On Track for Your 2024 Tax Return: A Stress-Free Guide for Investors

The curtain has just fallen on another financial year, and Australian crypto investors now find themselves at a familiar crossroads — navigating the complexities of declaring their crypto activities for tax purposes. With the Australian Taxation Office (ATO) intensifying its scrutiny on crypto transactions, ensuring accuracy in your tax declaration has never been more critical.

This year, we’ve partnered with Syla, to provide some tips for a hassle-free tax reporting.

Understanding your crypto tax obligations

Before diving into the mechanics of calculating your crypto taxes, let's address the elephant in the room: Why do crypto investments concern the ATO?

Well, the ATO treats cryptocurrency as a form of property and subjects it to Capital Gains Tax (CGT). This means if you've sold, traded, spent, or gifted crypto, you're required to declare any capital gain or loss from those transactions.

Now, many investors believe that if they don’t withdraw their profits to an Australian bank account, they aren’t liable for tax.

This, unfortunately, is a pitfall you need to avoid.

The ATO requires reporting on all gains, regardless of whether they're converted to AUD or not. Every transaction — no matter how small — needs to be tracked and reported.

Steps to calculate your crypto taxes

1. Collect your transaction history

Record keeping is key. You can start by logging in to your Coinstash account, and downloading a copy of your transaction history from the Transactions page. This statement includes every trade, sale, purchase, and any other transactions which occurred on your account and is designed to meet the ATO record keeping requirements for cryptocurrency.

If you use Syla or another crypto tax software, you can also sync your transactions directly by setting up an API sync directly from Coinstash. This is also a great way to keep track of your tax position through the year.

2. Select the right crypto tax software

When it's time to determine your capital gains or losses — essentially, the fluctuation in value from when you acquired your cryptocurrency to when you parted with it — you need something dependable to avoid unnecessary headaches, a crypto tax software.

When deciding which crypto tax calculator to select, you should consider the following:

• Has the software been designed for Australian tax?
• What is the cost, particularly if you have a lot of transactions?
• Does it do any tax optimisation for you?

We recommend giving Syla a go. It’s an Australian company, and their crypto tax calculator has been designed specifically to handle Australian tax, it also has built-in tax optimisation to help reduce your taxable income.

Strategic approaches to minimise your crypto tax bill

3. Leverage tax-loss harvesting

One effective strategy to reduce your crypto tax liability is tax-loss harvesting. This involves selling cryptocurrencies that are at a loss and using these losses to offset your capital gains. It’s a practical approach that can optimise your tax outcome, but timing and careful calculation are essential. Make sure you’re not doing a wash sale where you sell and immediately rebuy the same assets.

4. Hold assets to benefit from long-term gains

Assets held for over a year typically qualify for a CGT discount — currently, this is 50% for individuals. This means holding your cryptocurrency for the long term can decrease the tax you owe on gains. This strategy requires patience and some tolerance for market fluctuations.

5. Regularly review and plan your crypto portfolio

Effective tax planning shouldn’t happen once a year. Instead, it should be an ongoing process. Regular reviews of your crypto portfolio can help you make informed decisions throughout the entire year. Not only does this prepare you for tax time, but you’ll also align closely with best investment practices.

Accurate reporting to sort out your tax return

6. Lodging your tax return

When it's time to lodge your tax return, accuracy is key. Your tax software will help you to generate a Crypto Tax Report containing all of your tax outcomes. This detailed and precise documentation is invaluable and can be provided to your tax agent, or you can use it yourself to self-lodge your own tax return.

7. Stay informed on regulatory changes

The landscape of cryptocurrency taxation is ever-evolving. Staying updated with the latest ATO guidelines and regulatory changes is crucial and is a responsibility that you need to take seriously. Using software that is always updated to reflect the latest regulations provides you with peace of mind and an assurance of compliance.

Tax wrap-up

As the Australian crypto landscape continues to evolve, so does the intricacy of crypto taxation. But with the right tools and approach, declaring your crypto taxes doesn't have to be daunting. By leveraging the power of crypto tax software, you can embrace the new financial year with open arms and a clean tax slate, knowing that you’re well-prepared to meet your obligations without the hassle.

About Syla

Syla is an Australian crypto tax software and an official tax partner for Coinstash. Created by a team of tax professionals, you can get your ATO crypto tax report which is optimised to save you tax.

• Best value - affordable plans supporting up to 100,000 transactions.
• Maximise your tax savings - using Syla’s proprietary LTFO method.
• Private wealth - support for company, trust and SMSF accounts.

Special offer

Use the code STASH5 at checkout to get your first year of Syla’s Budget Plan for only $5. Valid until 31 July 2024.

Use the code STASH50 at checkout to get 50% off your first year on any Syla plan. Valid until 31 October 2024.

For more detailed guidance on managing your crypto taxes, visit Syla's official website.