For someone in the USA what is the easiest way to convert bitcoins to usd while incurring minimal fees. I've heard of using mtgox with dwolla, or mtgox with internation wire transfer. But it strikes me as tedious to use dwolla. Why isn't there something like direct deposit, simple and fast?
I recommend using the services of a user on LocalBitcoins with a high rating and high number of transactions completed.
You don't. In some cases, you may have to pay capital gains tax on that, which I think is running around 14%, but it depends on a few factors that only your CPA can answer. Well, you might be able to go unnoticed if you meet a guy in a cafe and he hands you cash, which is where localbitcoin type places on the web can hook you up.
Another route is to find a service that can get you Amazon and Walmart gift cards. See, with Walmart in the USA, you can even use the gift card at some select locations where they have a "Murphy's" out front in order to get fuel, and you already know some Walmart locations have grocery stores inside. So, if your major daily expenses in life are rent/mortgage, major purchases (requiring a loan, like a car/SUV/truck), groceries, fuel, and "stuff", then between Walmart and Amazon you can handle all that except the rent/mortgage and major purchases.
There are services to give anonymous ATM VISA cards like XMLGold.eu, but the IRS probably won't like that. Still, after I emailed and asked just because I was curious, XMLGold will definitely stick one in the mail or FedEx if you want, and even ship to the USA. Legal compliance, they realize, is your own deal.