Crypto trading? Here’s what you need to know
Did you know that a surprising number of people are actually unaware of their tax obligations surrounding crypto trading? You’re not alone!
Wait, there’s tax obligations on my cryptocurrency?
As a result of not understanding the tax laws surrounding this relatively new enterprise, many people have failed to declare their cryptocurrency trading activities correctly. But don’t worry, our friendly team at Accounting Tax Solutions have specific knowledge in cryptocurrency trading tax obligations to help you.
Tax obligations don’t only exist when you cash in.
Many people believe that cryptocurrency gains are tax free or only taxable once cashed in. This is simply not true. Many others believe that due to the anonymous nature of cryptocurrency trading, their movements are not traceable, but in fact, the ATO have access to more data and the ability to track those investing very closely.
The ATO does have the means to audit your crypto trading activity.
If you are not eager for an audit from the ATO or potentially penalties, then Accounting Tax Solutions can help. We are one of the few accountants on the Gold Coast that offer specific cryptocurrency solutions and support, so if you are involved in crypto-trading it is important to work with an accountant who has knowledge in this field.
How we can help you!
Accounting Tax Solutions are here to help our clients on the Gold Coast and throughout Australia, trade with confidence knowing they are fully aware of their tax obligations and have the best tax minimisation strategies in place.
Your tax obligations are treated differently depending on your situation, namely:
- Capital gains and losses
If you hold your individual crypto assets for more than 12 months, then capital gain discounts are available to you as an individual.
- Investment gains and losses
If you are trading only occasionally but not holding each crypto asset for 12 months or more, then be aware that no discounts or offsets are available.
- Business trading
There are business offsets that can be available on profits if your trading activities meets the ‘business tests’
Minimize your tax bill…
If you’re interested in minimising your tax to pay each year, especially if you are making considerable amounts of money through wise cryptocurrency trading, then our accountants at Accounting Tax Solutions can provide you with the solutions on how to achieve this.
Hints and Tips for crypto tax reporting
If you have only traded or swapped a few coins (less than 10) during the financial year, then we or your accountant would only require the csv transaction file from your Platform (exchange). Ensuring that any sells show the buys, if purchased in an earlier year, for capital gain calculation purposes. In addition to the csv file, please provide any year end reports your platform (exchange) produces.
If you use binance exchange, their reporting is not simple regardless of the number of transactions and therefore to keep your tax agent fees to a minimum you must use either Koinly or Crypto Tax, or similar to obtain the necessary tax reports.
The cost of these subscriptions is tax deductible. See links here:
For any trading activity above 10 per year, you must provide a Koinly or Crypto Tax report or similar to us or your Accountant. ( Crypto Tax , Koinly ) The cost of these subscriptions is tax deductible.
Be proactive and get in touch
Your investment with us to assist you with your Crypto Tax enquiries start from $99 per half hour, or part-thereof, which of course is tax deductible. Get in touch with us today.
Get in touch with Accounting Tax Solutions today via our contact us page or call us on the phone number below, to discuss your crypto trading tax obligations and how to correctly declare and minimise your tax, so that you can confidently invest and make significant profits for your future.