’t even make my list has gotten me thinking a lot lately…

Universal Translator

This is probably the most practical tech from a, “could we ever actually do it” standpoint. Not with the whiz-bang features of learning and deciphering an unknown language in near real-time, but as a way for people to communicate with each other regardless of their native tongue. Language barriers are more than just inconvenient. When we can’t communicate readily with someone, it changes how we see them. Being self aware enough to realize that our differences are insignificant when compared to our similarities helps — but when we can’t communicate, relationships break down.

When someone doesn’t speak our language fluently, we perceive them as less intelligent (even if we don’t speak THEIR language AT ALL). When we can’t express our intentions to each other clearly, it creates a mental us/them separation that bleeds into every other aspect of our relationship. When we can’t understand each other, we can easily dehumanize each other. And that road leads to the darkest of darkness. If we can’t communicate with people, we can’t get to know them. And if we don’t know people who are unlike us, it limits who WE are as a part of humanity.

There’s a much larger topic about diversity, inclusivity, and expanding our views of “us” — but this was just a post about Star Trek technology. So I’ll save the other stuff for another episode. 🙂

Interns, and College, and Certs. Oh My.

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.

Unlimited Local Storage for $12 per Month. Really.

I have a 48TB NAS in my basement. Granted, thanks to RAID6 I only (only!) have 36TB of usable space, but still, I assumed that would last me forever. Thanks to ripping DVDs and Blurays, I was so very, very wrong. Rather than spend a few thousand dollars on a new NAS, however, I decided to host my files in the cloud. The storage is unlimited for $12/month, and after 6 months or so, I can tell you it’s a viable alternative to local storage. Plus, it mounts exactly like a local NAS!

The Service

There are plenty of cloud-based storage solutions available, but they are all either very limited in storage space, or very expensive per GB. There is one solution, however, that provides unlimited storage for a set monthly price. Google Drive.

Officially, in order to get unlimited storage, you must get a Business Gsuite with 5 users. Each user is $12/month, and so you’d have to pay $60/month to get unlimited storage. Honestly, $60 a month for that much space is still insanely affordable — but if you open a Business Gsuite account with a single user (so only $12/mo), you still get unlimited storage. It might seem like an error Google would quickly fix, but it’s been that way for years. I’m currently using more than 40TB of space on my Google Drive, and only have a single user on my Gsuite for Business.

The Problem

Google Drive is nice, but let’s be honest, no one wants to use their web interface as bulk storage. It’s clumsy, slow, and as much as I love Google, the organization is confusing at best. Google does provide “Google Drive Stream”, but due to local caching, you still need local storage or you get “not enough space” errors.

Thankfully, Rclone makes direct access to Google Drive seamless. It allows you to create access via keypair (no annoying logging in all the time), and even lets you mount your remote share on your local filesystem. And in true Steve Jobs “one more thing” fashion, it also allows you to encrypt files and directories in real time, so your privacy is protected even if your data is stored on someone else’s hard drive. It’s seriously amazing. And Rclone? Open Source and totally free!

The Process

Rclone is in most Linux distributions, and even has Windows and OSX versions available that all work similarly. In this video, I show you how to quickly set up a share and mount it on the local filesystem. If it seems too good to be true, yeah, I get that. But I’ve been using it for months and I’ve been more than impressed. It’s been reliable, and robust enough to support a handful of users reading and writing at the same time.

You can do a bit of extra work to create your own application API, which will make the performance more robust. It doesn’t cost any extra money, but it’s admittedly a bit of confusing clicking.

The Training?

You probably know I create training for a living. I have more in-depth training on rclone over at CBT Nuggets. If you’re already a subscriber, you can go to https://snar.co/cbt-rclone to get to the skill directly.

If you’re not yet a subscriber at CBT Nuggets, you can see my Everything Linux course overview, which includes my rclone skill and many others. Feel free to sign up for a free trial if you want to view my training. https://snar.co/cbt-everythinglinux

(This isn’t a creepy bait and switch — the free video above really does walk you through the process. There’s just more capability if you’re interested in diving in deeper, and want to check out my professional DayJob training!)

Cryptocurrency and the IRS

[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.