Investor or Trader in Crypto?

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Taxpayers who invest into crypto should be wondering if they are considered a crypto investor or crypto trader and the difference between the two.

Investor: Typically buy, sell or swap crypto with the intention of holding it for long term growth and aim to generate returns over a long period of time.

Tax treatment:

  • Crypto are assets and are subject to CGT when sold or exchanged for another crypto
  • Capital losses can offset capital gains
  • Eligible for the 12-month discount when crypto was held for more than 12 months

Trader: Typically intents to buy and sell crypto for short term profits

Carries on a business:

  • Plans when to buy and sell
  • Keeps extensive records
  • Trade repeatedly and in volume
  • Invest significant capital
  • Has a separate office space

Tax treatment:

  • Crypto is treated like trading stock
  • Profits are treated as ordinary income and should be reported in the tax return. This includes any gains from the sales and any trading fees/ commissions incurred
  • Losses are treated as deductible expenses
  • Not eligible for the 12-month discount when crypto was held for more than 12 months

If you have crypto and need guidance on this matter, please contact our office at 03 9973 5905.

Repair vs Maintenance vs Improvement

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Many taxpayers confuse the difference between repairs, maintenance and improvement. They are tax deductions but are treated differently for tax purposes. Here are the differences:

Repair

Repair is work to resolve wear and tear to the property to bring it back to its original condition. E.g. Replacing part of a fence, fixing a crack in the plaster, patching a roof, repairing a malfunctioning piece of machinery

Maintenance

Maintenance is work to prevent deterioration in the condition of an asset. E.g. Repainting walls, maintenance plumbing

Improvement

Improvement is increasing the value of the property by enhancing the item beyond its original state at the time of purchase. This would either be classified as a capital works deduction or a capital allowance deduction.

Capital works: Deductions relating to building’s structure and items fixed to it. These are claimed at a rate of 2.5% per year for 40 years following construction. E.g. retiling the bathroom, replacing all the fencing, major renovations, adding a fence

Capital allowance: Deductions that can be easily removed from the property. These are claimed over the effective life the Commissioner has determined or your own reasonable estimate of its effective life. E.g. Replacing a light fitting in the bathroom, installing a new carpet, installing, new curtains

There are exceptions to this. When you first purchase an investment property, you may need to carry out repairs before renting it out. These are known as ‘initial repairs’ and will be added to the cost base.

If you are still confused about the distinction, please contact our office at 03 9973 5905.

Tax Deductions for Hospitality and Retail Workers

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If you are a waitress, sales assistant, barista or a retail manager, you can claim the following deductions. You can only claim a deduction if 1) you spent the money and were not reimbursed, 2) was directly related to your income and 3) have a record to prove it. If you work in hospitality or retail, here is what you can claim:

  • Car expenses: Costs between different jobs on the same day or between different stores for the same employer e.g. fuel, registration, insurance, parking, tolls, repairs, depreciation (logbook) or work-related business kilometres (cents per kilometre)
  • Travel expenses: Accommodation, airfares, taxis, parking, meal costs (overtime or away) and tolls if travelling for work.
  • Clothing: Compulsory uniform with a logo, provides protection e.g. aprons, protective gloves, hair nets, or is occupation-specific e.g. chef’s hat
  • Laundry/ cleaning of work-related clothing
  • Seminars and conferences
  • Self-education: Course fees, books, manuals
  • Union/ association fees
  • Licenses: RSA or gaming license
  • Tools and equipment: If it’s more than $300, the deduction can be claimed over a number of years. If it is less than $300, an immediate deduction for the whole cost can be claimed
  • Stationery

If you work in hospitality or retail and require assistance on this matter, please contact our office at 03 9973 5905.

Tax Deductions for Medical Professionals

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Medical Professionals include nurses, doctors, pharmacists and many more. You can only claim a deduction if 1) you spent the money and were not reimbursed, 2) was directly related to your income and 3) have a record to prove it. If you are a medical professional, here is what you can claim:

  • Car expenses: Costs between different jobs on the same day or between different clinics for the same employer e.g. fuel, registration, insurance, parking, tolls, repairs, depreciation (logbook) or work-related business kilometres (cents per kilometre)
  • Clothing: Compulsory uniform with a logo or provides protection e.g. lab coats, surgical caps, masks, gloves, hair nets, scrubs
  • Laundry/ cleaning of work-related clothing
  • Travel expenses: Accommodation, airfares, taxis, parking and tolls if travelling for work e.g. visiting patients in different hospitals
  • Medical equipment: If it’s more than $300, the deduction can be claimed over a number of years. If it is less than $300, an immediate deduction for the whole cost can be claimed. E.g. stethoscopes, surgical instruments, blood pressure monitors
  • Medical publications
  • Professional indemnity insurance
  • Union/ association fees: E.g. Australian Medical Association
  • Self-education: Course fees, books, manuals, journals
  • Seminars & conferences
  • Home office running: Actual running expenses, at a rate of 67 cents per hour (2023) or 52 cents per hour (2022)

If you are a medical professional and require assistance on this matter, please contact our office at 03 9973 5905.

Tax Deductions for Office Workers

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Office workers can claim a variety of deductions as the term ‘office workers’ can include managers, IT staff, marketing staff, admin staff and pretty much anyone who works in an office. You can only claim a deduction if 1) you spent the money and were not reimbursed, 2) was directly related to your income and 3) have a record to prove it. Here is a list of tax deductions you can claim if you are an office worker:

  • Car expenses: Costs between different jobs on the same day or from your office to a client site/ office e.g. fuel, registration, insurance, parking, tolls, repairs, depreciation (logbook) or work-related business kilometres (cents per kilometre)
  • Clothing: Compulsory uniform with a logo
  • Laundry/ cleaning of work-related clothing
  • Travel expenses: Accommodation, airfares, taxis, parking, meal costs (overtime or away) and tolls if travelling for work.
  • Tools and equipment: E.g. computer, tablet
  • Printing & stationery
  • Seminars & conferences
  • Union fees
  • Self-education: Course fees, textbooks, manuals
  • Subscriptions to job related magazines and journals
  • Software fees
  • Home office running: Actual running expenses, at a rate of 67 cents per hour (2023) or 52 cents per hour (2022)

If you work in an office and require assistance on this matter, please contact our office at 03 9973 5905.

Tax Deductions for Tradies

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If you are a tradie, you would usually spend long hours working on site and pay for your work-related expenses out of pocket, which means you don’t have much time to think about taxes. You can only claim a deduction if 1) you spent the money and were not reimbursed, 2) was directly related to your income and 3) have a record to prove it. Here is a list of tax deductions you can claim:

  • Clothing & protective items: Has a logo or provides protection e.g. hi-vis vests, ear muffs, boots, safety glasses, masks, helmets and sunscreen
  • Laundry/ cleaning of work-related clothing
  • Tools & equipment: If it’s more than $300, the deduction can be claimed over a number of years. If it is less than $300, an immediate deduction for the whole cost can be claimed.
  • Office: Tablet, computer, internet & mobile phone (work-related portion)
  • Permits and licenses: Forklift or heavy vehicle permit
  • Self-education: Certificates, upskilling courses, books, manuals, stationery
  • Car expenses: Costs between home and work if you are required to transport bulky goods and tools e.g. fuel, registration, insurance, parking, tolls, repairs, depreciation (logbook) or work-related business kilometres (cents per kilometre)
  • Union fees
  • Travel expenses: Parking and tolls if travelling for work e.g. attending a job site in a different location

If you are a tradie and need more assistance on this matter, please contact our office at 03 9973 5905.

Tax Deductions for Teachers

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Teachers often pay for their work-related expenses out of pocket. If you are a teacher, you can claim the following. You can only claim a deduction if 1) you spent the money and were not reimbursed, 2) was directly related to your income and 3) have a record to prove it.

  • Car expenses: Costs between different jobs on the same day, from your school to another school or visiting students’ homes e.g. fuel, registration, insurance, parking, tolls, repairs, depreciation (logbook) or work-related business kilometres (cents per kilometre)
  • Teaching supplies that were not paid or reimbursed by your school
  • Permits and licenses: Working with children check renewal
  • Office: Tablet, computer (work-related portion)
  • Clothing: Compulsory uniform with logo, sunscreen, hat when working outside, face masks, hand sanitiser
  • Laundry/ cleaning of work-related clothing
  • Self-education: Course fees, books, manuals, first-aid courses
  • Seminars, workshops & conferences
  • Union/ membership fees
  • Printing & stationery
  • Work related books, magazines and journals
  • Home office: Actual running expenses or at a rate of 67 cents per hour (fixed rate)

If you are a teacher and require assistance on this matter, please contact our office at 03 9973 5905.

Tax Deductions for Factory Workers

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If you are a factory or warehouse worker, you can claim the following deductions. You can only claim a deduction if 1) you spent the money and were not reimbursed, 2) was directly related to your income and 3) have a record to prove it.

  • Car expenses: Costs between different jobs on the same day or from the warehouse to a job site e.g. fuel, registration, insurance, parking, tolls, repairs, depreciation (logbook) or work-related business kilometres (cents per kilometre)
  • Travel expenses: Accommodation, airfares, taxis, parking, meal costs (overtime or away) and tolls if travelling for work e.g. travelling between job sites
  • Clothing: Protective items e.g. boots, ear muffs, helmets, safety goggles, gloves or hi-vis vests
  • Laundry/ cleaning of work-related clothing
  • Permits and licenses: Forklift or heavy vehicle permit, health and safety certificates
  • Self-education: Course fees, books, manuals
  • Office: Tablet, mobile phone (work-related portion)
  • Union/ membership fees
  • Tools and equipment: If it’s more than $300, the deduction can be claimed over a number of years. If it is less than $300, an immediate deduction for the whole cost can be claimed.

If you work in a factory and require assistance on this matter, please contact our office at 03 9973 5905.

Federal Budget 2023-24

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hands of adult and child holding money jar, donation, saving, fundraising charity, family finance plan, inflation, superannuation, investment, retirement concept

The budget was handed down by Treasurer, Dr Jim Chalmers on 9 May 2023. Below are the key takeaways:

Businesses

The temporary full expensing measure will finish on 30 June 2023, but small businesses will have access to the temporary $20,000 instant asset write off until 30 June 2024.

A new incentive called ‘The Small Business Energy Incentive’ will be offered to businesses with an annual turnover of less than $50 million to electrify and save on their energy bills. These businesses will have access to a bonus 20% tax deduction for eligible assets supporting electrification and more efficient use of energy for the 2024 financial year. The maximum that can be claimed through the Energy incentive is $20,000, meaning $100,000 worth of expenditure will be eligible.

Personal

There are no changes to the planned stage 3 tax cuts that will apply from 1 July 2024. The tax cut will abolish the 37% tax bracket and lower the 32.5% tax bracket to 30%. Below is a table of the changes:

There are also changes to the Medicare Levy surcharge which have had no changes since 2014. Below is a table of the changes:

Date 1 July 2020- 30 June 2024 1 July 2024 onwards
Rate (%) Income range ($) Income range ($)
Nil 0 – 18,200 0 – 18,200
19 18,201 – 45,000 18,201 – 45,000
30 N/A 45,000 – 200,000
32.5 45,001 – 120,000 N/A
37 120,001 – 180,000 N/A
45 >180,000 >200,000

1 July 2014- 30 June 2023

Threshold Base tier Tier 1 Tier 2 Tier 3
Single ($) >90,000 90,001 – 105,000 105,001 – 140,000 >140,001
Family ($) >180,000 180,001 – 210,000 210,001 – 280,000 >280,001
Surcharge 0% 1% 1.25% 1.5%

1 July 2023 onwards

Threshold Base tier Tier 1 Tier 2 Tier 3
Single ($) >93,000 93,001 – 108,000 108,001 – 144,444 >144,441
Family ($) >186,000 186,001 – 216,000 216,001 – 288,000 >288,001
Surcharge 0% 1% 1.25% 1.5%

Superannuation

From 1 July 2026, employers will be required to pay their employees’ super at the same time as their wages rather than quarterly, making it harder for employers to not pay super. Significant administration changes will be required to make the transition seamless. The super guarantee rate will also increase from 10.5% to 11% from 1 July 2023, as already legislated.

Individuals with balances over $3 million will be subject to an additional 15% tax. This tax will relate to the portion of the balance over $3 million and is set to affect 80,000 individuals. Revenue from the new tax is estimated to be $2 billion per year.

If you would like to discuss the Budget 2023 in further detail, please contact our office at 03 9973 5905.

Working from Home

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The ATO has introduced a revised fixed rate method for claiming work-related expenses when working from home.

From 1/07/2022, under the revised fixed rate method, individuals who work from home as part of their employment can claim a deduction of 67 cents for every hour worked from home, which covers expenses such as electricity, gas, mobile, stationery and internet usage. This means that the maximum deduction that can be claimed using this method is $1,286.40 per year, based on working from home for 40 hours per week for 48 weeks per year.

The revised fixed rate method is intended to simplify the process of claiming work-related expenses while working from home. It is an alternative to the actual cost method, which requires individuals to keep a detailed record of all their home office expenses and calculate the percentage of work-related use. However, taxpayers are required to keep a record of all the hours worked from home for the entire income year. Records can be in the form of timesheets, rosters or a diary from 1 July 2022 to 28 February 2023. From 1 March 2023, taxpayers are required to record the total number of hours they worked from home.

It is important to note that deductions for the decline in value of depreciating assets when working from home such as office equipment are calculated separately. The shortcut method of 80 cents per hour and the fixed rate method of 52 cents per hour will also not be available from 1/07/2022. The below table summaries which method can be used in which years.

Method Financial year
Actual cost Any year
Fixed rate method- 52 cents per hour 2019

2020

2021

2022
Shortcut method- 80 cents per hour 1 March 2020- 30 June 2020

2021

2022
Revised fixed rate method- 67 cents per hour 2023

If you work from home and require assistance on this matter, please contact our office at 03 9973 5905.