Bitcoin taxes for small businesses —
what you actually need to know

The short version

When you accept Bitcoin or other cryptocurrency as payment for goods or services, the IRS treats it as business income — taxable at the fair market value in US dollars at the time you received it. This is true regardless of whether you convert it to dollars immediately or hold it.

For most small merchants, this isn't dramatically different from reporting cash income. The key is keeping good records — which OrangeTill makes easy.

How the IRS treats crypto

The IRS classifies cryptocurrency as property — not currency. This has been the official position since IRS Notice 2014-21, and it has important implications:

• Receiving Bitcoin for services or goods is ordinary income. When a customer pays you $25 in Bitcoin for a sandwich, that's $25 of business income — just like if they'd paid in cash. You report it as such.
• The value at time of receipt is what matters. If Bitcoin's price goes up or down after you receive it, that doesn't change your income for that transaction. The income is the dollar value when it arrived.
• Holding and later selling creates a capital gain or loss. If you hold Bitcoin received as payment and later sell it at a higher price, the difference is a capital gain. If you sell at a lower price, it's a capital loss. This is why many merchants convert immediately — it simplifies their tax situation considerably.

Two scenarios, two approaches

What records to keep

For each Bitcoin transaction, you should have:

• The date and time of the transaction
• The amount in US dollars at the time of the transaction
• The cryptocurrency received and the amount
• What it was received for (goods, services)

OrangeTill records all of this automatically with every logged payment. The only thing it doesn't track is what you do with the crypto after you receive it — if you hold and later sell, you'll need records from your exchange as well.

How to export your OrangeTill records

Exporting your payment history for tax purposes takes about 30 seconds:

1. Open OrangeTill and go to the History tab
2. Tap the Export CSV button in the top right
3. Save or share the file

The CSV file contains every logged payment with date, time, dollar amount, cryptocurrency, crypto amount, and any notes you added. This is exactly the format most accountants and tax software expect.

We recommend exporting at the end of each month and saving the files alongside your other business records. Year-end tax preparation is much easier when you've been maintaining records monthly rather than trying to reconstruct everything in April.

What to ask your accountant

Not all accountants are familiar with crypto. When you bring your records to your CPA or tax preparer, these are the right questions to ask upfront:

• "Are you familiar with cryptocurrency tax reporting?"
• "How do you handle crypto received as business income?"
• "If I hold Bitcoin I received as payment, when do I owe capital gains tax?"
• "Are there any state-level crypto tax rules I should be aware of in [your state]?"

If your accountant isn't familiar with crypto, it may be worth finding one who is — particularly if your Bitcoin volume grows. Many CPAs now specialize in or have experience with digital asset taxation.

Stablecoins — a simpler option

If the tax complexity of volatile crypto like Bitcoin concerns you, stablecoins like USDC and USDT are worth knowing about. These are cryptocurrencies pegged to the dollar — 1 USDC is always worth $1. Receiving USDC as payment is essentially the same as receiving a dollar — there's no price appreciation to track, no conversion rate to record. You just received that many dollars in a different form.

OrangeTill accepts Bitcoin and the Lightning Network. If you want the simplicity of Bitcoin payments without price volatility or complex tax tracking, accepting USDC is a great starting point.