Choosing the 50/50 post payout is best if SBD are trading for $1+ but Power Up 100% pays more if not! See the SBD value any time at http://www.steemdollar.com/sd_index.php which is created and maintained by @mauricemikkers.
Powering up also is easier to process because it eliminates the need to use the Steem and Steem Dollars market at https://steemit.com/market. Powering up simplifies our process in receiving rewards because all powered up post rewards go directly into our Steem Power balance. Note that comments always pay 50/50. If we have a tax payment system which treats Steem power as an option to receive Steem rather than having it as a currency, we also can simplify taxes by only paying when we actually power down the Steem Power into Steem. For simplicity, I am now doing 100% power up until the Steem Dollar price is over $1.10 consistently because then I would earn about 5% more per post payout.
Steem Dollars were trading as high as $2 earlier in 2017 which inspired my post explaining how to earn more by selecting the 50/50 payout at https://steemit.com/steemit/@jerrybanfield/steemit-authors-earn-37-more-steem-with-50-50-payout. If we believe the price will go high again, taking the 50/50 payout could be better if we want to hold SBD for a day when they trade high or as a hedge against Steem dropping in value in the future at which point Steem Dollars would have more value than today. I am betting on a huge price spike and consistent rise in the Steem price which motivates me to put everything I am getting back into Steem Power!
In summary, being aware of the author payout choices we have can help us maximize our rewards from posts and select a strategy going forward optimized for either reinvesting automatically with Steem Power or cashing out 50% with SBD!
Love,
Jerry Banfield
Bonus: Steem Power and Taxes
After an in person talk with @lexiconical, I am adjusting my tax payment system by only paying tax when I actually power down and then cash out to my bank account or another cryptocurrency at which point it becomes income because potentially overpaying a whole lot on something that is not clearly defined as a currency seems foolish. If an auditor disagrees on my good faith assumption in the future or the tax code does make it more clear how to tax Steem Power and rewards from Steemit, I will be happy to review the difference. More on this in an upcoming post!
Thanks for the tip!
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Thanks for sharing
Great post never really realized that it is much better to switch between 100% Power Up if SBD is Below a Dollar. and 50/50 Post Payout when SBD is 1$+
Thank You for the Tip!
We would like to get in touch with you can you please join us in our Discord -- http://discord.me/adsactly
If you don't have a Discord please reach out to us on Steemit.Chat
@adsactly thank you for the invitation I just sent you a message!
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GREAT award winning post! Follow me @lurehound
Great math that clarifies more options.Thanks
Let's hope we all owe ridiculously large amount to the tax man next year!
Yea!
Thanks you for the tips! Are very helpful for peopel like me. I'm new here and I have a really positive feeling about this new world steemit!! Thanks again!!
Interesting approach Jerry. But aside from the approach, your comment caught my eye.
Specifically, "I am adjusting my tax payment system by only paying tax when I actually power down and then cash out to my bank account or another cryptocurrency at which point it becomes income because potentially overpaying a whole lot on something that is not clearly defined as a currency seems foolish."
As I understand it, the IRS hasn't come out and defined cryptocurrency as money. It's my understanding that it's treated as property for tax purposes.
So if that's the case, going from one crypto to another (and in some cases that is the only way to buy some cryptos) would seem to me to be more like a 1031 exchange.
"IRC Section 1031 provides an exception and allows you to postpone paying tax on the gain if you reinvest the proceeds in similar property as part of a qualifying like-kind exchange. Gain deferred in a like-kind exchange under IRC Section 1031 is tax-deferred, but it is not tax-free."
That being said, just hours ago, I read this: https://www.forbes.com/sites/greatspeculations/2017/08/15/cryptocurrency-traders-risk-irs-trouble-with-like-kind-exchanges/#77e85ae226a8
"Section 1031 specifically excludes stocks, bonds, notes, and indebtedness. It does not mention “cryptocurrency” or “virtual currency” since Section 1031 predated the advent of cryptocurrencies."
That being said, cryptocurrency 'coins' are not stocks, bonds, notes or indebtedness and the IRS does not define it as currency, but property, hence the treatment as capital gains.
When you sell a home you own, you trigger capital gains. When you do a 1031 exchange, you're going from one home to another which can be bigger, smaller, in totally different locale, but you don't trigger capital gains.
The IRS hasn't publicly ruled on the treatment of using 1031 like exchange between cryptos. So as I understand it, crypto only becomes income when you cash out to fiat.
I learned awsome fact!
same here
At current low value at Steem and SBD, 100% power-up is the way to go.
That's exactly what I'm doing. I did some research before i joined and everyone suggested 100% power-up to start. I always learn something from Jerry, and this is yet another item to add to my Steemit Tips sheet. I just wish they had a "One Click" button to buy Steem using a card, instead of opening an account through an exchange. That will come in time...
Great advice in regards to the rewards. I was holding SBDs but share your feeling that the Steem price will move upward when the exchange issue gets resolved. The Steem price has been artificially suppressed b/c of the exchange issues we've encountered and now is the time to load up on as much cheap Steem as possible.
Also appreciate the tax advice. I have been keeping a daily log on Steem and SBDs earned daily, but your explanation makes perfect sense. Upon consulting with my accountant he had advised holding any coin for greater than 1 year before selling so as to pay long term cap gains and reduce my tax rate. There's some gray area concerning what could be considered dividend income or actual income from rewards, so I think it's a really good idea to keep records of daily rewards just in case. The great thing is the block chain keeps track of all that for you, but keeping a spreadsheet like you outlined in one of your videos is definitely the way to go.
Nice trick!!!
50/50 is good when you are looking to buy other cryptocurrencies
Good trick....hope this helps me.
great stuff and really useful, i might just do that from now on, until the dollar goes up!!
Thank you @allasyummyfood for giving so much to our community here with your posts and taking your time to read my post and comment!
you are welcome! you re the steemit king :P always such useful tutorials, i really try and read them all but its hard sometimes! x
Thanks for the heads-up, it is greatly appreciated and will be put to good use. Namaste :)
Good move @jerrybanfield, @lexiconical was very well-versed in taxes when I met you guys at the meet up in Sarasota.Thanks for sharing this post it will help a lot of people
Ah nice trick this is. Will keep an eye out for these opportunities!
@jerrybanfield Thanks Jerry this is a very informative post. Now I have to get back to working on my 2016 taxes since I filed for an extension. With STEEMIT we can all improve ourselves in many ways not only in Financial ways but Spiritually too. Only Positive Attitudes today. Stay in the Moment and have another Beautiful Day.
You got it bruh
Thanks @jerrybanfield you are awsome!
Where do I change it to 50/50 @jerrybanfield new to the game and need to get on this b4 it blows up
Under your post when you are about to submit a new story :) There is a tab that says Default 50/50 and you can choose 100%
Jerry, your outfit makes me laugh!
Keep On "STACKIN" my STEEMIANS 💪🏼🙌🏼💯... power up baby! 😎
Good point, I agree
I like to do powered up posts when sbd is consistently under 95 cents
funny how you always talk about helping out others and I have commented so much on your post with always up votwes and you never ounce hit me with a pay out up voye
Your idea is good @jerrybanfield but I do not agree with it.
100% Power up is good only when we could trade it like other liquid Steem.
But once it gets into Steem Power, it gets locked and Powering Down takes a long time.
And if the value of Steem goes down in future or steemit gets closed, then all our hard work will be wasted.
So, I like 50/50, at least we get half instant benefit of what we have done. No one knows the future and we should always be ready for adverse circumstances.
thats true but we can also do always 50/50 and wait for cashing out when steem is at a good value.
Since i'm on steemit i invested all i got steem & steem dollars in SP and i'm gonna do this for a looong time....community knows ;)
Wow that's useful! :)
Thanks for the tip!
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Nice one Jerry... Thanks for sharing this with us, mich appreciated 👍
it's excellent
Hi
Great fact.
I had been playing around with powering up my posts and leaving some so I thank you for neatly explaining it all for me. Pretty sure every question I want to answer by experimenting with the payout system you answered somewhere in there or the link to your previous article. Thanks for another awesome article, you never disappoint :)
I recently wrote a great article about thumbnails...
Very informative.
Thank you.
Does 50/50 post payout ensure more users will engage with your post? Or is this not true?
Does Steem plan on adding more analytics to the platform?
really awesome i join steemit through your video on youtube and i love all videos of yours thats amazing dude.
Thanks for the tip jerry no idea
But if I power up 100% on my posts, it will only be stored in my Steem Power right?
Good investment tips . Steem has been having its ups and downs lately
I am a little new for this reason i do not have this option i gess, but sound great power up directly.
Thanks a lot.
You definitely have this option. Whenever you click on that submit a story link on the top right corner, this writing box appears. At the bottom right you click at the rewards box and the options pop up. Choose the 100% to power up.
Ohhhjhh thanks a lot i never seem that would be a good idea because the power up is very very important
Some people think un short term but if you think in long term time the power up is your best choice i review this.
Thank you so much.
Best regard.
@galberto
Thank you for this. I am new to Steemit and trying to learn the ropes. I would hate to spin my wheels by doing something that is not effective. Thanks again.
you are a Geneous Jerry you should be one of the Steemit Admin Team jeje
Thanks for sharing some of those secrets and knowlegde. Persons like you is what we want in this world.
Good contribution as always!
Thanks Jerry :)
I had wondered about the tax thing since Steem can't be directly converted to USD. It seems that when it is money in hand or bitcoin then it must be reported from what I have come to know thus far.
Watching your "10 reasons for $10..." video as I type this, just wanted to say thanks for the information! Appreciate it !
Great advice
very interesting
Hello Jerry, I know you from your Udemy courses... (I own 7 of your courses) Thanks for the good tip.