By using the best Australian crypto tax specialists in the game who know creative but legal ways to minimise taxes and protect your personal assets, this means you can keep more of your wealth safe from unlawful taxes, regulations and crackdowns.
Tax planning, accounting and financial management is challenging enough for most jobs, businesses and investments. Cryptocurrencies is a whole new level of difficulty which makes finding the right Australian crypto tax specialist a dire necessity.
Most people don’t know this but in building wealth there’s 2 issues to consider. Firstly, how wealth is created and secondly how it’s kept. The latter is often neglected yet all the elite and sovereign know the importance of it.
KEEPING the money you make in cryptocurrencies allows you to accumulate more wealth without having to stress about unexpectedly getting into legal troubles with the ATO when you withdraw.
THE THREE (3) KEY HIGHLIGHTS:
- The biggest problem you face as a crypto investor or trader is if you capitalise on a huge market boom. When your cryptocurrencies aren’t set up in a tax effective structure, you’ll end up paying the max individual margin rate of 40-45% tax instead of a cap of 25% if you make profits.
- There are a ton of benefits when you use the best Australian crypto tax specialists such as gaining personal guidance on your situation, keep more of the wealth you make, sleep peacefully at night knowing everything is legal, and more!
- A crypto tax specialist isn’t an expense, it’s an investment. What would you do with all the extra wealth you make by slashing your taxes?
Importance Of Using Crypto Tax Specialists in Australia
The biggest problem you face as a crypto investor or trader is if you capitalise on a market boom, this could literally make you hundreds of thousands – even millions of dollars like it has for some of our “whale” or high net worth clients.
However, if you haven’t prepared by structuring your cryptocurrencies in a tax effective structure BEFORE you make the profits, you’ll end up with a nasty shock from the ATO and a huge, unexpected tax bill.
That is, as soon as you transfer your cryptocurrencies into fiat, you’re legally obligated to declare your tax and more than likely half of your profits will go to everyone but yourself. The bank, the taxman, the government, etc. will all want their slice of the pie
• Kris buys $20,000 of Bitcoin at $1,000 USD on 10 Jan 2017.
• He sells Bitcoin when it hits $10,000 USD in Oct 2017.
• He invested $20,000, got $200,000, profit = $180,000 USD.
• Sounds good EXCEPT with no structuring, Kris will pay taxes at 40-45%, i.e. $75-80,000 USD taxes. Ouch!
• If we’d put Kris in a family trust or bucket company, he’d pay a maximum of 25% tax. Plus the timing makes a difference, e.g. if he waited until Jan 2018, he cuts his tax bill by 50%.
• $30-35,000 USD tax saving.
If you’ve made profits in cryptos (or you plan to) then getting on top of your structures is essential.
Book a free 30-minute no-obligation call to discuss your options on how you can work with one of our affiliated Australian crypto tax specialists for tailored guidance on your personal circumstance to start keeping more of your wealth safe.
5 Benefits Of An Australian Crypto Tax Specialist On Your Side
Benefit #1: Keep More Of The Wealth You Make By Slashing Your Taxes
This benefit speaks for itself and is most likely why you’re here, reading this article.
When you trade or invest cryptocurrencies under your own name with no linked agreements or tax structures, the problem with this is you’ll be taxed as an individual – which pays the highest amount of taxes under the law.
By contrast, legally moving your assets into a structure will result in taxes being capped at a certain threshold. Which is a max of 25% and sometimes even lower depending on the strategy you do.
The put that into perspective…
Let’s say you invest $50,000 AUD spread across multiple coins, liquidity mining, DeFi farming, staking protocols and other projects.
Now in 1 years’ time this has turned into $250,000. (a 5x increase from original capital, which isn’t unrealistic in cryptocurrencies).
If you want to withdraw $200,000 into fiat to secure profits, you’ll be taxed as an individual which can be as high as 48.5%. That’s close to half of your profits gone!
That is, you’ll end up paying somewhere around $90,000 AUD in taxes!
By contrast, if you were set up in a family (discretionary) trust, bucket company or other creative strategy we recommended, this would cap your taxes to a max of 25%.
Meaning, you’d only pay a figure like $50,000 AUD!
That means $40,000+ AUD is immediately put back into your account which you can use towards your family, a holiday or more investments.
This will also save any future tax bills you have.
Benefit #2: Personal & Tailored Guidance For Your Situation
The best tax structures for cryptos we’d recommend for you to use will depend upon your personal circumstance. i.e. The reason for holding your cryptocurrencies will determine the tax implications for them and therefore the best tax structure to use.
For example, the ATO views crypto investors differently to traders. If you’re a long-term investor and “hodler” this gives you certain CGT exemptions you otherwise wouldn’t receive if you’re a trader.
Equally, if you’re a short-term trader you can claim tax deductions for expenses in running your business because traders and miners are treated as carrying a business.
There are other issues you’re faced with in cryptocurrencies which is why it’s always best to speak with an Australian crypto tax specialist who understands this space sufficiently.
Benefit #3: Sleep Peacefully At Night Knowing Everything Is Legal
Our sister company, Wealth Safe, a registered accounting firm, who we work closely with to set up tax effective structures for our clients, was featured and recognised in an article by cryptonews.com.au as top 2 for the best crypto tax accountants in Australia.
Rest assured, when working with us, everything we do is creative, out-of-the-box but most importantly 100% legal and ATO compliant.
This gives the extra benefit of being able to sleep peacefully at night knowing your crypto assets are safe, protected and paying no more taxes than you’re legally entitled to.
Benefit #4: Avoid Getting Caught Out By Regulations & Crackdowns
The FED and ATO have essentially declared war on crypto investors and traders. They plan to target this space through audits, crackdowns and tax bills.
“This year, we will be writing to around 100,000 taxpayers with cryptocurrency assets explaining their tax obligations and urging them to review their previously lodged returns. We also expect to prompt almost 300,000 taxpayers as they lodge their 2021 tax return to report their cryptocurrency capital gains or losses.” Assistant Commissioner Tim Loh said.
No doubt this number will only increase. Mr Loh further went on to say…
“We are alarmed that some taxpayers think that the anonymity of cryptocurrencies provides a licence to ignore their tax obligations.”
Can the ATO track cryptocurrency?
Yes. Assistant Commissioner Tim Loh said the ATO closely track where cryptocurrencies interact with the real world through data from banks, financial institutions, and cryptocurrency online exchanges to follow the money back to the taxpayer.
This is the extract from his speech:
“While it appears that cryptocurrency operates in an anonymous digital world, we closely track where it interacts with the real world through data from banks, financial institutions, and cryptocurrency online exchanges to follow the money back to the taxpayer.”
Read the full ATO statement here.
Our Australian crypto tax specialists are always keeping up to date with the fast-changing laws and conducting regular webinars and blogs to keep you informed with these regulations so you don’t get caught out by a sudden announcement.
We ensure all of our clients’ cryptocurrency assets are safe and sound by using the right tax structures and educating on how to diversify your wealth using a balanced portfolio.
Benefit #5: Gain Even More Education
When you have an Australian crypto tax specialist and/or wealth experts on your side, this increases your knowledge in cryptocurrencies and other important aspects to grow and protect your wealth.
We believe the right kind of education is the formula to success. Hence why our vision with Global Wealth Club is to give everyone an equal opportunity to be sovereign.
By gaining education and knowledge in crucial life skills such as income growth, wealth management and sovereignty, this gives you the necessary tools to be able to achieve what it is you want in life.
From there, it’s up to you to action the knowledge you gain.
Featured: Your Guide To Cryptocurrency Investing in Australia
As you can see…
An Australian crypto tax specialist isn’t an expense, it’s an investment
From the 5 points above, it’s evident why having the best crypto tax specialists on your side is a HUGE bonus. You enjoy the benefits of keeping more wealth by slashing your taxes, sleeping peacefully at night knowing everything is legal, and avoid getting caught out by crackdowns.
The way we see it is finding the right accountant, specialist and/or tax structure isn’t an expense but an investment.
Using the previous examples highlighted in the orange boxes shows that it’s indeed an investment as it potentially generates you more wealth by slashing your taxes by over 50%.
That is, instead of having a legal obligation to give close to half of your profits to the ATO … you gain the benefit of being able to keep that wealth and have more choices on how you’d like to use it, whether that’s a family vacation, new business or investment.
The Next Step:
If you enjoyed this article, the next step is to watch our free 4-hour Australian Crypto Taxation event we held on the 26th of Feb 2022.
This is the perfect series to watch if you’re wanting to learn in far greater depth about the tax laws for cryptocurrencies in Australia plus how to protect your crypto assets.
Whether you’re new to cryptocurrencies or quite sophisticated, we believe you’ll gain a ton of value from this event as it contains specialist information which is very hard to get a hold of online.
In this free event, you learn from respected Australian tax specialists including:
Warren Black, founder of the Global Wealth Club
Michaela Rankin, chartered accountant and tax specialist from rankinandassociates
Virna White, CEO and Managing Director of Wealth Safe
Click here to watch the full event on crypto taxation and asset protection.