Scenario 2 is still the worst pick in this current phase where we are transitioning from a legacy system to a new one. I, for example, have half of my income in FIAT and half in bitcoin paid directly in bitcoin at the exchange rate of the payday
This is also an interesting loophole for companies that can declare a lower salary, thus paying less taxes
I believe companies get a tax write-off for employee salaries as operating expendetures (OPEX). Paying a lower salary is still good for a business though (and bad for employees), just not because of tax reasons.
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This is also an interesting loophole for companies that can declare a lower salary, thus paying less taxes
I'm not sure I follow. Are you referring to the bitcoin component being "off the books" (like how some pay "under the table" in cash?)
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Because otherwise, even if bitcoin-denominated, the employer still needs to do compute the fiat value for determining the income tax withholding, and unemployment tax, and Social security, and such.
Oh,... I just realized something. Agreeing to pay a Bitcoin-denominated salary can really make things complicated for doing this with a W-2 employee. In addition to paying the salary the employer also has an employer paid-taxes, for social security and medicare, as well as unemployment taxes. So if the BTC/USD exchange rate rises, the employer's tax payment will rise as well. The employer not only needs to hedge for the salary but for the resultant employer-paid taxes as well!!
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