Why Should One Start Investing In Cryptocurrency?
They are a widespread concept by now but there is a question on the minds of a lot of people. Why should one start investing in cryptocurrency? That is to say, investing in the share market offers freedom, flexibility and builds a financially secure future. But getting started is a fear that many people have. When is the right time for one to start investing? According to an expert, the answer is ‘right now.’ The longer one waits, the harder it becomes to get started. The best time to start is now. You don’t have anything to lose – you are either going to gain something or you are going to learn something. That is to say, once you take the first step, there is everything to be gained.
In addition, there are investment options where you can start low, you can top up your super, or consider a side gig if cash is a problem and put yourself back in the game. Face your fear upfront and move forward. Further, one way you can get started is by taking a look at your super fund. That is to say, find out where the money is currently invested and start keeping an eye on the price. You can then start small and invest in companies that line up with your values and purpose in life. Now you know, why should one start investing in cryptocurrency so let us move forward.
Tax Payment On Cryptocurrency
Above we learnt why should one start investing in cryptocurrency, let us continue with the tax applied to it. More than half a million Australians have investments. It comes after the ATO revealed it had extended a partnership with Australia’s cryptocurrency exchanges requiring them to hand over their trading data until 2022-23. It is a part of a campaign from ATO which is out to smash the myth that cryptocurrency gains are tax-free or only taxable when the holdings are cashed back into Australian dollars. On the other hand, its partnership with exchanges is helping it target taxpayers. Further, they will remind taxpayers who own it by sending a pop-up message if they lodge their own tax return through the myTax portal or a message will be sent to their registered tax agent just to remind them to include gains and losses.
Many people are quick to point out that cryptocurrency is not backed by any government. As a result, are subject to fewer rules than fiat currencies like the dollar or euro. This lack of oversight has led many to believe that investors are participating in anonymous transactions that allowed them to avoid paying taxes. But, this belief is false. That is to say, crypto exchanges must report user activity on gains and losses. In addition, it is taxed the same way as stocks. Now we know why should one start investing in cryptocurrency as well as how it is taxed. Let us move forward and learn more about it.
What Information Does the ATO Require?
With the help of data from banks, financial institutions and cryptocurrency exchanges, the ATO closely tracks where cryptocurrency interacts with the real world. That is to say, it is seen like other investment assets such as shares and it’s really important to keep good records in terms of working out gains and losses. This also includes the Australian dollar amount when you buy, swap or sell cryptocurrency, dates of transactions, what the transaction was for and details of the people involved. The ATO started collecting records from designated service providers or DSPs to ensure individuals were tax compliant. These DSPs include anything from cryptocurrency exchanges, payment facilitators, brokerage services and more. The type of information collected can include your name, address, ABN, date of birth and contact details. In addition to that, it can also include other personal information.
The ATO is also able to access transaction and account details such as the status of accounts, linked bank accounts and wallets. In addition to that, they also have access to types of cryptocurrency, amounts in fiat and crypto and much more. With the exception of cryptocurrency gain for personal use assets, the majority of gains and losses in relation to it are subject to tax so your best bet is to get familiar with it and prepare to factor it in your tax return. Now you know everything there is about why should one start investing in cryptocurrency.
