Two Ways to Own Bitcoin
Only one lets you deduct the cost.
- Full market price with after-tax dollars
- No depreciation. You get no deductions.
- No business expense offset
- Custodial risk on third-party platforms
- Capital gains tax when you sell
- Deduct 100% of hardware cost in Year 1
- Power and hosting are business expenses
- Management fees reduce taxable income
- BTC goes straight to your wallet
- Lower effective cost per coin acquired
Three Bitcoin Mining Tax Deductions Every LLC Owner Should Know
Mining hardware qualifies as a depreciable business asset, which means the IRS lets you deduct the cost. Three mechanisms make that work.
Deduct 100% of Hardware in Year 1
Section 179 and 100% bonus depreciation (restored permanently by the One Big Beautiful Bill Act, July 2025) both let your LLC write off the full cost of ASIC mining hardware the year it is placed in service u2014 up to $2,560,000 for 2026. A $150,000 deployment at a 35% effective rate saves roughly $52,500 in taxes. Read the full breakdown.
Cut Self-Employment Tax by Thousands
Mining income through a standard LLC gets hit with 15.3% self-employment tax on top of income tax. An S-Corp election splits your income into salary and distributions — only the salary gets taxed at that rate. On $100K of mining profit, that can save $10K or more. See how the S-Corp strategy works.
Power, Hosting, and Fees Are Deductible
Every dollar your LLC spends on electricity, hosting, and management fees is an ordinary business expense. These deductions reduce your taxable income beyond just the hardware write-off.
Watch Out: Passive Activity Rules
The IRS may classify your mining losses as “passive” if you don’t meet material participation requirements. That means your depreciation deduction could be blocked from offsetting your W-2 or other business income. This is fixable with the right entity structure, but it needs to be addressed before you deploy capital. Learn how passive activity rules affect miners.
Tax treatment depends on your situation. Consult your CPA before making depreciation or deduction decisions.
You Own the Bitcoin.
We Handle Everything Else.
You stay focused on your business while we run the mining operation — you get the tax deductions without dealing with hardware, facilities, or firmware.
You own depreciable hardware
You purchase ASIC miners, they sit in our facility, and they depreciate on your books under Section 179. Your CPA claims the deduction and you own the asset outright.
Zero operational burden
We source hardware, deploy it, monitor it around the clock, and optimize performance. You get a monthly report — that’s the full extent of your involvement.
Lower cost per BTC acquired
After Section 179, operating expense deductions, and the 3% management fee, your effective cost to acquire Bitcoin is materially lower than buying on an exchange.
Managed Operations Is the Destination
Start with a Playbook or Strategy Session. Both fees apply as credit when you move to full service.
The complete framework for evaluating and launching a Bitcoin mining operation. Built from real deployments.
- Hardware selection criteria
- Hosting facility evaluation checklist
- Financial modeling templates
- Tax structure overview
- Common mistakes and how to avoid them
Your custom deployment strategy, built for your numbers. Capital, tax bracket, timeline, and risk tolerance.
- Written deployment summary delivered after
- Custom deployment plan for your situation
- Hardware recommendations and sourcing guidance
- Tax advantage breakdown for your bracket
- Break-even analysis and cash flow projections
- Risk assessment for your specific setup
Fee applies as credit if you move to Managed Operations.
We run the operation. You own the hardware and the Bitcoin, and the only thing you receive from us is a monthly report and BTC in your wallet.
- Depreciable hardware, sourced and deployed
- Your operation monitored around the clock
- Risk spread across multiple US facilities
- Machines kept running at peak efficiency
- Clear monthly reports on production and costs
- Optional: +2% hashpower coverage guarantee
See How the Math Works
for Your Situation
In a 30-minute discovery call, we look at your tax bracket, capital, and timeline and give you a straight answer on whether mining makes sense.
FAQ
Do I need to know anything about Bitcoin mining?
No. We handle the technical side. You make the financial decision. We handle execution.
What does the 3% fee cover?
Hardware procurement, facility management, uptime monitoring, firmware updates, performance optimization, and monthly reporting. No hidden fees. The only optional extra is the +2% hashpower guarantee.
What is the minimum to get started?
The minimum is 10 miners — below that, the unit economics don’t hold up for either side. Occasionally flexible depending on the situation; ask on the call.
How does the tax deduction work?
Your LLC buys ASIC mining hardware. That hardware qualifies for 100% bonus depreciation under the One Big Beautiful Bill Act, and for Section 179 (up to $2.56M). Either lets you deduct the full cost in Year 1. Power, hosting, and management fees are ordinary business expenses. The result: you acquire Bitcoin at a lower after-tax cost than buying on an exchange. Your CPA handles the specifics.
What about passive activity rules?
The IRS may treat mining losses as passive if your LLC does not meet material participation tests. That can block your depreciation deduction from offsetting other income. This is solvable with the right structure. We cover it on the discovery call, and your CPA should review it. Read more about passive activity rules for miners.
Do I pay hosting costs separately?
Yes. Hosting covers power and rack space. It is paid to the facility. We negotiate rates on your behalf and pass through the actual cost. No markup.
Where are the facilities?
Multiple sites across the US. We use geographic diversification to reduce single-facility risk. Details are shared during onboarding.