Sydney, Australia, Sept. 30, 2019 (GLOBE NEWSWIRE) -- As the Australian Taxation Office begins its crackdown on cryptocurrency trading, many everyday owners, traders, and investors in crypto could be at risk. Earlier this year the Australian Tax Office (ATO) announced that it will be allocating a billion dollars to track down and fine those who haven’t filed taxes on their crypto activity. With Bitcoin and other cryptocurrencies bouncing back this year, it’s likely many, perhaps you, will owe capital gains taxes.

The government announced that it will be partnering with both Australian cryptocurrency trading platforms as well as global ones in order to obtain information about users. It will use this data to track down and fine those who don’t make tax filings of their own accord. Many falsely believe that cryptocurrency transactions are untraceable; but by requiring platforms to report on their users as well as hiring blockchain forensics companies, the government has its bases covered. Do you?

The ATO announced that it will be running a data matching campaign by collecting bulk data from Australian cryptocurrency designated service providers in order to identify exactly who owes taxes to the government. Deputy Commissioner, Will Day, stated for the press that “the ATO uses third party data to improve the integrity of the tax system by identifying taxpayers who fail to disclose their income details correctly.” He continued by saying that “this data will be collected under notice from the DSPs on an ongoing basis.” The ATO has every intention to keep cryptocurrency ownership and use regulated in order to support legal transactions and to enact taxation.

About 4% of the Australian population owns or has owned cryptocurrency, according to the government. This means up to a million people could be affected by the ATO’s action. If you are one of these people or you know someone who is, consider the consequences of not filing your capital gains taxes on cryptocurrency.

The government announced that it expects a $3 billion return on its $1 billion campaign. Where does it expect this money to come from? Fees and fines on cryptocurrency traders who do not report their capital gains. The government announced that tax avoiders can expect fines or even jail time depending on the severity of the crime. Traders can avoid the risk and stress by reporting capital gains and income from cryptocurrency trades on their tax return.

On the other hand, let’s say that a crypto owner lost money on his or her sale of cryptocurrency. How would that work? Let’s say that someone buys bitcoin at 5,000 AUD and then it drops to 3,000 AUD but they still need to sell it. At the end of the year, when filing taxes, that person will have what is called a capital loss. Because cryptocurrency is a capital asset, when it is sold at a lower price than it was purchased at, the owner is entitled to tax benefits. Essentially, whenever someone has capital losses, they can use those capital losses to offset the taxes they need to pay on gains from other assets such as stocks and bonds. However, these capital losses can only be used to offset paying specifically capital gains taxes, not just any tax. For more information on capital gains and losses, look at this article by the ATO (here). Although you need to file regardless of whether you made or lost money, it’s an added benefit because there could be an economic benefit to you doing so.

To clarify: the events that trigger capital gains and losses are unique when talking about cryptocurrency. There are certain events having to do with crypto that are considered capital gains or losses. On the other hand, if no triggers happen and one holds their currency through the tax year without selling, purchasing or trading, even if the currency triples in value, they will not have capital gains because they have not sold the asset. From the ATO’s website: “A Capital Gains Taxation (CGT) event occurs when you dispose of your cryptocurrency. A disposal can occur when you:

sell or gift cryptocurrency

trade or exchange cryptocurrency (including the disposal of one cryptocurrency for another cryptocurrency)

convert cryptocurrency to fiat currency (a currency established by government regulation or law ), such as Australian dollars, or

use cryptocurrency to obtain goods or services.

If you make a capital gain on the disposal of cryptocurrency, some or all of the gain may be taxed. Certain capital gains or losses from disposing of a cryptocurrency that is a personal use asset are disregarded. If the disposal is part of a business you carry on, the profits you make on disposal will be assessable as ordinary income and not as a capital gain. While a digital wallet can contain different types of cryptocurrencies, each cryptocurrency is a separate CGT asset.” For more information, please find the article attached here.

So now that you’ve decided to file your cryptocurrency taxes, how exactly does it work and what is deterring you? To file cryptocurrency gains or losses, one must take into account every single transaction, the cost in fiat of the coin, and the gain or loss of that trade. For those of you with many transactions, this quickly turns into a huge headache.

At first glance it might seem hard to file accurate taxes on your trades, and nearly impossible if you didn’t keep records. Don’t worry though, Australia Crypto Tax is here for you. This innovative company has created an easy solution that can calculate your capital gains or losses quickly and accurately.

It’s as easy as:

Create an account; Upload your trades; and Download your report.

Are you still nervous? Don’t be. Australia Crypto Tax has screen by screen tutorials for each exchange and it will walk you through every click of the way. For Australian citizens specifically, no worries about USD to AUD conversions - you may import trades from USD exchanges and download a report from the application in AUD to provide to the Australian Tax Office (ATO).

Head over to AustraliaCryptoTax.com to learn more about crypto taxes in australia and write off your crypto tax losses today!

*Accountants and other corporate clients or potential partners who would like to discuss customized implementations and service are encouraged to contact us with inquiries, as well as individual filers.

Attachments

Rick Jeffries Get Crypto Tax (949) 525-5572 press@getcryptotax.com