Bitcoin Mining as a Business: Tax Deductions, Depreciation & Setup Guide for Canada and the USA

You are running miners at home. Sats are stacking. Your electricity bill has a dedicated line item for your mining room. You have spreadsheets tracking hashrates, pool payouts, and equipment purchases. But when tax season arrives, are you treating all of this as a hobby — or as a business?

The distinction is not academic. It is the difference between thousands of dollars in tax deductions and zero. Between writing off your Antminer S21 over five years and eating the full cost out of after-tax income. Between deducting your electricity, your repairs, your home office, and your conference travel — or deducting none of it.

If you are serious about mining, you should be serious about structuring it properly. This guide walks you through everything you need to know about setting up Bitcoin mining as a business in both Canada and the United States — the legal structures, the tax advantages, the record-keeping requirements, and the mistakes that get miners audited.

For the complete breakdown of how mining income is taxed in both countries, see our comprehensive Bitcoin Mining Tax Guide for Canada and the USA. This guide focuses on the business structure and deduction strategy side of the equation.

Hobby Mining vs. Business Mining: The Critical Distinction

Both the CRA and IRS draw a sharp line between hobby activity and business activity. On the hobby side of that line, your mining income is taxable but your expenses are not deductible. On the business side, your income is taxable and your expenses reduce that taxable income — often dramatically.

How the CRA Determines Business Status (Canada)

The Canada Revenue Agency evaluates the “totality of circumstances” to determine whether your mining qualifies as a business. There is no single revenue threshold. Instead, the CRA looks at:

• Profit intent: Are you mining with a reasonable expectation of profit? Documenting your business plan, profitability projections, and growth strategy strengthens your case.
• Commerciality: Do you operate in a businesslike manner? Dedicated mining space, business bank account, invoices for equipment, formal record-keeping — these signal commercial activity.
• Scale and investment: A single Bitaxe Gamma on your desk is harder to justify as a business than a rack of ASICs on dedicated 240V circuits with ventilation infrastructure.
• Time and effort: Regular monitoring, optimization, maintenance, firmware updates, pool management, and equipment upgrades all indicate business activity.
• Expertise: Have you developed specialized knowledge? Do you attend conferences, take courses, or follow mining profitability analysis closely?

How the IRS Determines Business Status (USA)

The IRS uses a similar but distinct set of factors, outlined in IRC Section 183 and refined through Tax Court cases. The IRS considers nine factors, and no single factor is determinative:

1. Manner in which the activity is carried on: Do you maintain complete books and records? Do you operate with a business plan?
2. Expertise of the taxpayer: Have you studied mining technology, energy optimization, or the economics of hash rate?
3. Time and effort expended: Regular, substantial time spent on the activity supports business treatment.
4. Expectation of asset appreciation: The equipment may depreciate, but the mined Bitcoin may appreciate — the IRS considers both.
5. Success in similar activities: Prior experience in mining or related technology businesses.
6. History of income or losses: Occasional profits support business classification. Perpetual losses without adjustment do not.
7. Amount of occasional profits: Even infrequent profitable years help establish business intent.
8. Financial status of the taxpayer: If mining is your sole source of income, business treatment is almost automatic.
9. Elements of personal pleasure: The IRS may argue mining is a hobby if it appears to be primarily recreational. Counter this with profit-focused documentation.

The safe harbor rule: If your mining operation shows a profit in three out of five consecutive years, the IRS presumes it is a business. This is not a requirement — you can qualify as a business even with losses — but meeting this threshold makes audits significantly easier to navigate.

Why the Distinction Matters: A Concrete Example

Consider a home miner running two Antminer S21 units, generating approximately $800 per month in Bitcoin revenue at current difficulty and BTC price:

The hobby miner pays tax on the full $9,600. The business miner reports a small loss — and may carry that loss forward or offset it against other income. At a 30% marginal tax rate, that is roughly $3,000 in tax savings in year one alone, primarily from equipment depreciation. Over a five-year equipment lifecycle, the cumulative advantage is substantial.

Tax Advantages of Business Mining

Once your mining operation qualifies as a business, a wide range of expenses become deductible against your mining revenue. Here is every major deduction category available to mining business operators:

Equipment Depreciation

This is the largest deduction for most miners. Mining hardware — ASICs, power supplies, networking equipment, ventilation systems — is depreciable business property. In Canada, this falls under Capital Cost Allowance (CCA). In the USA, you can use Section 179 expensing, MACRS depreciation, or bonus depreciation. We cover the specifics of each system in dedicated sections below.

Electricity

For most home miners, electricity is the single largest ongoing expense. As a business, the electricity consumed by your mining equipment is fully deductible. If your miners run on a dedicated circuit with a separate meter, the deduction is straightforward. If your mining draws from a shared household meter, you will need to calculate the mining portion — typically using wattage meters on each device multiplied by hours of operation. A Kill-A-Watt meter or smart plug with energy monitoring costs less than $30 and creates an audit-proof record. See our electricity cost analysis by state and province for current rates.

Home Office Deduction

If you dedicate a room or clearly defined space exclusively to your mining operation, you can deduct a proportionate share of your housing costs — mortgage interest or rent, property taxes, insurance, utilities, and maintenance. The space must be used regularly and exclusively for mining. A spare bedroom that also serves as a guest room does not qualify. A converted garage with miners, shelving, and ventilation that serves no other purpose does qualify.

In Canada, you calculate the percentage of your home used for business (square footage of mining room divided by total home square footage) and apply that to eligible expenses. In the USA, you can use the simplified method ($5 per square foot, up to 300 sq ft / $1,500 max) or the regular method with actual expenses.

Internet Costs

Mining requires an internet connection. The business portion of your internet bill is deductible. If mining is one of several uses, allocate a reasonable percentage — typically 25–50% depending on your situation. If you have a dedicated internet line for your mining operation, 100% is deductible.

Repair and Maintenance

Hashboard replacements, fan swaps, thermal paste reapplication, control board repairs, power supply replacements, dust cleaning supplies — all deductible. This is where D-Central’s ASIC repair services become a documented business expense. Keep every invoice and receipt. Professional repair services are fully deductible in the year the expense is incurred.

Professional Services

Accountant fees, tax preparation costs, legal consultations for business structure, mining consulting services — all deductible. The cost of hiring a crypto-savvy accountant to handle your mining business taxes is itself a tax deduction.

Conference and Education Travel

Attending Bitcoin conferences, mining meetups, or educational workshops related to your mining business? Travel costs, registration fees, accommodations, and meals (subject to limitations) are deductible. The key is documenting the business purpose. Mining conferences like Bitcoin Amsterdam, The Mining Disrupt Conference, or local Bitcoin meetups where you network with other miners and learn about new hardware — these have clear business purposes.

Software and Subscriptions

Mining pool subscriptions, monitoring software, VPN services used for mining, firmware licenses, hashrate monitoring tools, and accounting software — all deductible. If you use mining profitability calculators or paid analytics tools to optimize your operation, those costs qualify.

Mining Supplies and Accessories

Cables, adapters, shelving, racks, thermal compound, compressed air, networking hardware, surge protectors, UPS units, duct adapters, and noise management shrouds — everything directly used in your mining operation is a deductible business expense.

Setting Up Your Mining Business in Canada

Canada offers a relatively straightforward path to formalizing your mining operation. Here are your options and the steps involved.

Sole Proprietorship

The simplest structure. You and the business are the same legal entity. Mining income flows directly onto your personal T1 tax return on Form T2125 (Statement of Business or Professional Activities). This is where most home miners should start.

Steps to set up:

1. Choose a business name (optional — you can operate under your personal name).
2. Register your business provincially. Requirements vary by province — in Ontario, sole proprietors must register a business name with ServiceOntario; in Alberta, you register with Corporate Registry; in Quebec, you file with the Registraire des entreprises. Registration fees are typically $60–$200.
3. Obtain a Business Number (BN) from the CRA. You can register online through CRA Business Registration Online, by phone, or by mail. The BN is a 9-digit identifier used for all CRA accounts.
4. Open a business bank account. While not legally required for a sole proprietorship, maintaining a separate account for mining income and expenses is critical for clean record-keeping and audit defense.
5. Set up record-keeping. Track all income (daily mining payouts with FMV at time of receipt) and expenses from day one.

Incorporation

Incorporating creates a separate legal entity — a corporation — that owns and operates the mining business. This adds complexity but offers significant advantages at higher income levels (see the “When to Incorporate” section below).

Steps to incorporate:

1. Choose between federal or provincial incorporation. Federal incorporation (through Corporations Canada) allows you to operate in any province. Provincial incorporation is simpler and cheaper if you only operate in one province.
2. File Articles of Incorporation. Federal: $200 online, $250 by mail. Provincial costs vary ($300–$500 typically).
3. Obtain a BN and CRA program accounts (corporate income tax, GST/HST, payroll if paying yourself a salary).
4. Set up corporate banking, accounting, and annual filing obligations.

GST/HST Registration

If your mining business revenue exceeds $30,000 in any four consecutive calendar quarters, you must register for GST/HST. Below that threshold, registration is optional. Note that the sale of Bitcoin itself is considered a “financial service” and is exempt from GST/HST in most cases. However, if you sell mining equipment or other taxable goods/services, GST/HST applies to those sales. Consult your accountant on how mining revenue interacts with the $30,000 small supplier threshold in your specific situation.

Record-Keeping Requirements (CRA)

The CRA requires you to keep business records for at least six years from the end of the tax year to which they relate. For a mining business, this means maintaining:

• Daily mining payout records with fair market value in CAD at time of receipt
• All equipment purchase invoices and receipts
• Electricity bills and usage calculations
• Bank statements showing business income and expenses
• Repair invoices and maintenance logs
• Home office expense calculations
• Records of any Bitcoin sold, exchanged, or disposed of (date, amount, FMV, proceeds)

Setting Up Your Mining Business in the USA

The United States offers more structural options than Canada, each with distinct tax implications.

Sole Proprietorship

The default structure if you start mining as a business without forming an entity. Income and expenses are reported on Schedule C of your personal Form 1040. Simple and inexpensive to set up, but offers no liability protection.

Steps to set up:

1. Obtain an EIN (Employer Identification Number) from the IRS. Free, and available instantly online at irs.gov. You need this even as a sole proprietor for business banking and tax filing.
2. Register with your state. Requirements vary — some states require a business license, others require registration only if operating under a DBA (doing business as) name.
3. Open a business bank account using your EIN.
4. Begin estimated quarterly tax payments. As a self-employed miner, you must make quarterly estimated payments (Form 1040-ES) if you expect to owe $1,000 or more in tax. Due dates: April 15, June 15, September 15, January 15.

LLC (Limited Liability Company)

An LLC provides liability protection — separating your personal assets from business debts and liabilities — while maintaining tax simplicity. A single-member LLC is a “disregarded entity” for federal tax purposes, meaning income still flows to your personal Schedule C. The legal protection is the main benefit.

Steps to set up:

1. Choose your state of formation. Most miners should form in their home state. Wyoming and New Mexico offer favorable LLC laws and low fees.
2. File Articles of Organization with your state’s Secretary of State. Fees range from $50 (New Mexico) to $500 (Massachusetts).
3. Create an Operating Agreement. Even for single-member LLCs, this document establishes the business structure and strengthens liability protection.
4. Obtain an EIN and open a business bank account.
5. Register for state and local taxes as required.

S-Corporation

An S-Corp election (made by filing Form 2553 with the IRS) allows you to split business income between a “reasonable salary” (subject to employment taxes) and distributions (not subject to employment taxes). This can save significant self-employment tax at higher income levels. However, S-Corps require payroll processing, additional tax filings (Form 1120-S), and reasonable compensation analysis. This structure typically makes sense when mining net income exceeds $50,000–$60,000 annually.

Self-Employment Tax Considerations

As a sole proprietor or single-member LLC, your net mining income is subject to self-employment tax of 15.3% (12.4% Social Security up to the wage base + 2.9% Medicare, uncapped). This is in addition to income tax. For a mining operation netting $30,000, that is $4,590 in self-employment tax alone. The S-Corp structure can reduce this burden by allowing you to pay yourself a lower reasonable salary and take remaining profits as distributions.

Quarterly Estimated Payments

The IRS expects tax payments throughout the year, not just at filing time. If your mining business generates income, you must estimate and pay quarterly. Underpayment triggers penalties. The safe harbor: pay at least 100% of your prior year’s tax liability (110% if your AGI exceeded $150,000) through withholding and estimated payments to avoid penalties regardless of current-year income.

Record-Keeping Requirements: Your Audit Shield

Meticulous record-keeping is not optional — it is the foundation of every deduction you claim. If you cannot document an expense, you cannot deduct it. Period. Both the CRA and IRS can deny deductions during an audit if records are missing or incomplete.

What to Track Daily

• Mining revenue: Every pool payout or solo block reward, recorded with the date, amount of BTC, and fair market value in your local currency at the time of receipt. Most pools provide dashboards with payout history — export this data regularly. Do not rely solely on the pool’s records; pools can shut down or purge historical data.
• Electricity consumption: Use smart plugs, dedicated meters, or wattage calculations (device TDP x hours x electricity rate) to track daily power costs.

What to Track Monthly

• Electricity bills: Keep every bill. Annotate the mining portion if calculated separately.
• Internet bills: Keep bills and document your business-use percentage.
• Equipment status: Note any repairs, maintenance, firmware updates, or configuration changes. Photograph equipment installations and modifications.

What to Track Annually

• Equipment purchases: Full invoices with purchase date, vendor, model, serial number, and cost. Keep receipts for power supplies, cables, cooling equipment, and every accessory.
• Depreciation schedules: Maintain a running schedule of all depreciable assets, their cost basis, depreciation method, and remaining value.
• Home office calculations: Annual square footage calculation with supporting measurements.
• Professional fees: Accounting, legal, and consulting invoices.
• Travel documentation: Itineraries, registration receipts, and notes documenting the business purpose of conference attendance.

Tools for Record-Keeping

• Spreadsheets: A well-structured Google Sheets or Excel workbook with separate tabs for daily revenue, monthly expenses, equipment inventory, and depreciation schedules. Simple, free, and fully within your control.
• Mining pool dashboards: Export payout data regularly from your pool (Solo CKPool, OCEAN, Braiins, etc.). Screenshot or download CSV files monthly.
• Crypto tax software: Tools like Koinly, CoinTracker, or CryptoTaxCalculator can import mining pool data and generate tax reports. These are especially useful if you also trade or spend Bitcoin.
• Accounting software: Wave (free) or QuickBooks for tracking business income and expenses in a format your accountant will appreciate.
• Smart energy monitors: Devices that track real-time power consumption per circuit or outlet, creating automated electricity records.

Capital Cost Allowance: Depreciating Mining Equipment in Canada

In Canada, you cannot deduct the full purchase price of mining equipment in the year you buy it (with limited exceptions). Instead, you claim Capital Cost Allowance (CCA) — a structured depreciation system that lets you deduct a percentage of the equipment’s cost each year.

CCA Class 50: Your Mining Equipment Category

Bitcoin mining hardware (ASIC miners, power supplies, networking equipment, and other computer-based equipment acquired after March 18, 2007) generally falls under CCA Class 50, which has a 55% declining balance rate. This means you can deduct 55% of the remaining undepreciated capital cost (UCC) each year.

The Accelerated Investment Incentive Property (AIIP) Rules

For assets acquired and available for use after November 20, 2018, the federal Accelerated Investment Incentive Property (AIIP) rules effectively eliminate the old “half-year rule” and provide an enhanced first-year deduction. Under AIIP, you get up to 1.5 times the normal CCA rate in the first year the asset is available for use. For Class 50 at 55%, the effective first-year rate is approximately 82.5% of the asset’s cost.

Note: The AIIP enhanced rates are being phased down. For property that becomes available for use in 2024, the first-year enhancement factor is 75% of the additional amount. For 2025 and subsequent years, the factor may be further reduced or the AIIP rules may expire — consult your accountant for the current status.

CCA Calculation Example

Suppose you purchase an Antminer S21 for $6,000 CAD in 2026:

*Year 1 assumes AIIP enhanced deduction (82.5% of cost). Actual first-year amount depends on AIIP status in the year of purchase — verify current rules with your accountant.

Total CCA over 5 years: $5,957 — nearly the full cost of the equipment recovered as deductions.

Depreciation: Writing Off Mining Equipment in the USA

The US tax code offers more aggressive depreciation options than Canada — in many cases, you can deduct the entire cost of mining equipment in the year of purchase.

Section 179 Immediate Expensing

Section 179 allows businesses to deduct the full purchase price of qualifying equipment in the year it is placed in service, rather than depreciating it over time. For 2026, the deduction limit is approximately $1,220,000 (adjusted annually for inflation), with a phase-out beginning at approximately $3,050,000 in total equipment purchases.

For most home miners, Section 179 means you can deduct the entire cost of your ASICs, power supplies, cooling systems, and networking equipment in year one. Buy a $6,000 Antminer S21 in January? Deduct $6,000 against your mining income that year.

Requirements:

• Equipment must be used more than 50% for business
• Must be placed in service during the tax year
• Deduction cannot exceed your business’s net income (excess carries forward)
• Must be tangible personal property (ASICs qualify)

MACRS 5-Year Depreciation

If you do not use Section 179 (or prefer to spread deductions), computer equipment falls under the Modified Accelerated Cost Recovery System (MACRS) with a 5-year recovery period. The MACRS 200% declining balance method produces these annual percentages:

Bonus Depreciation

Bonus depreciation has historically allowed businesses to deduct a large percentage of qualifying equipment costs in the first year, on top of regular depreciation. Under the Tax Cuts and Jobs Act, 100% bonus depreciation was available through 2022, then began phasing down: 80% in 2023, 60% in 2024, 40% in 2025, 20% in 2026. By 2027, bonus depreciation is scheduled to reach 0% unless Congress extends it. For 2026, you can take 20% bonus depreciation on the remaining cost after any Section 179 deduction. Check current legislation, as Congress frequently modifies these provisions.

Which Method Should You Choose?

For most home mining businesses, Section 179 is the clear winner. It lets you deduct the full cost immediately, maximizing your tax benefit in year one. Use MACRS if your mining income is lower than your equipment cost (Section 179 cannot create a business loss) or if you strategically want to spread deductions across multiple years to optimize your tax bracket.

Common Mistakes to Avoid

These are the errors that trigger audits, disallow deductions, and cost miners real money:

1. Not Declaring Mining Income at All

This is the biggest mistake, and it is becoming increasingly dangerous. The CRA and IRS are investing heavily in blockchain analytics. Pool payouts are traceable. Exchange deposits create records. The CRA is implementing the Crypto-Asset Reporting Framework (CARF) in 2026, which enables automatic cross-border information sharing. The IRS has had a mandatory cryptocurrency question on Form 1040 since 2019 and is expanding broker reporting requirements. If you are mining and not reporting, you are playing a game you will eventually lose — and the penalties for willful non-reporting are severe.

2. Mixing Personal and Business Finances

Using one bank account for everything — mining revenue, personal spending, equipment purchases, grocery runs — is the fastest way to have your business deductions challenged. Open a separate business account. Use it exclusively for mining income and mining expenses. This single step resolves most record-keeping issues.

3. Not Tracking Fair Market Value at Time of Mining

Your taxable mining income is the fair market value (FMV) of Bitcoin at the time you receive it — not when you sell it. If you mine 0.001 BTC on a day when BTC is worth $85,000, you have $85 in income that day, regardless of what BTC is worth when you eventually sell. Many miners fail to record FMV at receipt and then struggle to reconstruct it at tax time. Automate this with crypto tax software or a daily logging spreadsheet.

4. Claiming a Home Office That Does Not Qualify

The “exclusive and regular use” test is strict. If your mining room doubles as a playroom, storage area, or guest bedroom, the deduction can be denied. Dedicate the space, document it with photos, and use it exclusively for your mining business.

5. Failing to Make Quarterly Estimated Payments (USA)

The IRS charges underpayment penalties if you owe more than $1,000 at filing and did not make adequate estimated payments throughout the year. Mining income is lumpy — BTC price fluctuations can make quarterly estimates tricky. Use the prior-year safe harbor (pay 100%/110% of prior year tax) to avoid penalties regardless of current-year income.

6. Ignoring GST/HST Implications (Canada)

If your mining business (combined with any other business activity) exceeds $30,000 in revenue, you must register for and collect GST/HST. The interaction between mining revenue and GST/HST is nuanced — Bitcoin dispositions are generally exempt financial services, but hardware sales or consulting services are not. Get professional advice on this.

7. Not Keeping Records Long Enough

Canada: 6 years from the end of the tax year. USA: Generally 3 years from filing, but 6 years if gross income was understated by more than 25%, and indefinitely if no return was filed or fraud is suspected. Keep everything for at least 7 years to be safe.

8. Overclaiming Expenses Without Documentation

Deducting 100% of your household electricity when miners draw 30% of it. Claiming your entire internet bill when miners use a fraction of bandwidth. Deducting a vacation as a “conference trip.” Aggressive deductions without supporting documentation are audit magnets. Be honest, be precise, and keep the paper trail.

When to Incorporate Your Mining Business

Starting as a sole proprietorship is right for most miners. But as your operation grows, incorporation (in Canada) or an S-Corp election (in the USA) can provide meaningful benefits.

Canada: When to Incorporate

Consider incorporation when:

• Net mining income exceeds $50,000–$60,000 CAD. The small business tax rate in Canada is approximately 12.2% (combined federal-provincial, varies by province) on the first $500,000 of active business income. Personal marginal rates at this income level are typically 30%+. The difference is significant — though you eventually pay personal tax when extracting funds from the corporation.
• You want to retain and reinvest earnings. If you are plowing mining profits back into more hardware, incorporation lets you reinvest at the lower corporate tax rate. You only pay personal tax when you withdraw funds as salary or dividends.
• Liability protection matters. A corporation separates your personal assets from business liabilities. If your mining operation causes property damage (electrical fire, water damage from cooling systems), corporate liability protection shields your personal finances.
• You plan to bring in partners or investors. A corporate structure makes equity sharing, investment, and eventual sale cleaner.

USA: When to Elect S-Corp Status

Consider an S-Corp election when:

• Net self-employment income exceeds $50,000–$60,000 USD. The 15.3% self-employment tax applies to sole proprietorship/LLC income. An S-Corp lets you pay yourself a “reasonable salary” (subject to employment taxes) and take remaining profit as distributions (not subject to self-employment tax). On $80,000 net income, paying yourself a $45,000 salary and taking $35,000 in distributions saves approximately $5,355 in self-employment tax.
• The administrative overhead is justified. S-Corps require payroll processing, a separate tax return (Form 1120-S), and reasonable compensation analysis. Below $50,000 in net income, the savings rarely justify the added complexity and accounting costs.

The Tax Deferral Advantage

In Canada, the primary benefit of incorporation is tax deferral. The spread between the ~12.2% small business rate and your marginal personal rate lets you keep more capital working inside the corporation. For miners aggressively expanding their operation — buying more ASICs, upgrading electrical infrastructure, adding ventilation — this deferral accelerates growth. You are reinvesting with pre-personal-tax dollars.

Think of it this way: for every $100 of mining profit, a sole proprietor at a 40% marginal rate keeps $60 to reinvest. A corporation keeps $87.80. Over several years of compound reinvestment, the gap becomes substantial.

Working with an Accountant: Your Most Important Business Expense

Bitcoin mining taxation is a niche within a niche. Generic accountants who handle small business taxes may not understand the specific rules around mining income recognition, crypto dispositions, or the interaction between mining and GST/HST. Finding the right accountant is critical.

What to Look For

• Cryptocurrency-specific experience. Ask directly: “How many crypto mining clients do you have?” The answer should not be zero.
• Understanding of mining mechanics. They should know the difference between pool payouts and solo block rewards. They should understand that mining creates income at the time of receipt, not sale.
• CCA / depreciation expertise. They should be comfortable calculating CCA (Canada) or advising on Section 179 vs. MACRS strategies (USA).
• Proactive tax planning. A good crypto accountant does not just file your return — they help you structure your operation to minimize tax liability legally. They advise on incorporation timing, equipment purchase timing, and loss harvesting strategies.
• Familiarity with crypto tax software. They should be able to work with exports from Koinly, CoinTracker, or similar tools, and reconcile them with your mining records.

Questions to Ask Before Hiring

1. How many cryptocurrency clients do you serve, and how many are miners specifically?
2. Are you familiar with CCA Class 50 (Canada) or Section 179/MACRS depreciation for mining equipment (USA)?
3. How do you handle the FMV calculation for mining income received throughout the year?
4. Can you advise on incorporation timing based on my mining income trajectory?
5. Do you stay current on crypto-specific tax legislation and enforcement changes?
6. What record-keeping format do you prefer from mining clients?
7. What is your fee structure, and do you offer tax planning consultations beyond annual filing?

Cost Expectations

A crypto-savvy accountant will cost more than a generic tax preparer. Expect:

• Annual tax preparation (sole proprietor): $500–$1,500 CAD/USD depending on complexity
• Annual tax preparation (corporation): $1,500–$3,500 CAD/USD
• Tax planning consultation: $200–$500 per hour
• Bookkeeping (if outsourced): $200–$600 per month

Remember: every dollar you pay your accountant is a deductible business expense. The right accountant saves you multiples of their fee in legitimate deductions and audit avoidance.

Getting Started: Your Mining Business Setup Checklist

Ready to formalize your mining operation? Here is the step-by-step path for both countries:

Canada Checklist

1. ☐ Decide on structure: sole proprietorship (start here) or incorporation
2. ☐ Register your business name with your province
3. ☐ Obtain a Business Number (BN) from the CRA
4. ☐ Open a dedicated business bank account
5. ☐ Set up a record-keeping system (spreadsheet or accounting software)
6. ☐ Install energy monitoring on your mining equipment
7. ☐ Document your dedicated mining space (photos, measurements)
8. ☐ Find a crypto-savvy accountant (before tax season, not during)
9. ☐ Create a CCA schedule for all mining equipment
10. ☐ Begin tracking daily mining revenue with FMV at time of receipt
11. ☐ Evaluate GST/HST registration requirements

USA Checklist

1. ☐ Decide on structure: sole proprietorship, LLC, or S-Corp
2. ☐ Obtain an EIN from the IRS (free, online, instant)
3. ☐ Register with your state (business license, DBA if applicable)
4. ☐ Form LLC if desired (file Articles of Organization with your state)
5. ☐ Open a dedicated business bank account
6. ☐ Set up quarterly estimated tax payment reminders (April 15, June 15, Sept 15, Jan 15)
7. ☐ Install energy monitoring on your mining equipment
8. ☐ Document your dedicated mining space (photos, measurements)
9. ☐ Find a crypto-savvy CPA or enrolled agent
10. ☐ Choose a depreciation strategy (Section 179 vs. MACRS)
11. ☐ Begin tracking daily mining revenue with FMV at time of receipt

Final Thoughts: Mining Smarter, Not Just Harder

Every watt you push through your ASICs is an investment. Every sat you stack is income. And every dollar you save in taxes is a dollar that can go back into your operation — more hashrate, better equipment, upgraded infrastructure.

The difference between a hobby miner and a business miner is not the hardware they run. It is how they structure, document, and optimize the operation around it. The tax code rewards businesses that invest in capital equipment, maintain proper records, and operate with intent. Bitcoin mining fits this framework perfectly.

You are already doing the hard part — sourcing hardware, managing power, monitoring hashrate, maintaining equipment. The business structure is the easy part, and the financial impact is enormous.

Start with the checklists above. Get a business bank account open this week. Install an energy monitor today. And find a crypto-savvy accountant before the next tax season. Your future self — and your stack — will thank you.

For the complete breakdown of how mining income is reported and taxed, read our Bitcoin Mining Tax Guide for Canada and the USA. To understand whether mining is more profitable than simply buying Bitcoin, see our analysis of Bitcoin Mining vs. Dollar-Cost Averaging. And to run your own numbers with current network conditions, use our Mining Profitability Calculator.