The ATO has set out clear guidelines on how crypto buying, selling and mining is taxed. If you’ve bought or sold cryptocurrency in the last financial year, you will need to declare your crypto totals on your income tax return.
The Australian tax year runs from July 1 - June 30 the following year. If you are lodging your own tax return for July 1, 2020 – June 30, 2021, it needs to be filed by October 31, 2021. Lodging through an accountant? You have until March 31 2022 to file.
Filing with myTax
Once you, or your accountant has calculated your crypto tax (we have an app for that!), the easiest way to file your taxes is online using myTax, available from your myGov dashboard.
From your myGov dashboard
Select ATO myTax (you need to have previously linked your ATO profile to myGov. See steps here.)
From your myTax dashboard select Tax from the top navigation.
Here you’ll see any upcoming lodgements, as well as your previous lodgements and refunds. Select this year’s income return.
Follow steps 1 and 2 to enter or update your personal contact details and those of your banks and other financial institutions.
Before you enter your crypto totals for the year, you need to Personalise Your 2019-2020 Return at step 3.
Here you'll make the selections that apply to you, so that those sections can be included in your tax return form. These will about capital gains, income and deductions.
To be able to include your crypto capital gains in your return, select this option: ‘You had Australian interest, or other Australian income or losses from investments or property’. From its drop down options, select Capital gains or losses that are not from a managed fund. This will apply to the majority of the crypto community, who are seen as investors by the ATO.
Next, you need to make a selection around income...
Don't forget to select the deductions box -You had other income not listed above.
Pick Other deductions - this is where you’ll enter relevant costs, like your Koinly plan. Once you've personalised your return, it's on to step 4: Prepare return.
Right, so let’s look at Capital Gains Tax first: You’ll find your capital gains summary on the first page of your Koinly report.
Copy the Net capital gains amount from the report into this column
If you made a profit then you might be eligible for a long term discount on assets held over 12 months, Koinly shows the discounted amount here. Subtract this from the Net capital gain field. If you had other losses in previous years, subtract those too.
Report the total amount under the 18H ‘Current year capital gains’ label on your tax return.
If you’ve had your crypto for more than 12 months, you may be eligible to discount your capital gain by 50% or establish what indexation factor you can apply against your capital gain.
If you’ve owned your crypto for less than 12 months, you must use the other method, where you simply subtract your cost base from your sale price.
This final amount is reported at the 18A ‘NET capital gain’ label. Tax is then applied to your total assessable income (which includes things like wage and interest income) at standard marginal rates.
Now, you might have earned some income from your crypto in the last financial year. You’ll find those totals in the Income summary of your Koinly report. Here is an example of some income earned through an Airdrop.
Where to find out more
At Koinly it's our job to know about the crypto tax rules in each of the countries we support. For a complete overview on how crypto is taxed in Australia, head over to our regularly updated Australia Crypto Tax Guide 2021.