It sounds like your wife is a self-employed independent contractor. (However, she might be an employee, depending on the relationship between her and the company and the level of operational and financial control that the company exerts over her.) assuming she is self-employed, then she would file like any other person who works as side gig, such as mowing, lawns, or driving for a service. She reports all of her gross income on schedule C. She can deduct ordinary and necessary, business expenses, if she has any. she pays income tax and self-employment tax on the net profit. Depending on the amount of income, she earns during the year, she may be required to pay quarterly estimated tax payments to avoid an underpayment penalty at the end of the year.
I don’t know why you are suggesting that her income would be reported under your Social Security number. Her income belongs to her and is filed on a schedule C under her Social Security number. If you file a joint tax return, then her schedule C is combined with your W-2, and any other information, but her schedule C is reported under her Social Security number.
She is required to keep accurate records showing her own business income and expenses even if the employer doesn’t issue a tax form. The employer is required to issue a 109 –NEC if it pays her more than $600 during the year. I have a suspicion that they aren’t going to do this, (they may be acting illegally, depending on whether they are a US or off shore company), but even if they don’t issue a 1099, your wife is required to report and pay tax on all of her own income from her own accurate records.
Your wife’s income is reported based on the US dollar conversion value on the day the income is paid. If she was paid weekly or monthly, you would use the conversion value on the date the funds are transferred. If she is paid daily, then you report the wages on a daily basis. Your wife will want to keep a spreadsheet that lists the amount of cryptocurrency she has paid each day, that days, conversion rate, and that days US dollar value. The total US dollar value for the whole year is her gross self-employment income.
Her gross income is the US dollar value on the day she is paid (in cryptocurrency), even if she does not convert to US currency on the same day. if she holds the cryptocurrency for any length of time, and converts to US currency at a higher or lower conversion rate than when she was paid, this creates a separate capital gains or capital loss transaction, which is reported on schedule D.
