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Bitcoin and crypto tax tips for beginners in Australia


Crypto tax confusion: The tools to help save time and money.

Sponsored by Koinly - Make Crypto Less Taxing. Koinly is a crypto tax tool with over 700+ integrations across the top crypto exchanges, wallets and blockchains. Koinly generates reports consistent with ATO guidance, incorporating all your crypto trades, staking, airdrops, and NFTs.
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We've all heard it before. There are only 2 things certain in life: death and taxes. Crypto tax is no exception.

Australian crypto exchanges have a legal obligation to report all customer information and transactions directly to the ATO.

While crypto tax can be a confusing and often overlooked subject, it is an important subject to understand.

But don't worry, we've done the research to help get your head around the world of crypto tax. This guide contains key points on how it works, what your obligations are and how you can potentially save some money come tax time.

We're not tax experts here at Finder, and the information found in this article is no substitute for professional advice. Consider your own situation and circumstances before relying on the information laid out here.

You will need to pay tax – sorry

Remember when you set up your crypto exchange account and completed the KYC verification process? Well, the ATO likely already has your data and trade history.

While this may seem like it's contradictory to the decentralised and pseudonymous nature of crypto, it's actually not. Danny Talwar, head of tax at Koinly, explains.

"Blockchains are inherently traceable and the ATO has data matching programs in place with Australian crypto exchanges. The ATO can obtain information from exchanges and reconcile this with the information you disclose in your tax return."

Basically, all information stored on the blockchain is publicly available for anyone to see, not just the ATO. The crypto investments listed in your tax return can be compared to the information publicly available on the blockchain – and it's worth noting, the ATO has a knack for picking up on discrepancies.

HODLer discounts

As far as the tax office is concerned, Bitcoin and other cryptos (including stablecoins and NFTs) aren't considered money or foregin currency. Instead, they are classed as property.

Being classed as property puts cryptos in the same bracket as shares, collectibles and real estate, making them subject to capital gains tax (CGT). Every time you buy, sell or swap digital assets, it is considered a CGT event.

CGT is added to your taxable income and is charged at your individual tax rate. Keep in mind, if you made substantial gains on your cryptos throughout the year, these profits have the potential to push you to a higher salary tax bracket.

However, there is an upside for HODLers. Holding your crypto assets for longer than 12 months means that you're eligible to claim a 50% CGT discount on any gains.

Let's say you bought a fancy new NFT during a dip in the market and sold for a profit of $2,000 a year later – you're now eligible to utilise the long-term capital gains discount and only income pay tax on $1,000 of those gains.

Cryptos in the red? There might be a silver lining

All too often we hear about people making millions in the cryptosphere – yachts, mansions and luxury cars. However, for the majority of investors, this is not a reality.

Investing in cryptocurrencies is inherently risky. They have proven to be unexpectedly volatile and can quickly catch you offside and out of pocket. So what happens if you decide to pull the pin and sell your digital assets for a loss?

According to Talwar, there might be a silver lining to realising a loss on your cryptos come tax time.

"For investors, losses realised during the tax year can be carried forward against any future gains - a handy way to save on your tax bill."

Perhaps you lost some money investing in crypto in 2021 and decided it wasn't for you. 3 years later the housing market is looking up and you decide it's a great time to sell. You can potentially use those crypto losses from 2021 to offset some of the gains made on your house and cut down your CGT.

Although losses do have to be accounted for at the first available opportunity, there's no limit on how long you can carry forward your capital loss. Capital losses can not be deducted from regular salaried earnings.

Read more: Koinly's Ultimate Australia Crypto Tax Guide 2022

It all counts as income

Much like the internet, crypto is a broad space and encompasses many subsectors. There are traditional cryptocurrencies like Bitcoin and Ethereum, as well as earning opportunities including staking, lending and airdrops – the list goes on.

So where do these crypto niches and yield-earning opportunities fit into the tax equation?

Unfortunately, there is no escape. Tax is applicable to all transactions across the digital asset and currency market.

Although it can seem overwhelming, there are guides available to help you dissect the intricacies of crypto tax.

Sponsored: Use code FINDERYT22 for 30% off your first tax report!New customers only. T&Cs apply.

You can make life easy and automate it with software

So, now we have a good idea about how crypto tax is calculated. But one question remains. How do I go about filing crypto transactions as part of my next tax return?

Thankfully, there is software available that can help all Australians create a crypto tax report in as little as 20 minutes. Talwar helped to explain how this is achieved.

He made the point that most investors don't have just 1 or 2 trades to account for, but often a lot more. While it is easy to rack up a large number of trades, it is also important to properly record your transactions and know what your tax obligations are.

Koinly aims to simplify the crypto tax process. By linking your exchange accounts via an API or connecting to your public wallet address, you're able to quickly import all relevant trading and transfer information across 700+ supported exchanges, blockchains and crypto wallets – directly into Koinly's tax software.

Once imported, Koinly aggregates this information and lets you track your portfolio and preview your capital gains or losses across any tax year.

Before filing your return, you can choose to integrate Koinly's crypto tax information with a third-party tax software or share the information with your personal accountant.

Disclaimer: This information should not be interpreted as an endorsement of cryptocurrency or any specific provider, service or offering. It is not a recommendation to trade. Cryptocurrencies are speculative, complex and involve significant risks – they are highly volatile and sensitive to secondary activity. Performance is unpredictable and past performance is no guarantee of future performance. Consider your own circumstances, and obtain your own advice, before relying on this information. You should also verify the nature of any product or service (including its legal status and relevant regulatory requirements) and consult the relevant Regulators' websites before making any decision. Finder, or the author, may have holdings in the cryptocurrencies discussed.


Tax time is always stressful, especially when there's crypto involved. But with the right tools and information, it's a lot easier to navigate and can save you many headaches and late nights counting numbers.

If you're unsure about anything crypto tax related, it is advised to talk to your personal accountant or the ATO. Additional information and crypto tax guides can be found via the Koinly website or through its customer support page.

Disclosure: The author owns a range of cryptocurrencies at the time of writing

Track your crypto taxes with Koinly

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Name Product Pricing by tier (per year) Supported exchanges
Koinly Crypto Tax Reporting
  • Newbie AUD $49 ⁠— 100 trades
  • Hodler AUD $99 ⁠— 1,000 trades
  • Pro AUD $179 ⁠— 3,000 trades
  • Pro AUD $279 ⁠— 10,000+ trades
Supports all major exchanges
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Koinly generates crypto tax reports built to comply with Aussie tax guidelines for 750+ exchanges, wallets and integrations.

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