Coinstash Crypto Tax Guide 2024

Sold some bags in the last bull run? This guide will clear up any tax-related questions and give you a complete understanding of how to handle your crypto taxes for 2024. Stay informed and ensure you're meeting your tax obligations with ease.

Do I Have to Pay Tax on Crypto in Australia?

Yes, cryptocurrency is taxable in Australia. The ATO considers crypto assets like Bitcoin as property, subject to capital gains tax (CGT). When you sell, trade, or dispose of your cryptocurrency, you'll need to pay taxes on any gains made. Understanding these tax obligations ensures compliance and helps you make more tax-efficient decisions for your crypto investments.

Do I Need to Declare Small Crypto Amounts?

Yes, you must declare all crypto transactions, regardless of the amount. It’s a legal obligation to report every transaction to the ATO, no matter how small. Declaring even minor amounts ensures compliance, maintains transparency, and helps avoid potential penalties in the future.

Can I Claim a Crypto Loss on My Taxes?

Yes, you can claim a crypto loss, and it can be more beneficial than you think. Declaring your crypto loss creates a capital loss that can be carried forward indefinitely, allowing you to offset future capital gains. This reduces your taxable income in later years, making today’s losses a smart strategy for future tax efficiency.

Tax implications of Coinstash transactions

Understanding how different types of transactions on Coinstash can impact your tax obligations is crucial:

- Fiat to crypto trades: When you exchange fiat currency for cryptocurrency, it's not a taxable event. However, when you later dispose of the crypto, it will be a CGT event and you’ll need to calculate the tax outcome.

- Tax on Bundles: Coinstash offers a unique feature, 'bundles', allowing users to buy a diversified portfolio of cryptocurrency in a single transaction. Bundles work the same way as individual trades, except there’s more of them. Each crypto within the bundle will be subject to CGT upon disposal.

- Coinstash Earn and tax on rewards: Crypto rewards earned through Coinstash are considered taxable income at their market value on the day they are received. The taxation of crypto rewards points is still a relatively new concept, and while the ATO has yet to release specific guidelines, existing rulings regarding similar rewards programs can provide some direction. The ATO's ruling on frequent flyer programs, for instance, offers an analogous situation that you can look at to get a deeper understanding.

Calculating capital gains on crypto

Calculating capital gains on cryptocurrency in Australia involves a few steps. Here's a simplified guide to help you understand the process:

1. Identify the cost basis: The cost basis of your cryptocurrency is the amount you initially paid to acquire it, including any associated costs such as fees or commissions.

2. Calculate the proceeds from the sale: This is the amount you received when you sold the cryptocurrency. If you traded it for another crypto, then the market value of the new crypto at the time of the trade is used.

3. Calculate the capital gain or loss: Subtract the cost basis from the proceeds of the sale. If the result is positive, you've made a capital gain. If it's negative, you've made a capital loss.

4. Apply any discounts: If you've held the cryptocurrency for more than 12 months, you're eligible for the 50% CGT discount. In practice, you may only need to pay tax on 50% of the capital gain.

5. Aggregate your capital gains and losses: Add up all your capital gains and losses from all your cryptocurrency transactions within the tax year and apply the 50% CGT discount where eligible. If the total is positive, you have a net capital gain and will need to pay tax on this amount. If it's negative, you have a net capital loss which you can carry forward to offset future capital gains.

Remember, cryptocurrency tax calculations can get complex quickly, especially with numerous transactions. Using specialised crypto tax software like Syla can save you time and ensure accuracy.

How to pay less tax on your crypto

There are several strategies to optimise and save tax on your crypto investments:

- Claim the 50% CGT discount: If you hold your cryptocurrency for over 12 months, then as an individual, you can claim a 50% CGT discount. This is the most important tax incentive for achieving long-term wealth growth in Australia.

- Parcel matching: FIFO (First-In, First-Out) is a common method for tracking your crypto sales, but it's not always the most tax-efficient. In Australia, almost any parcel method can be used, so it's best to choose the one that results in the lowest tax. Syla pioneered the use of an algorithm called LTFO (Lowest-Tax First-Out), that selects the most tax efficient parcel to dispose, and helps Coinstashers to save on tax.

- SMSF tax environment: When appropriate, a Self-Managed Super Fund (SMSF) can provide a highly tax-efficient setting for amassing retirement wealth. With the favourable tax concessions offered within an SMSF, you could benefit from effective tax rates as low as 10% on long-term capital gains, and even 0% once you reach retirement. Interestingly, an SMSF is the only way to invest your superannuation funds directly into cryptocurrency. If you're comfortable with a longer-term strategy and can wait until retirement age, this approach can prove highly beneficial for many Australians.

- Company and trust structures: A company structure may offer a lower corporate tax rate of 25% or 30% for trading activities, while a trust structure can provide income splitting opportunities, often making it suitable for larger investment portfolios.

How do I calculate my taxes?

Calculating capital gains can be complicated due to the complexity of the calculations and the quantity of crypto trades. That's why we recommend using crypto tax software like Syla. It offers an accurate, time-saving solution that not only ensures you comply with ATO guidelines, but also leads to lower tax outcomes.

How do I lodge my tax return?

With your calculations ready, it's time to lodge your return:

- Sign up for an account on Syla.

- Download your trading history and savings history from Coinstash and import it.

- Download your ATO-compliant Crypto Tax Report.

- Lodge your tax return through myTax (on myGov) or use a tax agent.

What If I haven't lodged for the last two years?

If you've neglected your crypto tax obligations in the past, it's still possible to lodge your old tax returns or amend prior years. It's crucial to get up to date as soon as possible to avoid penalties. It's recommended to use a tax professional in this case to ensure you're meeting all ATO requirements.

Deadline for lodging your tax return

The usual deadline for lodging tax returns in Australia is October 31.

If you're using a tax agent, you can get this deadline extended to 15 May. If you're unable to meet the deadline, it's crucial to apply for an extension or contact the ATO to discuss your situation.

About Syla

With up to 47% of your crypto gains going to the tax office, it's clear that tax has the most significant impact on every crypto investment portfolio in Australia.

Syla, an Australian-only crypto tax software, has been developed by tax and legal professionals. It has Australia’s most accurate crypto tax calculator module, that minimises tax using an LTFO (Lowest-Tax First-Out) algorithm, purpose-built for Australian crypto investors.

Easily import your trading history into Syla and optimise your crypto tax without needing to be an expert. After generating your ATO-compliant Crypto Tax Report, you can use it to complete your tax return through myTax (on myGov) or provide it to your tax agent.

With support for up to 10,000 transactions at a single low flat-fee, Syla is Australia's most affordable crypto tax software, ensuring you pay the lowest crypto tax.

To help you get started, Syla is offering a special discount for Coinstash users. Use the code STASHTAX for a 30% discount and start saving on tax.