Crypto

IRAs and cryptocurrency: A Guide for Digital Entrepreneurs Preparing Their Retirement – CIO Look

Published

1 year ago

October 13, 2023

IRAs and cryptocurrency: A Guide for Digital Entrepreneurs Preparing Their Retirement – CIO Look

More and more people are embracing the entrepreneurial spirit and forging ahead into the realm of freelancing and digital entrepreneurship in the modern era of technology. These digital entrepreneurs frequently confront particular difficulties in retirement planning since they have the flexibility to work according to their own terms and the possibility of endless revenue. With an emphasis on managing Individual Retirement Accounts (IRAs) and the rising use of cryptocurrencies, we will examine the complexities of retirement planning for digital entrepreneurs in this essay. We will also discuss the tax-related challenges encountered by independent contractors, such as the 1099 tax, the conversion of W2s to 1099s, the self-employed tax rate, and self-employment taxes.

Internet entrepreneurs who are planning their retirement

Being self-employed, digital entrepreneurs do not have the benefit of employer-sponsored retirement plans like 401(k)s. But, people can still use IRAs to save money for retirement. There are several popular retirement account options for independent contractors and other self-employed people, including traditional and Roth IRAs.

Traditional IRAs: Traditional IRAs enable online business owners to make pre-tax contributions, possibly reducing their taxable income for the year. Until withdrawal during retirement, the money in the account grows tax-free. The fact that conventional IRA distributions are taxed at the time of the distribution should not be overlooked.

Roth IRAs, on the other hand, are financed using after-tax funds. The growth and withdrawals from Roth IRAs are typically tax-free, despite the fact that contributions do not immediately generate tax advantages. Digital entrepreneurs who expect to be in a higher tax rate when they retire may find this to their benefit.

Retirement planning and cryptocurrencies

Digital entrepreneurs may ask how Bitcoin fits into their retirement planning strategy as it continues to gain popularity. For investors who are aware of the dangers and rewards involved, cryptocurrencies like Bitcoin or Ethereum may be a valuable asset. However because they may be extremely volatile and vulnerable to regulatory changes, it is important to approach cryptocurrency investments with prudence.

Self-Directed IRAs: Self-directed IRAs are one method by which Bitcoin may be incorporated into retirement planning by digital entrepreneurs. Individuals are able to invest in alternative assets, such as bitcoin, through self-directed IRAs while adhering to IRS regulations. Digital entrepreneurs who use self-directed IRAs may diversify their retirement investments and even profit from the rise of cryptocurrencies.
Tax Considerations: It’s important for digital businesses to be aware of the tax ramifications when investing in cryptocurrencies. When it comes to taxes, the IRS sees cryptocurrencies as property rather than money. The implication of this is that any profits or losses resulting from Bitcoin transactions would be liable to capital gains tax. To guarantee compliance with tax laws, it is recommended for digital businesses to speak with a tax expert who focuses on cryptocurrencies.

Problems Freelancers Encounter With Taxes

Although investing for retirement is an important part of maintaining financial security, freelancers have certain tax issues that can make it difficult for them to maximize their tax deductions and pay their taxes correctly. Let’s look at some of these difficulties:

Form 1099-MISC: The Form 1099-MISC that freelancers often get from their customers details their yearly earnings. Freelancers must declare their earnings and pay taxes on a quarterly basis, which is different from employees who obtain a W-2 form. For people who are inexperienced in handling their finances or are new to the world of freelancing, this might be overwhelming.
W2 to 1099 Conversion: Converting from being an employee with a W-2 form to a freelancer with a 1099 form presents another difficulty for digital businesses. This change necessitates a major adjustment in tax planning and record-keeping. Formerly handled by their employers, self-employment taxes, projected tax payments, and potential deductions are now factors that freelancers must take into account.
Self-Employed Tax Rate: Freelancers must pay self-employment taxes, which cover both the employer and employee facets of Social Security and Medicare. Unlike regular workers who only pay the employee part of taxes, this may lead to a greater tax burden. Freelancers are somewhat relieved by the fact that they can deduct the employer part of these taxes from their adjusted gross income.
Self-Employment Taxes: Freelancers must also deal with additional tax responsibilities, such as paying anticipated quarterly taxes and maintaining precise records of their company spending, in addition to self-employment taxes. Penalties and undue financial hardship may result from failure to adhere to these standards.

Conclusion

When it comes to retirement planning, digital entrepreneurs must carefully take into account a number of aspects, including the use of IRAs and the incorporation of cryptocurrency assets. Digital entrepreneurs should take proactive measures to secure their financial future by looking at the advantages of standard and Roth IRAs. In addition, optimizing tax savings and correctly paying taxes depend on a grasp of the tax issues that affect freelancers, such as the 1099 tax, W2 to 1099 conversion, self-employed tax rate, and self-employment taxes. Digital entrepreneurs may deal with these challenges and retire comfortably with the right preparation and advice from financial and tax experts.

Crypto

Experts celebrate promising new breed of cryptocurrency: 'Not only promises efficiency …'

Published

11 hours ago

January 12, 2025

Press Room

Experts celebrate promising new breed of cryptocurrency: 'Not only promises efficiency …'

An up-and-coming player in the world of cryptocurrency is looking to revolutionize the industry through its unique processes that highlight sustainability.

According to Be3, cryptocurrency XRP, developed by Ripple Labs, could have a “transformative impact on both finance and environmental sustainability” thanks to its unique consensus mechanism that does not require mining and uses a negligible amount of energy even as it scales.

It generates a minuscule amount of pollutants per transaction while producing 1,110 pounds of electronic waste and impacting just over 8 cubic miles of natural resources.

This approach separates XRP from its contemporaries, which often rely on the notoriously power-hungry proof-of-work systems and hulking mining centers that can destabilize the grid.

Statistics provided by TRG Datacenters show that XRP is the second-most eco-friendly cryptocurrency behind IOTA, consuming just 0.0079 kilowatt-hours per transaction. Comparatively, bitcoin ranks last at a staggering 707 KWh per transaction.

Furthermore, the cryptocurrency became the first major global blockchain to achieve carbon net zero by purchasing enough renewable energy to offset its minimal energy requirements, per the XRP Ledger.

Be3 also noted other features that make XRP an attractive option for institutions focused on environmental responsibility, as it takes just three to five seconds to settle at fractions of a cent per transaction.

It’s a welcome addition to a sector that desperately needs more sustainable options. A study by the International Monetary Fund found that crypto mines, in conjunction with artificial intelligence data centers, accounted for 2% of global electricity demand and 1% of carbon dioxide pollution in 2022.

The United Nations found that the bitcoin mining network used 173.42 terawatt-hours of electricity between 2020 and 2021, resulting in a carbon footprint equivalent to burning 84 billion pounds of coal.

Coal and natural gas also supplied 66% of the energy for mining operations during this period, polluting the planet with planet-warming gases.

Luckily, the sector has made significant strides in recent times in an effort to become more eco-friendly.

Alephium, which utilizes a proof-of-work blockchain, has partnered with Gigatons to implement a proof-of-less-work consensus that is significantly more energy efficient.

Meanwhile, Ethereum has transitioned to a proof-of-stake system that has cut its energy consumption by nearly 100%.

“In a world increasingly attentive to environmental impact, XRP’s innovative technology not only promises efficiency but also a greener future,” Be3 wrote.

Join our free newsletter for good news and useful tips, and don’t miss this cool list of easy ways to help yourself while helping the planet.

Crypto

ZIUM Launches to Revolutionize Instagram and Cryptocurrency Solutions

Published

23 hours ago

January 12, 2025

Press Room

ZIUM Launches to Revolutionize Instagram and Cryptocurrency Solutions

Zagreb, Croatia–(Newsfile Corp. – January 12, 2025) – ZIUM, a cutting-edge agency founded to tackle some of the most pressing challenges in social media and digital marketing, is now officially open for business. Specializing in Instagram username claims, account unbans, and cryptocurrency marketing, ZIUM has positioned itself as a trusted partner for individuals and businesses seeking innovative solutions in the digital age.

The agency operates at the intersection of technology, social media, and blockchain marketing, empowering clients to unlock their full potential online. With a dedicated team of experts and a results-driven approach, ZIUM is redefining the way people navigate the ever-changing online landscape.

ZIUM

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A New Era of Digital Problem Solving
ZIUM’s services address real-world challenges in today’s digital ecosystem. Instagram, one of the largest and most influential social platforms, has become a critical tool for personal branding, business promotion, and community engagement. However, issues such as unavailable usernames or unfair account suspensions can hinder growth and cause frustration. ZIUM steps in to provide solutions that are fast, efficient, and tailored to each client’s needs.

Additionally, ZIUM excels in cryptocurrency marketing, offering projects and startups a strategic edge in the fast-paced blockchain industry. By combining deep knowledge of crypto trends with cutting-edge marketing strategies, the agency helps blockchain projects stand out in an increasingly crowded market.

Core Services Offered by ZIUM

Instagram Username Claims
In the crowded social media space, having the perfect Instagram username can make all the difference. Whether it’s for a brand, influencer, or business, ZIUM specializes in acquiring sought-after usernames to align with clients’ goals and identities. The agency handles the process from start to finish, ensuring a smooth and hassle-free experience.
Instagram Account Unbans
Account suspensions on Instagram can be devastating, especially for businesses and influencers relying on the platform for engagement and revenue. ZIUM offers expert account recovery services, helping clients navigate Instagram’s policies to regain access to their accounts quickly and effectively.
Cryptocurrency Marketing
The cryptocurrency space is highly competitive, and visibility is key. ZIUM provides end-to-end marketing strategies tailored to blockchain projects, ensuring they reach the right audience. From brand development to targeted campaigns, ZIUM helps crypto ventures grow and thrive in an ever-evolving market.

Crypto

Donald Trump Embraces Meme Coins—A Presidential First

Published

1 day ago

January 12, 2025

Press Room

Donald Trump Embraces Meme Coins—A Presidential First

Donald Trump is making news once more, but this time it’s not for political reasons; it’s about cryptocurrency. As he prepares to return as the 47th President of the United States, Trump will become the first sitting president to own meme currencies, a decision that has stirred both enthusiasm and skepticism in the crypto community.

Trump: A Significant Crypto Portfolio

Recent sources claim that Trump’s crypto wallet consists largely of meme coins and is valued roughly $8 million. Among the assets are $1.5 million in a meme currency with Trump-themed design and $5.5 million in TROG tokens.

In addition, he has about 1.3 billion GUA coins, which amounts to nearly $400,000, and $167,000 in TRUMPIUS tokens. This is a first of its kind, where Trump becomes an oddity in the world of politics and cryptocurrency, considering his earlier reluctance towards digital assets.

DONALD J. TRUMP WILL BE THE FIRST SITTING US PRESIDENT TO HOLD MEMECOINS pic.twitter.com/ODlNXDaKIT
— Arkham (@arkham) January 10, 2025

From Skepticism To Support

Trump’s journey into the crypto world is notable. He had been a strong critic of Bitcoin and other cryptocurrencies, calling them scams. But that all changed in 2024 when he started publicly endorsing Bitcoin and speaking out for the right to own it. That’s a broader trend among politicians, who are increasingly recognizing the potential of cryptocurrencies and their growing popularity among voters.

Trump’s financial success in the digital sphere was also aided by his venture into non-fungible tokens (NFTs) on Ethereum. Trump reportedly made a good living from these endeavors, and he currently owns roughly 496.77 ETH, which is worth about $1.6 million.

BTC is currently trading at $94,144. Chart: TradingView

Implications For Regulation

Many people are eager to see how Trump’s administration will regulate cryptocurrencies now that he is back in office. A possible change toward a more advantageous regulatory climate for digital assets is hinted at by the nomination of important individuals like David Sacks as “Crypto Czar” and Paul Atkins as SEC chair. This could result in more precise rules for investors and businesses involved in the cryptocurrency industry.

Trump

Donald Trump. Image: Ronda Churchill/Reuters

The policies by Trump are already changing market dynamics as everybody is anxiously awaiting them. During this time when Bitcoin hit a record high of $108k, while meme coins surged, analysts still feel that Trump could make the year 2025 a major turning point in cryptocurrencies.

Meme Coin Boom

The rise of Trump-owned meme coins is indicative of a broader cultural shift among younger investors who are fed up with established financial institutions. This combination of the political influence of Trump and the speculative nature of meme coins puts a scenario under which political events could significantly affect cryptocurrency markets. Thus, while the investors go about this, they are not ignorant of the volatility that is usually associated with meme coins.

Featured image from Fortanix, chart from TradingView