Crypto Tax Planning
Have you dived into the world of crypto? With digital currencies becoming so popular, understanding crypto tax accounting and how it works has never been more important.
At Prosperity Associates, we're constantly staying on top of the latest trends in cryptocurrencies and working on strategies to help you with your tax return. If you're struggling to sort out your taxes and require some advice on doing so, get in touch with our crypto tax accountant in Sydney.
Your Crypto Tax Agent in Sydney
If you've bought or sold cryptocurrency in the last financial year, you must ensure that all your transactions are correctly reported to the ATO. However, this process can be confusing and difficult without the help of a crypto tax accountant in Sydney.
At Prosperity Associates, we can help you maximise your return without getting into any risky situations.
There are many reasons why you should rely on a crypto tax accountant in Sydney, like Prosperity Associates. Our crypto tax accounting services can:
Maximise your return
if you're looking to get as much money back as possible during tax time, then Prosperity Associates will ensure you claim every deduction necessary, especially regarding your crypto tax needs. Contact us now for crypto tax help in Sydney.
Ensure you fulfil your tax obligations
Making sure you don't break the law by notifying the Australian Taxation Office of your financial gains and losses is crucial. Severe penalties are imposed on tax evaders. Hence, not knowing how to claim your tax on crypto can be risky. However, a crypto tax accountant in Sydney can help you satisfy the necessary requirements.
Support you with overly complicated crypto tax
Cryptocurrency is relatively new. This means understanding the tax rules that apply to these digital coins may be difficult for the average person to grasp. Use a crypto tax accountant in Sydney for help in following the latest guidelines from the ATO.
Ensure you feel less stressed
Don't waste time filing your tax return yourself. The process can be time-consuming, overly stressful, and a real hassle. Hence, using a crypto tax agent in Sydney can make the process quicker and easier.
Crypto Tax in Sydney - Frequently Asked Questions
How does crypto tax work in Australia?
In Australia, the government does not consider cryptocurrency as money or foreign currency. Instead, it is seen as an asset that attracts capital gains tax (CGT) and income tax.
The ATO will classify all crypto users as either an investor or trader for taxation purposes. An investor will buy and sell crypto to build wealth over time as a personal investment. Most Australian crypto users are investors as they aim to make a profit through long-term capital gains. Alternatively, a trader is someone who uses crypto to generate income and function as a business.
Understanding your tax obligations as either an investor or trader can be difficult. Make it easier by seeking assistance from a crypto tax accountant in Sydney.
How much capital gains tax will I pay on crypto?
According to the ATO, when selling crypto for fiat currency, such as the Australian dollar, capital gains may tax apply.
A crypto capital gains tax (CGT) event occurs when disposing of cryptocurrency and therefore you will need to pay capital gains tax when you:
- Sell or gift cryptocurrency
- Trade or exchange cryptocurrency
- Convert cryptocurrency to fiat currency
- Use cryptocurrency to obtain goods and services
Calculating how much capital gains tax you pay will depend on each individual situation. If you are a trader or acting within a profit making venture, you might alternatively pay taxes on your net profit instead of CGT – but this is neither a simple matter nor always the worse outcome versus CGT. We test and consider all three methods of calculating your tax position to accurately portray your unique situation and optimise your tax efficiency where possible. Therefore, it is best to consult with us at Prosperity Associates, to figure out what is optimal for your situation. Contact us today for more information.
Can I reduce the amount of tax I'll pay on cryptocurrency?
You can utilise specific strategies to reduce the tax you pay on cryptocurrency. Some recommended tactics from our crypto tax accountant in Sydney include:
- Holding onto your cryptocurrency for more than 12 months – because the ATO considers crypto as an asset, holding onto it for more than 12 months will make you eligible for the Capital Gains Tax (CGT) discount. Hence, you can reduce your capital gain by 50% when you sell or dispose of an asset.
- Making the most of your reductions – Reduce the amount of tax you pay by managing your finances and keeping track of your spending. You can deduct many crypto-related items on your tax return. Talk to us today to find out more information.
- Seek advice from a crypto tax accountant in Sydney – As cryptocurrency is still relatively new, you must seek assistance from professionals who understand the space. Prosperity Associates is a crypto tax accountant in Sydney who will help you along your crypto journey.
How is tax on cryptocurrency calculated?
The calculation of tax in cryptocurrency depends on many variables. Although a virtual currency, it is still considered an asset. Hence, to understand how your tax will be calculated, you must know whether you are an investor or a trader.
If you're making money through crypto, then you will be taxed accordingly. Hence, you will always be taxed based on your marginal income tax bracket and the money you generate annually. Therefore, the more you make in terms of financial gain with crypto, the more you will be taxed. Contact us today for more information on crypto tax in Sydney.
How do I declare my crypto earnings?
You must report the disposal of cryptocurrency for capital gains tax reasons.
Disposing occurs whenever you:
- Exchange one cryptocurrency for another
- Trade, sell or gift cryptocurrency
- Convert cryptocurrency into a fiat currency (for example, Australian dollars)
Declaring your cryptocurrencies and the activity related to it can be done at tax time every year. Talk to our crypto tax accountant in Sydney for more information.
Crypto Tax Help Sydney
As the popularity of cryptocurrencies continues to grow, so does the need for experienced crypto tax accounting professionals who understand the unique challenges posed by this new asset class.
The team at Prosperity Associates has a deep understanding of the tax implications of cryptocurrency transactions and can help you to ensure that you are compliant with all relevant tax laws.
Whether you are buying, selling, or holding crypto assets, Prosperity Associates can provide the crypto tax accounting guidance and support you need to stay on the right side of the law. If you need crypto tax help in Sydney, contact us today to find out how we can assist you.