Cryptocurrency & ATO Data Matching

We all know that the ATO has the power to request information from third parties to verify information declared in our tax returns.

Some examples are where employers are required to submit their PAYG Summaries, banks are required to advise the ATO of interest earned in bank accounts, health insurers are required to confirm with the ATO the insurance covers and premiums paid for each taxpayer…

Now they have taken this to another level…

Remember in December 2018 when cryptocurrency was a hot topic, where everyone was trying to get in and have a share of the pie?

It is estimated that there are between 500,000 to one million Australians that have invested in cryptocurrency. Because of this, it has been on the ATO’s radar as it is seen to be used to move funds to the black economy, hide money offshore, and is sometimes linked with risks with unexplained wealth and undeclared taxable capital gains.

Recently the ATO announced that they are extending their data-matching program to include Cryptocurrencies.

How do they do that?

They require cryptocurrency designated service providers (DSPs) to provide reports to the ATO on an ongoing basis. The data includes the following:

  • Details of cryptocurrency owners (including details of individuals’ social media accounts)
  • Account and transaction details (including wallet addresses associated with accounts, their unique identifiers, types and amounts in transactions

How will that impact me?

If you have been declaring your cryptocurrency trading/investments in your tax returns – nothing will happen.

If you have been trading/investing in cryptocurrency, especially where you have sold/converted between different cryptocurrencies, you may be contacted by the ATO as you may have omitted declaring these in your tax return. You will be given opportunity to verify the information collected before any compliance action is undertaken.

What do I do now, if I have omitted transactions in my tax return?

You can voluntarily notify the ATO by amending your tax return to include the omitted transaction, the ATO will then prepare an amended assessment where you will be required to pay back the extra tax liability (or receive extra tax refund as a result). If you are having trouble preparing an amendment, Aston is here to help.

Private health insurance – is it worthwhile?

From time to time we get questions from clients where they ask if they should have private health insurance. While it is a very personal decision, sometimes it may make a difference to your tax position when it comes to preparing your tax return.

Let’s dive into some of the common questions asked!

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Budget Update 2019 – what you need to know NOW

The Treasurer has delivered the Federal Budget 2019 last night (2 April 2019), he has provided some good news to individual taxpayers and small business owners.

It is worth noting that most of the announcements he made in relation to income tax are related to future income years, there are only two announcements that will take into effect immediately. In this article we go through the ones that are affecting the 2019 financial year only.

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What to do when you have ATO tax debt

Have you found yourself in the following situation?

You have sold your investment property, or shares at a profit, and have spent the cash. You prepared your tax return and found out you have to pay capital gains tax.

You have started your own business in the last 12 months, cash flow is tight with slow paying clients. You have outstanding business activity statement debt.

You have lodged your tax return that resulted in an income tax debt.

Whatever your reason might be, you have ATO tax debt. The amount is falling due, or is overdue.

But you cannot come up with the funds to repay the debt in full.

What should you do?

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45 day rule – what does it mean to you?

When you purchase shares in the share market, the companies that you have shares in may declare a dividend. In most cases, the dividend amount comes with a franking credit, which is a rebate that shareholders get for the tax paid by the company. The amount of franking credit that you can claim is shown on the dividend statements that are issued to you.

You will then declare the amounts shown on the dividend statements on your tax return, where the franking credits will be taken into account when calculating your income tax liability.

But do you know that there are instances you may not be eligible to claim all the franking credits you have received?

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