Part-timers should know! A practical guide to Bitcoin investment and tax filing

Introduction

Are you a part-time worker worried about your future? Asset building in an unstable employment environment is a challenge many face. One of the reasons cryptocurrencies like Bitcoin are gaining attention is their low barrier to entry—starting with small amounts. However, what many part-timers overlook is the obligation to file tax returns associated with Bitcoin investments. In this article, we will practically explain the key points part-timers must know when starting Bitcoin investment, especially the importance of filing tax returns, and the actual operational steps involved.

Things Part-Timers Should Know Before Starting Bitcoin Investment

Why Bitcoin is appealing to part-timers

Bitcoin is a digital currency managed on a decentralized network, independent of central authorities like banks or governments. This characteristic offers several benefits for part-timers:

• Investing with small amounts: You can purchase from 0.0001BTC instead of 1BTC, allowing investment within limited budgets
• Flexible timing: Using smartphone apps, buying and selling can be done during breaks or between jobs
• 24/7 trading: Unlike traditional financial institutions, trading is possible at night and on holidays

Understanding the economic model first

Bitcoin prices are heavily influenced by supply, demand, and market sentiment. For part-timers, since funds are often directly linked to living expenses, careful consideration is required when deciding the investment scale.

Must-Read for Part-Timers: Tax Filing and Tax Strategies

Why tax filing is important for part-timers

Many part-timers mistakenly think, “Since I’m not a salaried employee, I don’t need to file,” but profits from Bitcoin sales are taxable. Under Japanese tax law, gains from selling or converting cryptocurrencies are considered income and must be reported in tax returns.

Handling of cryptocurrencies in part-timer tax returns

Tax treatment when part-timers profit from Bitcoin investments:

1. Type of income: Classified as miscellaneous income

• Gains from Bitcoin sales are categorized as “miscellaneous income”
• Must be calculated separately from employment or business income

2. How tax rates are determined

• Tax rates vary depending on other income
• If profits exceed 200,000 yen, filing is generally mandatory

3. Importance of record keeping

• Record purchase date, purchase price, sale date, sale price
• Keep all transaction histories from exchanges
• Backups via screenshots or CSV files are recommended

Practical steps for filing

• Calculate the difference between “acquisition cost” and “sale price” from transaction records
• For multiple trades, use moving average or weighted average methods to determine unit cost
• Combine with other income to calculate total income
• File with the tax office by the deadline (March 15 each year)

Common mistakes to avoid

Cases like “reporting only sales and forgetting expenses,” “missing purchase records,” or “not filing at all” are frequent. These can lead to penalties such as late payment interest or additional taxes.

Practical Ways to Start Bitcoin Investment

Step 1: Choose a reliable exchange and open an account

Criteria for choosing an exchange:

• Security measures: Two-factor authentication, cold storage support
• Fee transparency: Trading and deposit/withdrawal fees
• Support system: Japanese language support, beginner-friendly content
• Regulatory compliance: Registered with the Financial Services Agency (FSA)

Account opening process:

1. Register email address
2. Submit identity verification documents (driver’s license, etc.)
3. Link bank account
4. Set up two-factor authentication

Step 2: Deposit Japanese Yen and select purchase method

• Spot purchase: Directly buy Bitcoin with Japanese Yen
• Regular accumulation: Automate monthly purchases (e.g., 3,000 yen/month)
• Dollar-cost averaging: Buy in multiple installments to lower average purchase price

For part-timers, “regular accumulation” is recommended because it provides psychological ease and simplifies record management for tax purposes.

Step 3: Secure asset management

Basic wallet choices:

• Exchange wallet: High liquidity and easy trading, but risk of hacking
• Dedicated wallet: Self-managed, enhanced security but slightly more complex to operate

For small-scale starting points, using a trusted exchange’s two-factor authenticated wallet is sufficient.

Risk Management and Countermeasures

How to handle price fluctuations

Bitcoin can fluctuate 30–50% within a month.

• Never include living expenses in investment funds
• Decide on an investment scale that you can afford to lose
• Avoid panic during short-term price swings

Security checklist

• □ Is two-factor authentication enabled?
• □ Are passwords changed regularly?
• □ Do you avoid suspicious emails or DMs?
• □ Do you refrain from trading over public Wi-Fi?

Practical Mindset for Part-Timers to Succeed

The importance of a long-term perspective

Cryptocurrency markets are highly volatile in the short term. Instead of focusing on “how much profit this month,” it’s more important to consider “how to build assets over 5 years.”

Habitual information gathering

Continuously learn from official news sites, industry updates, and market analysis reports to sharpen judgment.

Establishing your own style

Choose methods suited to your lifestyle and personality, such as swing trading, long-term holding, or dollar-cost averaging. There’s no need to imitate others’ styles.

Habit of recording and reviewing

Keep records of monthly purchase amounts, current holdings, and valuation. This improves investment decisions and also prepares you for tax filing as a part-timer.

Summary

Even as a part-timer, building assets through Bitcoin investment is entirely possible. The key points are:

1. Investment planning with tax filing in mind: Filing is mandatory, and profits must be reported
2. Principles of small amounts, continuous, and diversified investment: Success depends on sustainable, long-term efforts
3. Simultaneous strengthening of security and knowledge: Protect assets while deepening market understanding

Bitcoin offers a new avenue for asset building, but mishandling can lead to significant risks. Choosing a trusted exchange, performing proper tax procedures, and investing at your own pace can enable steady asset growth alongside your part-time career. Starting preparations now will lead to future peace of mind.