What to do when you have crypto income: ATO guidelines for small business owners
Cryptocurrency is getting really popular in Australia as many businesses and individuals are venturing into this digital platform. The market of this currency is growing faster day by day and is taking Aussies by storm. Therefore, the Australian Tax Office wants everyone to have clear guidance on it. So, if you are dealing with this digital asset, understanding intricacies about crypto taxation is necessary. Whether you are a casual investor or business owner dealing in this currency, you should stay compliant. Thus, a Crypto Tax Accountant Epping can help you understand and guide you about your tax liabilities. Non-compliance with tax obligations leads to potential penalties and fines, so you shouldn’t take it casually.
The Growing Significance of Crypto in Australia
Australia is emerging as a giant player globally in the digital landscape of currency. So, with the rise in adoption, ATO proactively addresses about tax implications of cryptocurrency transactions. Consequently, this surge in popularity of digital currency has intensified the need for guidelines by professionals. They render Cryptocurrency Tax Services Epping and help traders navigate the complex landscape of this digital asset. ATO has classified crypto as a taxable asset, which is subject to capital gains tax. It means when you earn profit on the sale and trading of this currency, you are liable to pay tax. So, individuals and businesses must stay conversant and seek expert guidance.
Basics of Crypto Tax for Australian Individuals
As an individual, if you are tapping into the digital platform of currency, you should have fundamental knowledge. Let’s find below the key aspects of cryptocurrency.
- Pay Capital Gains Tax on Cryptocurrency Revenue
You trigger a CGT event when disposing of your crypto by selling, trading, or converting it into standard currency. Thus, the profit earned from this transaction is considered a capital gain. However, you may also face a loss, which is considered a capital loss. So, during Crypto Tax Filing Epping, you should declare capital gain or loss on the return. You can also get a 50% CGT discount if you hold cryptocurrency for more than 12 months. This ultimately reduces your tax liability by half, leading to a lower tax liability.
Tax Implications of Crypto for Businesses
The digital asset of cryptocurrency is considered trading stock if your business deals in it. Any gain or loss your business has from this trading is considered ordinary income or deductions. For businesses, there are GST considerations for dealing in cryptocurrency. However, the treatment of goods and services tax can vary depending on the nature of transactions. Hence, involvement of an Epping Crypto Tax Accountant is essential for comprehensive guidance. As a business, you may be eligible for tax credits for GST paid on the acquisition of cryptocurrency for business. Also, record-keeping and reporting are necessary as per ATO compliance.
Begin Crypto Dealing with Confidence by Consulting Experts
Kirpa Tax is a leading accounting firm offering comprehensive Epping Cryptocurrency Tax Services. Our team is well-versed in crypto tax guidelines and helps traders with accounting.
FAQ’s
Am I liable to pay tax on cryptocurrency profits?
Yes! You are liable to pay tax on cryptocurrency gains, as it is considered capital gains tax. Contact Kirpa Tax for Crypto Tax Filing Epping, timely and correctly.
How do I mention cryptocurrency income on an ATO tax return?
You should report income earned from cryptocurrency on your tax return under income from other sources. Consult with a Crypto Tax Accountant Epping to seek guidance about it.
What records are needed to file a crypto tax as per the ATO?
You should keep records of transactions, including dates, currencies, volumes, amounts, and receipts. Also, refer to our Cryptocurrency Tax Services Epping to maintain precise records.
Can I offset cryptocurrency losses against other incomes?
No, you should only offset losses from crypto dealing against the capital gains. You cannot settle it against any other income as an individual or a business.
Should I keep records of cryptocurrency dealings?
It is essential to keep records of cryptocurrency transactions for meeting tax compliance. At Kirpa Tax, we maintain record-keeping for Epping Cryptocurrency Tax Services.
Why are accounting services for cryptocurrency important for me?
Accounting services are important for tax computation, transaction recording, tax compliance, and reporting. These services are also important for precise Epping Crypto Tax Filing.
Can you provide digital record-keeping of cryptocurrency?
Yes, we consider using crypto accounting software for separate and precise recording of transactions. We offer tailored advice on your crypto accounting and taxation requirements.