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Traded in cryptocurrency? Watch out for the ATO!

Each year the ATO matches million of transactions against multiple sources in order to ensure that taxpayers are correctly disclosing their tax obligations.  You might even be familiar with some of these such as bank interest, payment summaries from your employer, the sale of real property and the sale of shares.  Now the ATO says it will begin collecting records from Australian cryptocurrency designated service providers (DSPs) to ensure people trading in cryptocurrency are paying the right amount of tax.

What is cryptocurrency?

The term cryptocurrency is generally used to describe a digital asset in which encryption techniques are used to regulate the generation of additional units and verify transactions on a blockchain.  Cryptocurrencies can be bought or sold on an exchange platform using conventional money.  The ATO says the innovative and complex nature of cryptocurrencies can lead to a genuine lack of awareness of the tax obligations associated with these activities.

How will the ATO collect and match data relating to cryptocurrency transactions?

The data collected from third-parties will include purchase and sale information to better identify taxpayers who have failed to disclose their income details correctly.  Information collected will include a range of sale and contracted-related details, as well as transaction dates and times and amounts of transfers for individual account holders.  The ATO will be making contact with a ranges of service providers to obtain this information including brokerage services, payment facilitators, exchange services and even bitcoin ATM providers.  At this stage the data matching will focus on transactions that occurred from 1 July 2014 and will continue up until 30 June 2020.  The ATO said it was estimated there are between 500,000 to 1 million Australians who have invested in cryptocurrency.

What are my obligations?

Cryptocurrency is considered a CGT asset for tax purposes and as such any profits made from trading it could be liable for capital gains tax.  However, an Australia resident taxpayer who has held the currency for greater than 12 months may be entitled to the 50% CGT discount.  The ATO have said they are looking at whether a taxpayer has omitted capital gains on the sale of cryptocurrencies when preparing their income tax returns.

The ATO have said that following the data matching process, taxpayers may be contacted by the ATO and will be given at least 28 days to clarify any information that has been obtained from the data provider.  As usual the ATO has said penalties may be significantly reduced in circumstances where they were voluntarily contacted prior to audit activity commencing.

Next Steps

If you have transacted in cryptocurrency and have not considered the tax implications then please contact one of our accountants to discuss.  We have seen an increase in the number of clients of coming to us with these queries and increasingly the ATO are releasing more guidance as to the tax consequences.

Top tips for productivity and achieving your goals

Are the cries of “I’m too busy” and “I don’t have time for that” holding you back from achieving your goals? Check out these top tips for cutting through the noise and becoming more productive.

We’re all guilty of it; of saying “I don’t have time for that” or “I’m too busy”.  But isn’t it amazing that when there is something we really want to do we will always make time for it? If only there was a way we could make more time for all the other things we should be doing even if we don’t necessarily want to straight away.

Thankfully, there are ways you can fit more into your life without completely breaking down – all it takes is a little time management and organisation. So without further ado – here are my top tips for a more productive life!

1. Know yourself

Spend some time getting to know yourself and your emotional reactions/responses to tasks, situations, and outcomes. Personally, I’m motivated by the feeling of achievement – that feeling of satisfaction and accomplishment I get when I have successfully ticked something off the to do list and stepping closer to achieving my goals.

When I have a big project ahead of me I like to tick off a small task or two before I get started on it.  This fuels my sense of accomplishment and gives me the drive to get stuck in to the big job ahead of me.

I also find that I am my most productive in the afternoon, so I work with that quirk and tackle small tasks in the morning like checking my emails and move to the more complex tasks later in the day when I’m feeling more motivated.

2. Focus on one thing at a time

I’m not saying you can never multi-task – it’s just important to know the balance and be flexible. Multitasking sounds great in theory, but it’s rarely efficient or productive in practice. We are more likely to make mistakes when our attention is divided. Instead, try focusing on one thing at a time and see it through to completion – it saves time by avoiding potentially doubling up on work or the need to refamiliarise yourself with a task because you’ve forgotten where you’re up to.

3. Be open and receptive

It’s important to be open and receptive to feedback from colleagues, friends and family. Remember that most people want to help you succeed, so when they provide constructive feedback try to take it on board and see how you can apply it to your situation. Your colleagues may have tips on how to complete a request in a more time effective manner – why not try out their suggestions and see if they can work to your benefit?

4. Keep a tidy environment

A tidy space makes for a tidy mind. The cleanliness of my home, my desk and my computer desktop all play roles in how clear my head is and how organised and productive I feel. Check out Tidying Up with Marie Kondo for some great tips on how to declutter your life.

5. Use a schedule

Mapping out your time on a calendar or planner is a great way to see what you’ve got on and what you need to work around – but remember to keep things flexible. Plans can often change and if you aren’t prepared for this, it can really catch you off guard.

When planning out my day I tend to opt for a simple to do list, itemising the specific things I need to complete for the day but also including something that I would like to have completed if time allows. I also like to loosely plan out my week, making sure I’ve included the things I must do and would like to do, with some time allocated to specific projects I am working on.

6. Make use of technology

Find a task tracking system or app that works for you. There are so many out there with different pros and cons – all it takes is simple a search online to find a solution that suits your needs.

7. Keep yourself accountable

Finally, it is important that you hold yourself accountable to your goals. At work, it’s often easier to keep yourself accountable for what you need to do because others may rely on you to be able to fulfil their requirements or meet their KPIs. However it’s also important to keep yourself to the same standards outside of work – you’re the only thing standing in the way of achieving your own goals, so why would you hold yourself back?

How can you use work your behaviours and motivations to your own advantage? From finally sorting out your budget to remembering to lodge your taxes on time – there are a lot of things that can be made easier with a little advice and a helping hand to take some things off your plate. Why not speak to The Hopkins Group to learn more about how we can help? Tick off your financial to dos and put yourself on the path to achieving your goals with The Hopkins Group today.

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