How To Cash Out Bitcoin In Usa

2020 tax guide: crypto and Bitcoin in the U.S. Did you buy, sell, use, or trade crypto? If so, you may owe taxes if you’re a US taxpayer. Here’s a look at what that could mean, the steps you may have to take, forms you’ll need, and how gains and losses may affect your taxes. The first way to get cash for Bitcoin, and avoid taxes, would be a private exchange off the books. All you have to do is find someone who can bring enough cash and is willing to do it without KYC / ID. But in many countries this is of course a form of tax evasion and not advisable.

1. How To Change Bitcoins Into Cash
2. How To Cash Out Bitcoin In Usa Right Now
3. How To Cash Out Bitcoin In Us
4. How To Cash Out Bitcoin In Usa Now
5. Where To Buy Bitcoin Cash

Even though Bitcoin transactions aren’t nearly as anonymous as everyone hoped, there are still several ways how you can convert your Bitcoin funds to USD cash while keeping your identity hidden to a considerable extent.

Are you looking to cash out your Bitcoin?

LocalBitcoins is the best way to exchange Bitcoin to cash. You can make the exchange anonymously with private and experienced sellers. And in some areas, it might be the only way to exchange Bitcoin where exchanges are not available. Get started here.

Trade Locally Using LocalBitcoins

LocalBitcoins is a Finland-based service that facilitates the over-the-counter trading of local currency in exchange for Bitcoins. The service allows you to trade Bitcoins in 15,650 cities and 248 countries around the world, and all that’s required from you to use it is a simple account registration and verification, which can be completed in just a few minutes.

LocalBitcoins displays advertisements from users, who state exchange rates and payment methods for buying or selling Bitcoins. Other users may reply to these advertisements and negotiate the terms of trade. LocalBitcoins acts as an intermediary, providing an escrow and conflict-resolution service, in addition to the platform itself.

Most local trades using LocalBitcoins happen in larger cities. Two LocalBitcoin users agree on a meeting place and a time for the trade to occur and typically use a smartphone Bitcoin wallet to perform the transaction itself. LocalBitcoins has its Android app, which is a must-have for any local trading.

Withdraw Cash from Bitcoin ATM Near You

There is a growing number of Bitcoin ATMs, which are Internet-connected machines that allow people to exchange Bitcoins for cash, and vice versa. Bitcoin ATMs can be typically found in high-traffic areas, such as shopping malls or train stations.

The Bitcoin ATM Map app from CoinATMRadar allows you to find all Bitcoin ATMs near you quickly. It even lists all the cryptocurrencies each ATM supports as well as its address, fees, limits, and sometimes even pictures and other useful information.

Just keep in mind that Bitcoin ATMs usually charge very high transaction fees. It’s not unheard of to pay more than $50 in fees alone for a single transaction performed using a Bitcoin ATM.

Spend It or Buy Gift Cards

Thousands of retailers and services around the world accept Bitcoins, including such giants as Amazon and Overstock.com. If you’re willing to jump through a few hoops, you could purchase some high-demand items, for example, the Samsung Galaxy S8 Edge or the iPhone 8 Plus, with your Bitcoins and then sell the item on eBay for cash.

Read our previous article for more recommendations of Bitcoin-friendly stores, including Gyft, which provides a great way how to buy gift cards online for retailers like Amazon, Starbucks, and iTunes with Bitcoins.

Best way: Coinbase/GDAX

Coinbase is a very popular digital currency exchange headquartered in San Francisco. Coinbase users can trade Bitcoin, Bitcoin Cash, Ethereum, and Litecoin with fiat currencies in 32 countries. Because Coinbase complies with the Bank Secrecy Act, which prevents money laundering, it requires its users to go through a simple verification process.

As such, Coinbase isn’t anonymous, but it is reliable and trustworthy. What’s more, the exchange offers a fantastic app for Android and iOS, which has even become onf of the most downloaded app in the Apple App Store.

Are you looking to cash out your Bitcoin?

LocalBitcoins is the best way to exchange Bitcoin to cash. You can make the exchange anonymously with private and experienced sellers. And in some areas, it might be the only way to exchange Bitcoin where exchanges are not available. Get started here.

Article Contents:

Everyone dreams of what it would have been like to invest early in Bitcoin. They would be rich now. They could exchange their Bitcoin into fiat money and buy whatever they desire and live a free live.

For some this has pretty much become reality. But before you actually hold the money in your hands, there is the barrier of the ideal cash out. Where and how to perform the exchange – What’s the best way to get money for your Bitcoin asset?

The exchange from Bitcoin into fiat money is a topic you should know something about before you actually perform it. Because depending on from which country you come or in which form you exactly want to pay out, there are details to consider. Otherwise you risk to lose a sizable part of your asset in the form of taxes, for instance.

Known and trusted Exchanges for Bitcoin into Fiat Money:

Currencies:

Withdrawal Methods

Bank Transfers

Particularities:

Fees:

Currencies:

Withdrawal Methods

Bank Transfers

Particularities:

Fees:

Currencies:

Withdrawal Methods

• bank transfer
• Credit Card
• AdvCash
• Payeer
• Perfect Money
• Qiwi
• ElecsNet
• EX-Code
• Yandex

Bank Transfers

Particularities:

Fees:

• USD:
• 0% CryptoCapital
• 0.2% EX-CODE
• 1.45% AdvCAsh
• 0.5% Payeer
• EUR:
• SEPA: €50
• 0% CryptoCapital
• 0.2% EX-CODE
• RUB:
• Varying Fees

Currencies:

Withdrawal Methods

• Bank transfer,
• Credit Card
• Debit Card
• EPS
• Giropay
• Neteller
• Skrill
• iDeal
• Zimpler

Bank Transfers

Particularities:

Fees:

Currencies:

Withdrawal Methods

Bank Transfers

Particularities:

Fees:

Currencies:

Withdrawal Methods

Bank Transfers

Particularities:

Fees:

Currencies:

Withdrawal Methods:

Bank Transfers:

Particularities:

Fees:

Sell Bitcoin Tax Free

The country you come from plays a big role when it comes to deciding how best to cash out Bitcoin, especially if you want to pay out larger amounts. If you live in Germany, then the payment is tax-free if you sell Bitcoin more than one year after purchase.

If you buy Bitcoin and sell it within one year, taxes will be due, in full according to the personal progressive tax rate (income tax). So the capital gains tax does not apply – contrary to what many people suspect. Depending on the amount paid out, it can therefore happen that the maximum income tax rate applies: about 43%.

In the USA for instance, selling Bitcoin always triggers a taxable event, no matter how much time there was between the purchase and the sale. However, time matters when it comes to the amount of taxes you have to pay:

If less than 1 year has passed since you bought Bitcoin, you have to pay short-term capital gain taxes on the disposal. If more than 1 year has passed, long-term capital gain taxes are due. In both cases the tax can be quite substantial and those affected likely wonder if there might be a way around these levies.

Bitcoin Taxes in the USA:

Short-term capital gains tax: falls into income tax, like additional income, so is subject to the individual income tax rate
Long-term capital gains tax: Depending on income class, 0 – 20%.

How To Change Bitcoins Into Cash

How To Get Cash for your Bitcoin without paying Taxes?

If you sell Bitcoin on a cryptocurrency exchange and then have the money paid out, this is always a taxable event (e.g. USA, Germany, others). Whether by bank transfer, credit card or Paypal, there is a transaction that is visible and on which taxes may be due. Thus, the way over an exchange, from which you get money paid out, is probably not what you seek.

Cash out Bitcoin anonymously?

The first way to get cash for Bitcoin, and avoid taxes, would be a private exchange off the books. All you have to do is find someone who can bring enough cash and is willing to do it without KYC / ID. But in many countries this is of course a form of tax evasion and not advisable. Besides, the biggest challenge would be to find someone like that.

The peer-to-peer exchange platform localbitcoins.com is a place where you can exchange BTC into cash in principle, but without an ID-verified account (i.e. anonymously) this is only possible with relatively small sums.

Leave your Country and cash out Bitcoin abroad

One option is to leave your country permanently and cash out your Bitcoin in another country afterwards. If Bitcoin has made you rich, this can be a realistic option. In principle, it’s possible to live as a nomad without fixed residency, as an earth resident so to say.

In this case of a state-independent existence you wouldn’t be taxed anywhere. Provided you’re never too long in one place. In each country there is a certain period of residence from when you become taxable. Normally there is a tax liability starting from half a year residency. Therefore, 3 different locations per year would already be sufficient if you’d spread the time equally, in case you’re not too much into traveling.. 4 months maximum at a place should be save.

The situation is different for US Americans: they have to give up their US passport in order to lose their tax liability. Tax liability in the USA is linked to citizenship. Citizenship means passport.

Today, however, there are simple methods to get another quality passport. Especially if you have money. So you can buy citizenship in places like Grenada, Antigua & Barbuda, Dominica, St. Kitts and Nevis or even Russia. Surely there are others. Depending on the sums involved, living nomadic could be an interesting solution, at least for some time.

How to cash out a bigger amount of BTC without making major mistakes you might regret later?

Cash for Bitcoin – Here’s perhaps the Smartest Option:

A much more tricky solution to get cash against Bitcoin are Bitcoin Loans. This means that you would take out a loan with a financial service provider for which you deposit Bitcoin as a pledge.

So you get a certain amount of money against Bitcoin, and you don’t have to pay tax on this money, because it is a loan. Your BTC only move temporarily from your custody to the custody of the loan company, and in the end you get it back.

A Bitcoin loan in a bull market is particularly advantageous if the BTC price at the end of the loan is significantly higher than at the beginning of the loan. Then one would have the possibility of refinancing the first loan with a smaller amount of BTC. In a bull market, you may already be able to get a portion of your BTC back during the loan term, depending on how far the price would have risen.

Find out more about Bitcoin backed Loans.

Sell Bitcoin for Cash

If you are sure that the loan path is not the right one for you, and you definitely want to convert Bitcoin to USD or whatever fiat currency, the following questions arise.

Are you sure you want to pay out a large amount of Bitcoin at once?

Maybe one part will do now and the rest can follow later? For example, it would be possible to calculate how much Bitcoin you can cash out per year without paying taxes, or just a small amount. The sticking point here would be to avoid the 20% tax. If you pay out a fortune of millions at once, however, a corresponding levy will certainly be unavoidable (except for BTC loans!). This whole consideration of course only makes sense if you’re bullish on Bitcoin. If you don’t think that Bitcoin will go further up long term, then there’s no question why you would want to sell all at once.

Sell Bitcoin for USD and withdraw the Money to your Bank Account

If the sale on a cryptocurrency exchange should come into question, you can use a big bitcoin exchange allowing fiat money withdrawals. The biggest and most trusted ones are in the comparison table at the beginning of this page.

Depending on the trading amount and income class, a taxable event can occur at the time of the sale on an exchange. Whether this is the case and how much it is, should therefore be calculated IN ADVANCE in order not to be surprised by a tax payment you may not be able to pay. In particular, if you want to cash out the Bitcoin to invest the money immediately into another project, the necessary cash flow may be missing as soon as the tax payment is required.

This is exactly the problem many people had in 2018, after they had sold BTC at a high rate in late 2017. The money they had received for selling their BTC was no longer available when the tax was due. And their other savings weren’t sufficient. This is a problem you should urgently avoid.

This is where the Bitcoin Loans come into their own again, as a solution to this problem, since you don’t need to pay taxes on borrowed money / debt.

Cash Out Bitcoin on the Street

ATM Withdrawals

There are generally 2 different ways to withdraw Fiat money from an ATM against Bitcoin. The first is to use one of the few Bitcoin ATM that already exist at some places. If you’re lucky one might be nearby to your place. The other way is to use a normal ATM with a Bitcoin debit card. There are several Bitcoin card providers – actually there are a lot, but the majority are scammers, so you need to make sure you take one of the good ones.

1. ATM Withdrawal with Bitcoin Debit Cards

To our knowledge, the following card providers are reputable and no scams. However, we recommend do your own research about them.

2. BITCOIN ATM Withdrawal

How To Cash Out Bitcoin In Usa Right Now

Since couple of years there are special Bitcoin ATMs where you can exchange money for Bitcoin or vice versa on the street. In New York City there are already about 150 Bitcoin ATMs right now. Money can be deposited into these machines to buy Bitcoins. Occasionally it is also possible to sell Bitcoins at these ATMs to cash out money.

On the coinatmradar.com site you can find current Bitcoin ATM locations. In addition the map shows at which ATMs you can only buy BTC and which machines also offer fiat money cash outs against Bitcoin. But it is noticeable: There are a total of 4,726 Bitcoin machines in 77 countries (May 2019).

How To Cash Out Bitcoin In Us

We do not recommend to use such machines to buy Bitcoins. This is sometimes much easier and better via crypto exchanges. In addition, you would have to bring a lot of cash with you to the machine. That shouldn’t be worth it. Also, you hardly have an overview of whether you are currently buying at a good or a bad price. Also the fees are not yet foreseeable.

To withdraw money, by selling Bitcoins and getting paid Fiat money, the machines are probably be more suitable. They simply offer another way to withdraw money. Little seems to speak against that, a weak point is, however, that you can’t see in the ATM whether you’re about to sell for a good price or not. Many people certainly know a similar problem from abroad when withdrawing a foreign currency. So Bitcoin machines are quite nice, but in the future they would have to develop further and offer more functions and low fees in order to actually assert themselves.

Sell Bitcoin – No Cash Out

What if you sell Bitcoin but don’t cash it out (so you won’t send the money to your bank account) ?

How To Cash Out Bitcoin In Usa Now

The moment you exchange Bitcoin for a Fiat currency, a taxable event occurs. Even if you don’t have the money paid out to your bank account. In principle, at this point, you own the money, whether it is on the exchange or on your bank account is a detail that really doesn’t matter. So you have to be aware that you always have to pay taxes on the sale. The event will also not be undone if you reinvest the entire amount immediately. However, before the next tax return, all individual trades are offset against each other (profits against losses), and the final amount is entered into the tax declaration.

Where To Buy Bitcoin Cash

That’s why you have to keep an exact record of all individual Bitcoin trades. But this is usually no problem, since this data should be stored in the Trading History of your exchange platform or broker.