I started posting on Hive in 2021, which is a blogging service that pays you for your posts in crypto. How do I report this income? I didn't sell any, just holding it.

Because you received this crypto for writing blog posts, it is reported as self-employment income. 

 

You are supposed to report the value at the time you received the crypto as your "earnings". Later when you sell or convert the crypto, your basis will be the amount you reported as taxable income. 

 

To report your self-employment in TurboTax Online:

1. Select Federal on the left side menu.
2. Under  Wages & Income, find Self-employment income and expenses.
3. Select Start/Edit to the right.
4. Work your way through the section to report your earnings and any related expenses. 

 

If you are using TurboTax Deluxe Desktop (from a disc or download), you can enter self-employment income here:

1. Open your return and select the Federal Taxes tab.
2. Select Wages and Income on the second tier of tabs.
3. Select I'll choose what I work on, on the right.
4. Scroll down to Business Items near the bottom of the list.
5. Find Business Income and Expenses (Sch C), click Start to the right.
6. Answer the first question Yes.
7. You will be asked to upgrade, but you can select Continue in TurboTax Deluxe.
8. Enter your business income and any relevant expenses on the screens that follow.

Thanks for the answer, Julie.

 

Please let me restate so I can confirm I understand correctly. 

 

So I will take these monthly amounts I have for crypto paid, look up the value of the crypto for the specific month, convert it to dollars, then add up all these figures for my yearly income with this blogging service?

 

That seems easy enough. I assume I should then save this spreadsheet with all the conversions just in case I need it later. 

 

I don't quite understand this: "Later when you sell or convert the crypto, your basis will be the amount you reported as taxable income. "

 

What is a "basis"? Forgive me for a silly question. I have never sold crypto before so I don't know. So then in the future, if I convert/sell this crypto I will report both a "basis" value (which is what the dollar value was when I made it?) and presumably a "trade" value, being the value of it when I sell/exchange. Is that correct?

@JulieS described it well because you understood the greater part of it.

 

Yes, you will add up the Crypto that you earned each month and convert it into US dollars.  You correctly stated that this is your yearly income.

 

Yes, please save the spreadsheet.  It is critical if the IRS asks any questions.

 

The statement "Later when you sell or convert the crypto, your basis will be the amount you reported as taxable income. " means that after you've converted the cryptocurrency value into dollars, you can use that value as the amount you paid for it if you sell, trade, exchange or spend it.  

 

In finance, basis is generally used to refer to the expenses or total costs of an investment. The "basis" can be deducted from the proceeds value (the amount you sold it for)  when you get rid of it.  This will reduce your tax.