For those still unsure if the ATO knows about your crypto, look no further than the current ATO crypto notices sent out to Australian taxpayers in 2023. If you received an ATO crypto letter - here's what you need to do.
The ATO has begun sending out 2023 letters to crypto holders who may have omitted cryptocurrencies in prior tax returns. If you’ve received a notice, it’s because the ATO has received information that you may have held cryptocurrency during a previous tax year without disclosing any income or capital gains in prior tax returns. The notices act as a reminder to comply with the ATO guidance and may include prompts to report multiple years.
Unsure what to do if you’ve received an ATO letter? Koinly has you covered - here are some helpful pointers to consider if you've received an ATO letter for your crypto taxes.
What's in the ATO crypto letter?
Depending on how you filed, or indeed whether you filed your annual lodgment, there are a couple of different letters you may receive from the ATO regarding your cryptocurrency.
If you filed a lodgment, but did not report your crypto transactions - or all of your crypto transactions - you may receive a letter or email from your tax filing software provider, stating that the ATO believes you held or disposed of cryptocurrency during the financial year.
This notice will ask you to confirm if you sold, traded, exchanged, converted, or gifted cryptocurrency during the financial year and ask for a report showing your transactions and calculations.
Meanwhile, if you did not lodge a tax return in 2022, you may receive a different letter advising that you may need to lodge a tax return. This letter states that based on information the ATO has received about your income, you may need to lodge a tax return for the 2022 income year and may need to include a capital gain or loss.
This letter includes an Information Schedule, showing the details of your transactions during the 2022 income year where possible.
What do I need to do if I’ve received an ATO crypto notice?
Most importantly, don’t delay when you receive an ATO notice!
- Review transactions over the last few tax years. Understand the tax consequences of your crypto trading in each financial year. Unsure? Our Australian crypto tax guide is a great place to start.
- Use crypto tax software. Don’t review trades manually, save time and use Koinly - it's free to sign up!
- Speak to an accountant. There’s no replacement for a qualified professional who can guide you based on your individual circumstances. An accountant can provide guidance on complex matters, engage with ATO on your behalf and assist with lodging amended returns. Need to find an accountant? Check out our crypto accountants directory.
- Speak to the ATO. Engagement always helps rather than ignoring the ATO. Getting in touch to explain your circumstances can be useful for payment plans, extensions, and understanding your options. You can also use an accountant to assist you with reaching out to the ATO.
- Remember, the ATO can track your crypto transactions. Learn how the ATO tracks crypto.
- Amend your tax return(s) and disclose accurately to avoid further action with the ATO. Failure to respond to the ATO may lead to an audit, further investigation, and even tax penalties.
I didn’t sell crypto, why did I receive a letter from the ATO?
Confused as to why you received an ATO crypto letter?
It's not just sales of crypto that are taxable in Australia. You might have a taxable transaction if you traded crypto for crypto, spent crypto on goods or services, or gifted crypto.
Even if you didn't dispose of crypto, you might have other taxable events from your crypto investment activities. If you mined crypto, received staking rewards, or even an airdrop - you may have additional income that you'll need to report to the ATO.
I already submitted my tax return - what do I do?
If you already submitted your 2022 lodgement, you may need to amend it. You can do this using the myGov site, or ask your accountant to update your previous return.
How can Koinly help?
Koinly helps you stay in the ATO's good books by ensuring you've accurately calculated your capital gains, losses, and income from crypto, according to the ATO crypto tax guidance. When the tax deadline rolls around, Koinly can generate a range of crypto tax reports to help you file your preferred way, including the ATO myTax report. Best of all, Koinly is completely free to use as a portfolio tracker. Try Koinly crypto tax calculator free today.
The information on this website is for general information only. It should not be taken as constituting professional advice from Koinly. Koinly is not a financial adviser. You should consider seeking independent legal, financial, taxation, or other advice to check how the website information relates to your unique circumstances. Koinly is not liable for any loss caused, whether due to negligence or otherwise arising from the use of, or reliance on, the information provided directly or indirectly, by use of this website.