Tax time is just around the corner folks, and while the good people at (insert your school’s name here) might’ve had a lovely ol’ time teaching you about Pythagoras’ theorem and how mitochondria works, it seems teaching you about taxes must’ve slipped their mind – funny, that.
Never you fret you panicked little weasel, we’ve got you covered! So put down that bottle and scooch on a little closer, ‘cos these tips will have you sailing to tax time in the clearest, storm and stress-free waters imaginable.
First, get all your important tax crap together in a neat little pile
Like a frantic squirrel gathering nuts before winter, I’m gonna need you to take a deep breath and get a list of your work-related expenses, a list of all your income, a copy of your previous year’s tax return, any records of sales or purchases in the last year (business or property), your private health insurance deets (if your parents are rich) and your spouse and children’s deets (if applicable).
Once you’ve got all that stuff, you’re already most of the way to stress-free tax time living. Look at you go.
Really think about your work-related expenses
Are you a passionate professional maple syrup reviewer? Well, guess what pal, that four-part DVD series on the history of maple syrup you just ordered can be written off on taxes, as you’re using it for professional development. Isn’t that neat?
If you’re not sure about what you can claim in relation to your specific field, do a bit of digging online – every profession has its own unique work-related expenses. And if you’re in any doubt, make sure to consult an expert, which brings me to my next point…
Summon the wise ones
I know it can be tempting to handle things yourself because you’re a pretty big wheel down at the cracker factory and asking for help will diminish not just your own self-respect but the little remaining respect your wife has for you – but trust me it’s worth it!
Tax agents can help you get the most out of your tax returns and can ultimately save you money in tax deductions you might’ve missed on your own. Plus, the accountant fee itself is tax-deductible, so you might as well take the (kind of) free help.
Don’t forget about your crypto tax
Over 1 million Australians over the age of 18 now have some sort of investment in cryptocurrency – with an average investment of just over $20,000. That’s a fair chunk of people.
Don’t fall into trap of thinking crypto is non-taxable – all crypto is taxable when you sell, gift, transfer and spend it. Yep, even when transferring from Bitcoin to other cryptocurrency including stablecoins.
Regardless of how many exchanges, or which wallets or chains you transact with, whether centralised, decentralised, custodial, non-custodial, hot or cold, Ether, ERC-20 tokens, BEP-20 tokens or NFT – the ATO is gonna wanna know about all of it. In fact, old mates at the ATO can already find out — as they have Data Sharing Programs in place with exchanges.
Danny Talwar, Head of Tax at Koinly says “Crypto holders have got to be aware of the ATO’s expectation to keep records of all crypto transactions ready for tax time. As Aussies generally hold crypto in multiple wallets and exchanges”.
Penalties for non-submission and deliberate understatements come tax time are severe, and can be up to 75% of the outstanding tax liability plus the outstanding tax itself plus interest.
An easy way to way to avoid this is to use a portfolio tracker like Koinly – a tax accounting platform that can help you with tax planning and staying on top of all your crypto. So you can spend less time worrying about your crypto and more time sampling the finest maple syrup this planet has to offer.
With over 600 integrations with wallets and exchanges, Koinly produces a fully compliant CGT report from multiple exchanges as well as calculating the cost basis for all transactions in just a few minutes.