If you’ve caught the digital currency bug and bought or sold any cryptocurrency in the past financial year, you’ll need to make sure all your transactions are properly reported to the ATO.
However, understanding and meeting your crypto tax obligations can be confusing and often downright difficult, so you may need to ask an expert for help. Cryptocurrency tax agents and accountants can use their specialist knowledge to ensure that you maximise your return without ending up in the ATO’s bad books.
Keep reading for details on how to find and compare cryptocurrency tax specialists in Australia.
Find a crypto tax accounting specialist in Australia
This is a complex and novel tax area. The crypto tax calculator is provided as general information only and we recommend that you seek independent tax advice. The crypto tax calculator does not purport to be a complete statement of all Australian income tax implications that may be relevant to crypto transactions. The Australian income taxation implications may vary depending on the individual circumstances. We recommend obtaining personal and specific tax advice prior to the lodgement of your income tax return.
Yes. While the rules surrounding cryptocurrency and tax in Australia are complex, you need to be aware of a few crucial points:
If you buy and hold cryptocurrency as an investment, you’ll be taxed on any capital gains you make when you dispose of those digital coins or tokens.
If you’re a professional trader who trades cryptos for profit, those profits form part of your taxable income.
Any profits you make from mining cryptocurrency form part of your assessable income.
Why should you consider getting help from a cryptocurrency tax specialist to lodge your tax return? There are several reasons:
Maximise your return. If your number-one goal at tax time is to get as much money back as possible, a tax agent can help ensure that you claim every possible deduction to which you’re entitled and that you receive advice tailored to your specific crypto tax needs.
Ensure that you don’t break the law. Making sure you fulfil your tax obligations to the ATO is crucial. Severe penalties can be imposed on tax evaders, so using a tax specialist can help ensure that you satisfy all the necessary requirements.
Crypto tax is complicated. As cryptocurrencies are still such a new asset class, the tax rules that apply to these digital coins and tokens are still being developed and may be difficult for the average crypto buyer to understand. For example, did you know that capital gains tax (CGT) applies to crypto-to-crypto trades, even though any gain you make may not yet have been realised in Australian dollars? Using a trusted crypto tax specialist helps ensure that your return is filed in line with all the latest guidance and rulings from the ATO.
Less stress. Submitting your tax return yourself can be a time-consuming, stressful hassle, so using a cryptocurrency tax agent or accountant can make the process quicker and easier.
Tax-deductible expense. Yes, you’ll have to pay a fee to use a tax agent or accountant, but you can claim this expense as a deduction on your tax return for the following year.
What’s the difference between a tax accountant and a tax agent?
The term “accountant” can be used to refer to a professional who performs a variety of roles ranging from tax accountants and financial accountants to management accountants.
Tax agents are accountants that specialise in preparing and lodging income tax returns. Anyone who charges a fee to prepare income tax returns must be a registered tax agent, which means they are registered with the Tax Practitioners Board and licensed to provide tax services to the general public.
How can I choose a cryptocurrency tax agent?
As with so many other things in life, the key to finding a good tax agent is to shop around. There’s certainly no shortage of options to choose from, so it’s worth taking the time to compare several agents before making your final decision.
Looking at an agent’s experience, qualifications and knowledge concerning crypto tax matters should help you narrow down your choices, but meeting with an agent should help you find the right person for you. A good tax agent will ask lots of questions about your financial situation, and encourage you to ask your own questions so you can get a better understanding of your tax obligations.
This process should help you find someone with the right knowledge and skills to help you maximise your return.
What to consider when choosing a cryptocurrency tax agent
When comparing cryptocurrency tax specialists to find one that’s right for you, make sure you consider the following factors:
Are they registered? First and foremost, make sure the tax agent is properly registered with the Tax Practitioners Board.
How much experience do they have? Consider how long the tax agent has been operating and what sort of qualifications they have behind them.
Do they specialise in cryptocurrency tax? Cryptocurrency tax is a relatively new area and some accountants or tax agents may not be fully up to speed with all the relevant rules and requirements. Find out what level of understanding and experience an agent has with digital currency before deciding to use their services.
Do they specialise in any other areas? For example, does the agent focus on filing tax returns for individuals, SMSFs, small businesses or some other target market?
What are their fees? Cost should never trump all other factors when choosing an agent, but it’ll no doubt be something you want to consider.
How do they provide their service? Will the agent provide their service in person, online, over the phone or as a combination of any of these methods?
When are they open? Will you need an agent that’s open on weekends or outside normal business hours? If you’re using an online service, how and when can you get your questions answered?
Do they have a good reputation and positive reviews? Can you find any independent reviews from past clients? Has a particular agent been recommended by a friend or family member?
By doing a little research and asking the right questions, you’ll be well placed to find the right agent to help you complete your cryptocurrency tax return.
Can I calculate and file my own cryptocurrency tax?
You could sign up for cryptocurrency portfolio tracking platform. Some platforms sync with your exchange accounts to track your capital gains and losses to calculate how much tax you'll be paying.
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.
Images: Shutterstock
Disclosure: At the time of writing, the author holds ADA, ICX, IOTA and XLM.
Tim Falk is a writer for Finder, writing across a diverse range of topics. Over the course of his 15-year writing career, Tim has reported on everything from travel and personal finance to pets and TV soap operas. When he’s not staring at his computer, you can usually find him exploring the great outdoors.
A comprehensive review of CoinTracking, the portfolio manager that aims to make it easy to track all your digital currency trades and simplify tax time for crypto buyers.
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