Bitcoin Prices Could Make Paying Taxes in Bitcoin Even More Attractive

He is the author of numerous tax books and writes frequently about taxes for Forbes, Tax Notes and other publications.

If you owe taxes and the crypto market is up, how about paying them in bitcoin?

In at least one American state, paying tax in bitcoin is a reality.

In Ohio, you can now make state tax payments in bitcoin.

The transfer of the crypto to the tax man is a sale, and that could mean more taxes for the year of the payment.

Remember, California taxes ordinary income and capital gain at the same high tax rates.

So even capital gain does not save you tax money in California, except for being able to apply your basis.

If you actually tax in crypto, or sell crypto to pay tax in dollars, you still have taxes to pay - because of your tax payment.

You could trigger a tax loss too, if you had bought the crypto for $7,000 and transfer it for taxes when it is worth $5,000.

If you are paying independent contractors with crypto, how do you report it? As with other payments to independent contractors, payers engaged in a business must issue IRS Form 1099.