Crypto currency and your tax return, some Tips for you.
Use a Crypto Tax Calculator:
Calculating taxes for crypto transactions can be difficult and time-consuming. To make sure everything is accurate and follows ATO rules, it’s best to use a Crypto Tax Calculator. It works with over 800 exchanges and wallets, making it easy to import your transaction data and generate tax reports.
Remember that Crypto-to-Crypto Transactions are Taxable
Some people think that trading one cryptocurrency for another (like Bitcoin for Ethereum) isn’t taxable, but that’s not true.
The ATO considers this a taxable event, so make sure your clients know this.
Set Aside Money for Taxes
It’s easy to forget about the tax implications of crypto transactions until it’s too late. To avoid any surprises, advise your clients to set aside a percentage of each transaction into a separate ‘tax’ account or fund. This way, they’ll have money saved up when it’s time to pay their taxes.
Know the Difference Between Personal Use and Investment
The ATO treats cryptocurrency used for personal consumption (like buying something) differently than cryptocurrency kept as an investment. Make sure your clients understand the difference because it can affect their tax obligations.
Plan Ahead and Check-In Regularly
Cryptocurrency markets can be unpredictable, which can affect capital gains and losses. By proactively managing their taxes and checking in regularly, your clients can optimize their tax outcomes.