For over twenty years I've used the same accountant to manage my taxation affairs including a sole-trader business, a company I own and my personal tax preparation. He's gone from an accountant (CPA) at a small firm to taking it over and he's conservative which is not a bad thing - flamboyancy could see me in breach of tax laws here that comes with penalties including jail time.
Overall, I've been happy, but dissatisfaction has crept in.
My financial year tax preparations were emailed to me a week ago for electronic signing prior to being submitted to the ATO (Australian Tax Office). I wanted clarity and sought a face to face appointment.
Here's the thing, I pay an annual fee to my accountant by prior written and signed arrangement. It's a fairly large sum of money, into the thousands, but it comes with a raft of perks and benefits and is, in itself, tax deductible - it covers all aspects of my financial affairs. He's not delivering on his end of the bargain though and today I discovered part of the reason why.
Before I write disparaging comments about my accountant, and in the name of fairness, I should say that crypto-currency law is a complete shambles in Australia. The Government change positions, (tax law), to suit themselves and with tax revenue in mind. They keep things sitting on a bed of quicksand to trap the unwary; the unwary are Australians like me who have and trade crypto-currency and, unfortunately for me, my accountant too. Having said that though, my expensive accountant gets paid to know it.
My accountant didn't look happy to see me today.
He was standoffish borderline-rude from the moment he came into the waiting room to get me. The fellow barely greeted me and his body language was negative and unwelcoming. Maybe he's just having a bad day, I thought. I proceeded with some light banter and, nothing, except the same bad attitude. When we got into his office it smelled like boiled fucken onions and was in a mess; he had three food containers strewn on his desk, one with half eaten food in it, clothes hangin on hooks all over the place, in a corporate office, and to top it off he slumped down into his chair and said, without even looking at me, what's cooking.
What's fucken cooking bro? What's cooking? Fucken boiled onions you mother fucker! What the bloody fuck! #WTBF
OK, I didn't say that, but I thought it.
Instead, I opened up with some dialogue around needing some clarification in respect of my tax return and with the crypto-currency part in particular. This was in response to a very large sum that had been assessed as a capital gain. Just to be clear here, I have not moved any crypto-assets into fiat currency since I began trading in 2017...but I have a tax bill. The government here tax transactions in exchanges (buys and sells) and if a gain is made it's deemed a capital gain and tax applies. I transferred a friend of mine $1000AUD of crypto-currency last week...and I'll pay tax on it. There's other scenarios of course, but I want to keep this simple.
So, back to my oniony-accountant.
He didn't have many answers, just cursory responses clearly quoted from the ATO website, and when I pushed him on a few matters he came up blank. This is a CPA, one who has told me he has several clients with sizable crypto-holdings, and to whom I pay a lot of money.
The meeting didn't go well but I'm pleased to say I maintained a calm demeanour throughout despite onion-boy pushing me to the limit.
As I walked out I had already made the decision to source a new accountant, and not just because mine is crypto-clueless but because I have lost confidence in him and that's not a good thing when it comes to financial matters. Transitioning my tax/business related matters over to someone new is going to be a pain in the ass, finding the right one will be worse I think though as I'll need to locate one who understand crypto-currency much better - a specialist. It's a sad state of affairs really, and something I really don't need in my life right now, but the chap left me no choice.
The tax laws around crypto-currency in Australia are draconian, unfair and scattered, meaning, not clear.
They take advantage of the fact that the world of crypto-currency is akin to the wild west at the moment and whilst there's people out there (in Australia) who might be thinking they may be able to rort the system...well, time will tell. I'm not saying they won't, but like all shortcuts they may find the price is ultimately more than they might like to pay; being someone's bitch in prison isn't my idea of fun.
I'll not lie, this whole situation, the harsh and unfair tax law and my onionish-accountant's nutbaggery, rubbed me up the wrong way today and I'm pretty annoyed. It's all rather fucked, both things, but there's not much to do but take it, make the changes I am able to and move forward as best I can.
I wonder if you've had any experiences in respect of tax laws and capital gains made on your crypto-currency. I know a lot of people use it for living expenses in certain countries and I wonder if there's an expectation that it may catch up with them at some stage? Income tax and capital gains tax is a reality in many places, have you come across it? I don't know what the situation looks like in other countries, just like people outside Australia can't speak for what happens here, so I'm curious to know, if you want to tell.
Design and create your ideal life, don't live it by default - Tomorrow isn't promised so be humble and kind
I took the image in this post myself
Income tax: "You owe us money. We decided already what you owe, but you need to do lots of complicated paperwork, and if you don't match our number, we'll take more and maybe lock you in a cage." It's mafia racketeering with a condescending layer of imaginary duty.
I couldn't have said it better.
I was pretty mad earlier but have calmed down a little; having said that, it's not a situation that's going to go away. I'll have to deal with it so need to get a handle on the anger.
I hope between barter, crypto, and silver, I can divorce myself entirely from government fiat and corporate banks one day.
Come on right? There has to be a better way. I'm just annoyed that they want so much, that a person can't earn a little extra through work and effort without having to cough up vast sums in tax. I'm stacking metals too man, also barter my home-grown produce for things. I hope the same as you.
I can just say LOL.
I thought that in Italy we were among the most funny country for law (and especially tax laws) but now I see that someone else is trying to do its best/worst. Keep grinding and use wallets 🤣
It's bonkers here, the tax laws are draconian, as I said in the post. To add insult to injury, that bloody onion smell is still up my nose...Seriously, I can't get it out. Why couldn't he have had bloody pizza smells in there!
I'm going to try snorting crushed up peppermints and see if that helps.
Thanks for your comment.
UK is the same. Exchanging one crypto for another counts as a disposal for capital gains. Spending crypto counts as a disposal for capital gains. Sending crypto to someone else counts as a disposal for capital gains.
I don't envy tax accountants. The tax system was built for a small number of transactions. Crypto, with its thousands of transactions, is a nightmare.
Only taxing gains when moving crypto into fiat would be much simpler. But I'm not holding my breath for any changes.
I'm afraid to even say the word crypto in case some government buttwad jumps out from behind a pole and yells out tax! Lol.
I agree, accountants have a hard job which is why my, soon-to-be-ex accountant is struggling. I feel sorry for him to be honest as he will lose several clients, but that doesn't excuse his behaviour today.
Indeed, and I'd be happy with that scenario; I'd even pay 50%.
you have to pay tax when you send crypto stable coins to someone?
Yes, I send the tokens, I pay the tax. The chances are, they have to pay tax also, but I'm not sure on that.
but why do you have to pay a tax on that? It's literally just a transaction sending a fixed amount 🤔
Also, I'm guessing you are also paying taxes on your Hive posts? That has to be a nightmare with the interest involved etc.
That's a good question, if you get yourself an accountant here in Australia you might get an answer, but probably not. That's my point I guess.
Yes, I'll need to pay tax on what I earn on Hive.
this does not make sense in the slightest - there is no selling or swapping involved. I would not pay taxes on that.
Does your accountant do that? I mean this would involve e.g., blog post and comment rewards, the interest from curation as well as passive interest from the chain; and also the transactions of Hive/HBD in your account to other accounts (as well as 2nd layer tokens)? TBH this seems crazy
You're right, it makes no sense, but tax laws are laws, whether they make sense or not. People that live in this country have to comply or face the consequences.
The Hive stuff will be takes when I take it out, which I have not done yet. It will assessed as income or capital gain and taxed accordingly.
On a more general level I feel that this exemplifies the overreach and detachment of government from what the people actually want. I get that you are trying to play by the rules which is the smart thing to do. But it is also telling that the rules are made by people with power who bend the rules of the game to their interests.
The whole system is a joke. We have a decent accountant that’s learned some of it and seems okay but we are going to see what’s going to happen this coming tax season and how he fares. Thankfully mine isn’t really a whole lot complicated but ya it’s insane the laws. I’m glad that I’m not into the disaster that is DeFi lmao that’s way too many transactions for me! I don’t envy your brother, seems like he’s dabbled into it a lot!
The best thing in the world is to have a flat tax, no avoidance and nothing back. But then criminals in government and special interests wouldn’t be able to game the system the way they have.
It's a dog's breakfast for sure, and complicated as hell. The thing is that it will change so much as time goes so what happens this year may be different the next. It'll be a nightmare for accountants and many will simply not deal with it. That's not me saying that, it's accountants. (I made some calls this afternoon.)
It'll be a nightmare for people like us too.
I'm not sure how deeply involved my brother is with defi, certainly deep enough I'd say. Also, those in the Splinterlands space will have some interesting times ahead I'd say, depending on what country they're in.
A lot of the third world countries probably won't have these issues, but they don't have running water, power infrastructure, roads, healthcare and so on either.
Honestly, here in Italy, nothing is understood about cryptocurrencies in terms of taxes. It is also true that there are many Italian tax evaders lol!
In any case I would replace the "spring onion" as soon as possible, when it comes to taxes you must have total confidence; I, for example, accountants, have changed several until I get to the one who now manages my accounts which I trust blindly.
I think that's the case n most places; most have no clue how the governments will handle capital gains through crypto trading. Many think it'll not be an issue, but let's see huh?
And yep, the process to change accountants has begun, I just have to interview and find the right one.
💪💪💪
I did something rather risky this year. I decided if they are coming for up to half of our crypto. Even when we see no physical gains from it. I created a loss.
A money pit. Not sure if it will pay off? Or should I say "write off".
I bought several laptops. And they are "mining" away as we
speaktype. I am sure they will make that illegal in time as they move to control even the air we breathe and water we drink.Cool set up man! I've not done any mining, wouldn't know where to start really, but hopefully it works out for you.
I was talking about today at work with the State Manager...He asked if you want a job. Lol.
Thanks Bro.
20 years ago I would have said HELL YEAH.!!
You and I working together brah, probably more trouble than a company would like to accept. Lol.
We would show solid results. It is who we are. When it comes to getting the job done. I do not Horse around. Lmao
Workhorses...
Lol.
Damn, that sounds like a real pain. Do you have a good record keeping system? This will be helpful if you do.
For any crypto I bought, yes, and for the exchanges, yes. Hive transactions though, no. I should have downloaded the .CSV file every 60 days. In truth, most people on Hive are going to run into this situation, certainly ones in most first-world countries. It might not be a thing, but as countries see how much revenue others are making, tax laws will change there too. Hive might need to open up the 60 day report and make it all time.
Yes, this reporting is very difficult on Hive to track and follow. Capital gains on crypto is a really bad thing though.
Governments see an opportunity for more revenue and as more countries do it others will follow; it's easy pickings. I know many who think they'll get away with it, crtypo earnings being untaxed, but as time rolls out it'll get tighter and tighter, more regulated. History shows us this. Taxes happen.
Yes, the Borg will assimilate everything, this is the sad truth.. hopefully, we can join the free folk beyond the ice wall! I'm just scared of the White Walkers though!
Now you're talking man, let's go beyond the wall and live free! Lol.
That comment made me laugh. Thanks mate.
Major countries do impose laws to favor the government without worrying about the investors or public. For example in India, they tax you for the profits, but then they won't allow you to compensate the loss, its only you who has to bear that. Is staking reward and earnings from hive taxable as well ? If yes, how do you calculate and report them ?
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Taxes pay for things like infrastructure, hospitals, defence and the like...In underdeveloped countries that may not have as many taxes those things are largely missing, uncared for or poorly maintained. But yes, taxes are excessive here in Australia.
Yes.
If yes, how do you calculate and report them ?
With great difficulty. It's largely impossible to be honest. I guess they'll have to work out an average or worst-case scenario and work of that when they determine my tax bill. I'm sure I'll get fucked over.
May be start building something on this as sooner or later, people will need it. If you can share, how you do it, we can take that as a starting point, so please share.
I might, it depends how it all shakes out.
I don’t know— I tried one year to file taxes on my crypto txs and they said I owed money. I didn’t understand since I didn’t have any money, but apparently within the US, the exchange of crypto counts as a profit or whatever else.
On an unrelated note, your slogan to design your own life came up in a book I’m reading at the moment, so I took the confluence as an opportunity to replace my bookshelf.
I suppose your anecdote and mantra lend itself to finding a dedicated number cruncher, one sans onions and attitude. I reckon they’re related. I’d be ticked if my breath and office reeked of my lunch..
Yep, the same as here and the same thing I faced, the activity on exchanges counts and if gains are made, tax is owned.
You're right though, it was a prompt to move away from my accountant. Maybe after more than twenty years, it's time. I'm not looking forward to the process of finding one, but it will work out for the best, I'm sure.
The onion smell...it was like he had been cooking onions in there and the way the office looked...it was very strange. I almost got the impression he was living there. A marriage break up maybe? Oh well, that's his business. I'll not accept it though, the rudeness and lack of crypto knowledge. Time to move.
That's patience in you working, when you are calm over delegate matters you will come out victoriously.
In my country most times we have our account officer to deal with and in some cases it's so fraustating that an account officer will not be able to give account of a particular account in his care.
I will be encourage to take your time and get a trustworthy fellow that can handle things for you
I'm pretty certain things will work out. My income is derived from my job and investments and not crypto. In fact, crypto is the smallest part of my financial position. Still, I get annoyed when the government makes a grab at revenue like this, and I'm annoyed with my accountant too, but that I can deal with. He'll not get anything more from me.
When they misbehave they forget the profit that comes from doing good work
I don't think we do that here. @josediccus @belemo do we pay tax during Crypto transfers? Or anything Crypto-ish?
Nice conversation with onion-man. Wish I could have one of those...
The only way I want to smell onions is on my pizza whilst it's in the pizza oven! On my accountant? Nah.
Lol. I can imagine. 😂.
No, we don't
Nope
.....and relax 👍
I don't really know what you mean here. Thanks for your comment though.
you seem to have blown off some steam! lol
Lol, yeah some. There's more left though.
this could be worth waiting for.......
Elipses.!!!
Lol...I've created an ellipsis-monster. 😁
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