Shares and cryptocurrency investments can be a rewarding endeavour, however it’s important to stay on top of your tax obligations. In Australia, accurate record-keeping is crucial to ensure you comply with ever evolving tax regulations and avoid unnecessary headaches down the line. In this blog we will provide you with essential tips for maintaining accurate records to effectively manage your shares and crypto tax in Australia.
Keep Detailed BUY Transaction Records:
Maintaining a comprehensive record of all your share and cryptocurrency transactions is an absolute must. This record should include details from the BUY such as contract dates, purchase price (converted to AUD) and any associated fees. This information will be invaluable when calculating capital gains or losses for taxation purposes if the asset is sold, including any concessions.
Separate Investment from Business Transactions:
If you use cryptocurrency for both investing and business-related transactions it is vital to keep them separate. Create distinct accounts or wallets to ensure crypto used as currency (ie. buying of goods or services) is not mixed with taxable investments that must be reported as capital gains or losses. This separation simplifies record-keeping and ensures accurate reporting at tax time.
Go Digital With a Specialist Tax Software:
Consider using a specialised software like TaxTank to centrally manage all shares, cryptocurrency and other assets in one place for just $6 per month. TaxTank will automate the record-keeping process, monitor your portfolio values and auto calculate any capital gains or losses, including losses and concessions, in real time when assets are sold. Best still, you’ll have access to your CGT Tax Report all year round, meaning you can make decisions to control how much tax you’ll pay.
Preserve Supporting Documentation:
Retain all relevant supporting documentation, such as trade confirmations, receipts, and invoices. These documents serve as evidence of your transactions and help substantiate your records during an audit or when filing tax returns. Digital solutions like TaxTank include a permanent document storage at no extra cost, alternatively utilise a cloud-based solution to ensure their longevity.
In summary, the ATO automatically receives information from most share and crypto platforms meaning accurate record-keeping is essential for effectively managing your shares and crypto tax obligations. By keeping detailed records, separating business transactions and leveraging powerful tax software like TaxTank, you can maintain compliance, minimise tax liabilities, and have peace of mind when it comes to your financial responsibilities. Staying on top of your record-keeping will also let you monitor any capital gains in real time and avoid any end of year tax surprises.