What is CoinJar
CoinJar is an Australian crypto exchange that makes buying over 50 cryptocurrencies quick and easy. It's renowned for its industry-leading security, top-notch customer support, and diverse purchasing options.
- User-friendly crypto wallet: CoinJar offers an all-in-one crypto wallet, allowing users to send, receive, convert, and store more than 50 cryptocurrencies with ease.
- Multiple payment options: Users can instantly buy crypto using Visa, Mastercard, or direct bank transfers, including PayID and Osko.
- Investment automation and diversification: With CoinJar Bundles and Dollar-Cost Averaging (DCA) functionality, users can easily diversify and automate their crypto investments, minimizing risk and effort.
Do you have to pay tax on crypto?
Following the ATO's release of crypto tax guidelines in 2014, it's clear that crypto is taxable.
As a taxpayer in Australia, you're legally required to report all your earnings whether it's a local or overseas platform. This includes crypto gains and losses on CoinJar.
ATO tax treatment of crypto
There are two types of assessable income that your CoinJar investments are taxed on in Australia:
Capital Gains Tax (CGT): You’ll end up with capital gains whenever you buy a crypto asset, and later sell it for a higher price. Capital gains and losses can result from trades, disposals, payments and many other types of transactions.
Example: You purchase Tron on CoinJar and later sell it, resulting in a Capital Gain that is subject to CGT.
Ordinary Income: You can easily end up earning income from a range of sources such as commissions, referrals, airdrops and many more. These sources of income must be declared on your income tax return.
Example: You receive a distribution on CoinJar, which must be declared as Ordinary Income.
Dealing with crypto taxes can be confusing. Remember to keep the right documents and learn how to do your taxes properly. This way, you won't make errors that will trigger an audit from the ATO.
Penalties for not declaring tax
The ATO, funded by an annual $3.6 billion budget, administers our tax system in Australia. It has a dedicated Black Economy Taskforce to address the shadow economy including crypto. You'll end up facing severe penalties for not declaring, including fines, interest charges, and possibly criminal prosecution for tax evasion.
Australians who use CoinJar and avoid declaring their profits are facing significant risk. Thankfully, Australia boasts one of the highest tax compliance rates, with over 93.7% of individuals fully meeting their tax responsibilities, indicating that only very few are actively trying to cheat the system.
Late tax filings can lead to complications, putting you in a less favorable position with the ATO and the Australian Government, and increasing the likelihood of audits or reviews. It can also make it harder to secure loans, especially home mortgages.
Does CoinJar report transactions to the ATO?
CoinJar is an Australian registered entity, CoinJar Australia Pty Ltd (ABN 75 648 570 807). As an Australian digital currency exchange, it's a legal requirement for CoinJar to register with AUSTRAC, perform KYC and know the identity of their customers. This is important for preventing scammers and criminal activity.
Since 2019 the ATO has been operating a data sharing program with Australian Digital Currency Exchanges. Under the data sharing program, CoinJar must provide transaction data of their users to the ATO.
In short, the ATO knows about your transaction history on CoinJar.
You’ll know the ATO has your crypto transaction data, as it will show in the prefill report on your tax return. That means it's important that you do calculate and declare your crypto gains, otherwise it’s only a matter of time before you end up under audit by the ATO.
ATO record keeping requirements
To complete your crypto taxes each year, there’s some important records that you need to keep. Having these records will help you to calculate and declare your crypto tax, and are also your evidence if you need to prove how your crypto tax was calculated.
The ATO record keeping requirements for crypto require you to keep the following:
- receipts when you buy, transfer or dispose of crypto assets
- a record of the date of each transaction
- a record of what the transaction is for and who the other party is (this can just be their crypto asset address)
- exchange records
- a record of the value of the crypto asset in Australian dollars at the time of each transaction
- records of agent, accountant and legal costs
- digital wallet records and keys
- a record of software costs that relate to managing your tax affairs
The ATO has also advised that records should be kept for at least 5 years.
CoinJar Account Statements
CoinJar has made a number of account statements available to ensure you can meet your record keeping requirements. You can follow the account statement export instructions from CoinJar to download a copy of the files.
You can download the following account statements from CoinJar.
Your crypto tax software may also be used to satisfy the ATO record keeping requirements. Syla has been designed to satisfy Section 121.20 and Section 121.25 of the Income Tax Assessment Act 1997, that deals with ATO record keeping requirements.
As an approved tax partner of CoinJar, Syla can be used to record your transactions by OAuth Connect or File Import. Syla keeps a record of the original source data, in the exact format it appeared on your account in CoinJar, ensuring you meet your record keeping obligations.
Having your records is just step one, because now you’ll need to calculate the tax outcomes for each and every transaction. You’ll need to make sure you do it accurately, or you’ll be at increased risk from the ATO.
How is crypto taxed on CoinJar?
We all know that crypto is taxed, but the exact tax treatment can vary. Understanding exactly how your different crypto transactions are taxed can not only help you meet your tax obligations, but it can actually help you to make smarter investment decisions.
Important: In the following sections we are considering the tax treatment of an individual investor. If you’re a trader or a different entity such as a Company, Trust or SMSF, your tax treatment may vary.
Buy and sell crypto
Capital Gains
When you buy crypto on CoinJar, it is a purchase of a CGT asset for tax purposes. Whenever you purchase a CGT asset you must record and track the cost base.
When you later sell crypto, you’ll need to record the proceeds from the sale. By subtracting the original cost base from the proceeds, you'll be able to calculate and declare the resulting capital gain or loss.
The basic idea works like this:
- If your crypto went up: declare the increase in value as a capital gain.
- If your crypto went down: report the decrease in value as a capital loss.
- If you held crypto over 12 months: it’s eligible for the 50% CGT discount.
The calculations for CGT can get very complicated, which is why our tax team wrote an in-depth guide on how to calculate CGT on crypto.
Bundles
Capital Gains
Bundle buys allow you to purchase a variety of tokens in a single transaction. The main benefit of buying a bundle is the convenience, so you don't have to individually purchase each asset on its own.
It's also important to consider the tax implications. Most bundle buys are simply for the convenience only. So every time you make a bundle buy on CoinJar, it will still execute individual purchases of each token for you. For tax purposes, you'll need to track each purchase as its own CGT asset. When you later sell the bundle, you can end up with a lot of individual CGT disposal events.
For example, imagine you purchased a bundle that included the top 10 crypto assets. When you make the first purchase, you'll end up with 10 CGT assets that need to be tracked. When you later sell the bundle, you'd have another 10 disposal events, each of which you'll need to calculate the resulting capital gain or loss.
Practically speaking, bundle buys make it really easy to end up with a lot of tax events. So it's recommended to use software for tracking the purchases and making the tax calculations easier.
CoinJar SMSF
Capital Gains
Self-Managed Super Funds (SMSFs) are a separate legal entity with different tax outcomes to individuals. Due to the requirement for the SMSF to pass an external audit each year, it's also important that all crypto records are kept in perfect order. Fortunately, you can get a CoinJar SMSF account that will keep your fund compliant.
The tax treatment for an SMSF entity is different to your individual tax. The biggest difference being that an SMSF is only eligible for a 1/3 (33.33%) discount, rather than the normal 50% discount that individuals are entitled to. Despite some differences, crypto held in an SMSF is still treated as a CGT asset that is held for an investment purpose.
When calculating the tax outcomes for a CoinJar SMSF, it's important to use Australian crypto tax software that has an account type specifically designed for SMSFs. This will ensure your SMSF passes its annual audit.
Read more: How to setup a crypto SMSF
Latest ATO advice on CoinJar
If you want to know what the ATO thinks about your investments on CoinJar, then you should read some of their latest advice. Here's some of the ATO's most recent tax guidance on CoinJar.
How to do your CoinJar taxes
By now, you've likely realised there can be a lot to crypto tax, and getting it done correctly can be tricky. Let’s find out how you can actually get your CoinJar tax sorted.
ATO tax lodgement deadline
Our Australian financial year starts on the 1 July and ends on the 30 June each year, and you can prepare and lodge your tax return anytime after the 30 June up to 31 October.
The tax deadline for individual taxpayers is 31 October. Once you go past that date, your tax return is overdue, and your risk of penalties is increasing.
There is one way that you can easily extend your lodgement deadline though. You can receive an extended lodgement deadline till 15 May when lodging through a registered tax agent.
Some taxpayers find themselves with years of overdue tax returns. Unfortunately, the problem won’t just go away by ignoring it, and it’s only getting bigger in the meantime. With the ATO no doubt using the data collected from CoinJar more effectively each year, it’s only a matter of time before they catch up with you.
If you do have overdue tax returns, then it’s always worth working with a good tax accountant. They’ll be able to help you get your tax affairs back up to date. In many cases, investors can even end up receiving tax refunds from years of unlodged tax returns.
Self-lodge vs using an Accountant
When lodging your tax return, there’s two ways to go about it. Self-lodge yourself through myTax (myGov), or by lodging through a tax agent.
Self-lodging your tax return is definitely more affordable, as it means you don’t have to pay for an accountant. However, you’ll need to be much more careful about how you calculate and declare your tax outcomes. Follow our comprehensive guide to self-lodging your crypto tax.
Using an Accountant does cost more, but it will save you a lot of headache, and you won’t have to worry whether your tax return was done correctly. You’ll also have someone you can ask questions and get tax advice from. If your crypto activity is particularly complex, then it might be worth looking at a crypto tax specialist to help you.
Regardless of which approach you take, you’ll need some type of tax software for recording your crypto transactions and calculating the tax outcomes.
If you’re an Australian taxpayer, then it’s advisable to use tax software built specifically for Australia, otherwise the tax calculations may not be done correctly, putting you at risk with the ATO
How to select crypto tax software
When it comes to managing crypto taxes in Australia, choosing the right software is crucial for compliance and ease of use.
Tax regulations and compliance requirements vary significantly across jurisdictions, and what works in one country may not be suitable in another. Australian crypto investors need tax software that is specifically tailored to the unique aspects of Australian tax law. It's essential that the software not only calculates these taxes accurately but also updates its tax logic as tax laws evolve.
Ensure the crypto tax software is built specifically for Australia. Otherwise you may declare your tax incorrectly or overpay more tax than required.
You should also check for the software’s ability to integrate with popular Australian and international crypto exchanges. Having good support for CoinJar is a must, but you should also consider any other platforms you trade on.
Quality integrations are vital for maintaining accurate and complete records of all your crypto activities.
Crypto tax is complex, so having software that is user-friendly and intuitive will be a big help. Look for software that generates detailed, ATO-compliant reports which can be directly used for tax filings or shared with your accountant. You should also consider the level of customer support offered, and whether it's actually coming from an Australian support team.
If you don't have tax software for your crypto yet, then sign up for an account with Syla. It's the only tax software built exclusively for Australian crypto investors, and it's an approved tax partner of CoinJar.
Using crypto tax software
Crypto tax software is designed to make doing your crypto taxes much simpler. The software will calculate all the tax outcomes for you, so you only need to import your transactions, make any edits as required, and download your final crypto tax report. All the complicated tax calculations are automatically done for you.
It’s really easy using Syla to do your crypto tax:
- Get started with a free account.
- Add CoinJar as a data source and sync your transactions.
- Add any other platforms and wallets.
- Review your transactions.
- Download your Crypto Tax Report.
Syla does all the heavy lifting for you. Your transactions will be imported and the tax calculations will be done for you. When using LTFO tax optimisation you can even achieve lower tax outcomes than you normally would.
Once you've downloaded your crypto tax report from Syla, you can either give it to your tax agent, or you can use it to self-lodge your own tax return.
Importing transactions from CoinJar
The first step to getting your crypto tax sorted is to import your transactions from CoinJar.
Syla is an approved tax partner of CoinJar and has an industry-leading tax integration. You can choose between OAuth Connect (Recommended) or File Import.
API Sync
Using an API sync to get your transactions into Syla is the recommended approach on CoinJar as it’s safe and easy to do.
Important: Ensure you only ever set up read-only API keys when using tax software. This will ensure you keep your crypto safe and secure.
File Import
Using a File Import is an effective way to import all your transactions on CoinJar as it’s safe and easy to do.
If you get stuck, we also have an Assisted File Import process.
Download your crypto tax report
Once you have all your transactions imported into Syla, you can view them, make edits if needed and import any other Data Sources that you have.
After you’re happy with everything, you can download your Crypto Tax Report.
ATO crypto tax report
Tax software for CoinJar
It's very difficult to correctly calculate all the tax outcomes of your crypto by hand unless you're a tax accountant.
If you are using a tax accountant, then you probably don’t want them doing it by hand either, as it's going to take a long time and cost a lot.
That’s where using crypto tax software can save you a lot of time and money, that you'd rather spend doing something else. 😊
Syla is the only crypto tax software designed specifically and only for Australia. Syla not only calculates all your tax outcomes to ensure you are ATO compliant, but it also optimises your tax to ensure you pay the lowest crypto tax legally possible, saving you both time and money.
- Best value - $59 AUD for 10,000 transactions.
- Absolute certainty - purpose-built for Australian tax law.
- Maximise your tax savings - using Syla's proprietary LTFO method.
👉 Get started for free.
