Nugget’s News is a proud partner of Crypto Tax Australia. To receive a 10% discount on all CTA services including the preparation of your crypto tax calculations and tax returns, use the link below. Thanks for this timely advice, Adrian!
The final lodgement due date is fast approaching and before you know it, the May 15th tax deadline will be here. This is only 5 weeks away.
This article is to inform you of the facts of holding off or not declaring your crypto investments or trading. We are not interested in scare tactics and only want to make you aware.
What the ATO is doing
The ATO has already contacted the Australian exchanges and has asked for sample data on who have used their platform.
All Australian exchanges required customers to complete a KYC check to get started so the ATO may already may have your details and are waiting to see if you declare any crypto investing or trading in your tax return this year.
This means that they may already or soon will, have your name and the amount of money you invested.
Australian exchanges need to be registered with both ASIC and AUSTRAC. AUSTRAC is an Australian Government financial intelligence agency that was set up to monitor financial transactions. It specifically looks to identify money laundering, tax evasion, welfare fraud, terrorism and organised crime.
What does it mean for me?
If you intentionally do not include your crypto investments and trading in your tax return you can get hit with a penalty for not declaring (up to 75% of the potential tax bill) on top of what you may owe, plus interest.
You may be thinking, ‘but I made a loss on my investment and trading so do I still need to declare?’ The answer is YES, and the question to you is, If you have lost money during this year long bear market, then why are you denying yourself a capital loss or greater refund?
Why it’s crucial that you declare and lodge on time
The main reason why you want to lodge on time is to avoid the following:
- A late lodgement mark will be added to your taxpayer history which could influence any decisions or leniency requested from the ATO in later years.
- The ATO may issue a penalty letter as well as any interest on the potential payable position (see above)
- The lodgement due date is brought forward for the 2018/2019 tax year, EVEN if you are registered with a tax agent. Meaning, if you lodge late this year, the due date will be brought forward for your next tax lodgement due date and payment to the 31st of October 2019. This of course reduces your ability to plan in advance or be entitled to the concessional lodgement date being 15 May 2020.
You may for some reason have a large tax bill to pay in this current financial year. i.e. from trading, selling of a investment property or the like, so would it not suit you to have the money sitting in your bank account for a little longer than the ATO’s?
Lets say you do not declare this year, the scenario may play out that the ATO will issue you a letter of demand asking you to declare any profit or loss that you generated from your Crypto investing after obtaining evidence from the Australian Exchanges.
If ignored, The ATO may issue you a penalty for not declaring (up to 75% of the potential tax bill) on top of what you may owe, plus interest, as well as issue an amended notice of assessment based on what they think. (this will most likely not be in your favour)
What we do (Crypto Tax Australia)
We know that having to declare your crypto trading and investing can be a daunting task and that’s why we provide a comprehensive solution to your crypto activities, whether you’re a HODLer, day trader, ICO investor, margin or CFD trader, whether you made a profit or a loss, and even if you were scammed on ICOs or Ponzi-type schemes,
Your average accountant probably doesn’t understand crypto.
You don’t want to be going to your accountant explaining to them what a Bitcoin, a wallet or an exchange is.
This will waste your time and money while they charge you to research everything there is to know about it. And after all of that are you confident in what they have prepared?
Alternatively if you’re doing it yourself, are you confident in what you have prepared?
I would be asking myself:
- Are all trades, withdrawals, deposits and ICO’s accounted for correctly?
- Am I confident about whether I have classified myself correctly as a trader or an investor?
- Are the calculations when preparing my business schedule or capital gains report in my tax return correct and do I have the right values?
- Has the margin trading and CFD trading been reported correctly? (Bitfinex and Bitmex)
- Are there any more expenses that I can possibly claim to decrease my profit as much as possible?
- If an ATO auditor was sitting across the table from me, would I be confident in handing over my calculations?
We resolve all of these types of transactions and have dealt with almost any situation over the course of the hundreds of tax returns and calculations we have completed.
How we can help
If you still need to declare your Crypto investments or trades and have either lodged without declaring or are yet to lodge your tax return I would do so ASAP.
We can ensure that your tax return is lodged on time, all investments are accounted for correctly and take advantage of the insights we have in this specialised area to ensure you are claiming as many deductions as possible to reduce any potential gain, or maximise the loss of your trading and increase your refund.
We are always happy to have a chat about your personal circumstances and how you can benefit from declaring even if you have made a loss during the 2018 financial year.
If your still unsure or want to have a further chat on how we can assist, do not hesitate to give us a ring or contact us online.
Adrian Forza CPA – Crypto Tax Australia