With the ATO approaching the 2021 tax return season with a renewed focus on cryptocurrency users, it’s more important than ever to get on top of your crypto taxes.
This blog will outline how best to prepare for the Australian tax season, so that come July 1st you’re ready to roll.
How does the ATO treat cryptocurrency?
In Australia, individuals transacting with cryptocurrency may incur tax liabilities in the form of Capital Gains Tax (CGT) or Income Tax. The type of tax payable (as well as the quantity of how much) will depend on the type of transaction in question.
You can view the ATO’s current guidelines here on what type of crypto transactions are taxable, and what type of tax is applicable. If you have participated in any of the outlined types of transactions, you will need to file a tax return that includes your cryptocurrency activity.
What information will I need to collect for the ATO?
According to the ATO, you will need to keep records of the following in regards to your cryptocurrency transactions:
- The date of the transactions
- The value of the cryptocurrency in Australian dollars at the time of the transaction (which can be taken from a reputable online exchange)
- What the transaction was for and who the other party was (even if it’s just their cryptocurrency address).
You will also need to keep track of:
- Receipts of purchase and/or transfer of cryptocurrency
- Exchange records
- Records of accountant and legal costs
- Digital wallet records
- Software costs related to managing your tax affairs (that’s us!)
By keeping track of everything listed above, your life will be much easier come tax time. You will be able to calculate and meet your tax obligations with ease.
How do I collect this information for the ATO?
You might currently be thinking about the thousands of crypto transactions you’ve executed in the past financial year, and sweat might be pooling on your brow… Lucky for you, this is where we come in! In order to collect the information listed above, all you have to do is use a crypto tax solution like CryptoTaxCalculator!
- Sign up for a free CryptoTaxCalculator trial
- Select ‘Australia’ as your designated country
- Import your data into CryptoTaxCalculator from our integrations with hundreds of exchanges, wallets and chains.
- Take a deep, calming breath whilst CryptoTaxCalculator’s platform does the heavy lifting for you.
- Jump into the ‘review transactions’ tab in-app, and reconcile any necessary warnings.
- Next up is downloading your tax report! Following each of these previous steps will ensure that your final report is as accurate as possible.
- Share your report with your accountant directly from the platform, or complete your ATO tax return yourself by using the final figures compiled in your CryptoTaxCalculator report.
How do I report my Australian crypto taxes?
You’ll need to report any crypto activity that has an impact on your income and capital gains amounts. Both categories will need to be updated with your relevant crypto values in your annual tax return. Australia’s 2021 tax season begins on July 1st 2022 when reports are able to be submitted, with the deadline for filing being October 31st, 2022 (or March 31st, 2023 if filing via an accountant).
Once you’ve downloaded your crypto tax report using our platform, you’ll be able to use the values outlined to file your taxes online with the ATO’s online filing platform ‘myTax’, which is accessible via your myGov dashboard. These values can be added to the ‘capital gains’ section and ‘other income’ section of your submission.
The information provided on this website is general in nature and is not tax, accounting or legal advice. It has been prepared without taking into account your objectives, financial situation or needs. Before acting on this information, you should consider the appropriateness of the information having regard to your own objectives, financial situation and needs and seek professional advice. Cryptotaxcalculator disclaims all and any guarantees, undertakings and warranties, expressed or implied, and is not liable for any loss or damage whatsoever (including human or computer error, negligent or otherwise, or incidental or Consequential Loss or damage) arising out of, or in connection with, any use or reliance on the information or advice in this website. The user must accept sole responsibility associated with the use of the material on this site, irrespective of the purpose for which such use or results are applied. The information in this website is no substitute for specialist advice.
Shane Brunette founded CTC back in 2018 after dealing with his own crypto tax nightmare. He has worked closely with accountants and tax lawyers to make it easy for fellow cryptocurrency users to be tax compliant.