Tax time is upon us, another Financial Year is done. Last year brought about the tech-sperts among us, and many of us took a punt in Cryptocurrency. But how does crypto affect your Tax? You might be shocked to discover that trading in Cryptocurrency is actually similar to buying and selling Shares. Both transactions are treated as Capital Gains/Losses and must be included in your tax return. The ATO have their sites on this, so it is important to get it right! To add salt to your wounds, the calculation of your Profit on your cryptocurrency isn’t as straight forward as you might think. As a very complicated area, it is recommended that you seek specialist advice. This can mean that your small windfall is completely eaten up by professional fees. This is not ideal for anyone! A hot accountant tip for this year is to look for companies that specialise in providing Capital Gains Reports that you can provide to your accountant. Why is this preferable over just providing the CSV to your Accountant? An accountant usually charges based on complexity, but also a significant factor to time. It takes time to calculate large volumes of trades, whereas there are companies out there that have specifically designed their software with complex algorithms to instantly sort your data, some for as little as $50! Do your research though! One of our members, a local accountant in the area has mentioned they have had clients have great success with Crypto Tax Calculator , and Koinly: Crypto Tax Calculator for Australia & NZ, but there are many businesses out there.
For more information on how the ATO regard Crypto, check out the ATO’s webpage Transacting with cryptocurrency | Australian Taxation Office (ato.gov.au).