Crypto tips for your small business

Top tips for crypto and good practices for small businesses.

Are you a small business owner paying salaries and wages in crypto or receiving it as payment? Are you an established trader buying crypto stock as a business investment? Are you a crypto asset business?

Crypto is becoming more mainstream within the small business community. It’s a good idea to understand how crypto assets may have an impact on your tax obligations.

Small business crypto tips:

• If you run a crypto asset business, the cost of buying crypto assets is a deductable expense.
• If you’re paid in crypto assets for your services, the monetary value of the crypto assets is classified as ordinary income of the business.
• If you’re using crypto assets to pay salary or wages under a valid salary sacrifice arrangement with your employee, this is a fringe benefit.
• If you make a profit from the sale of crypto, the tax treatment will depend on whether you are carrying on a crypto asset business or as an investor.  If you are carrying on a crypto asset business, the crypto assets are treated as trading stock and the proceeds of selling them are assessable as ordinary income. If you hold the crypto assets as an investment, the sale of your crypto assets is a capital gains tax (CGT) event.

Keep records of your crypto transactions to prevent damage and protect information from being changed. For information on what records you need to store, visit keeping crypto records.

You can seek professional help and advice from our registered tax professional to discuss your tax obligations.

Source: ATO