Cryptocurrency is a relatively new investment avenue, and as such, there are many aspects of it that are still unknown. This can be seen in the IRS’s approach to cryptocurrency taxation, with the agency changing its minds multiple times on how it should be taxed.
This has created a great deal of uncertainty for investors, who have been left to either pay their taxes using outdated laws or risk being audited for not paying their cryptocurrency taxes. This has given rise to crypto tax software, which helps investors calculate their taxes accurately and avoid any potential penalties.
I’m a personal finance nerd who’s been writing about money for the last eight years. I have a bachelor’s degree in accounting and have worked as an accountant for two major corporations, but I’ve found my true passion to be helping regular people learn how to manage their money.
I’ve been investing in crypto since 2017 and I’m here to help you understand this new technology and get savvy about your finances. I live in New Jersey with my wife and two kids.
Best Crypto Tax Software
What Are Crypto Tax Software
Crypto tax software is a software that helps users file their taxes quicker and easier than using traditional methods. It makes it possible for the user to pay their taxes with the help of cryptocurrency.
Crypto tax software is an important tool for people who are not familiar with the taxation system or don’t have time to do their taxes manually. It can also be used by those who just want to get rid of the paperwork involved in filing their taxes.
Best Crypto Tax Software Introduction
There are many types of crypto tax software available in the market, but we have narrowed down our list to five best ones that are currently available on the market.
We will also share some important features and benefits of each one that you should know before making your final decision about which one to choose from this list.
Crypto Tax Software – Introduction
As cryptocurrency adoption increases, more and more crypto traders are faced with the same problem: dealing with tax. Crypto tax software is the best solution to this problem.
The biggest problem that crypto traders face when filing their taxes is how to properly account for their cryptocurrency trading activity. This can be a daunting task for even non-professional traders.
For example, if you bought bitcoin for $10,000 and sold it for $15,000 you would think that your capital gain would be $5,000. However, any accountant worth his/her salt will tell you that things are not quite as simple as that.
You also need to calculate your cost basis and account for any fees or other expenses incurred from your transaction. This post will go over some of the basics of cryptocurrency taxation and help you understand what you should expect when filing your taxes this year.
What is the Best Crypto Tax Software?
In this article, I will go over what crypto tax software is, how it works, and the pros and cons of the best ones on the market. Cryptocurrency investors are no stranger to taxes.
Last year’s bull market caused many people whose net worths were tied up in crypto to owe large capital gains taxes for the first time. And when tax season rolled around, those same people realized that calculating their crypto capital gains and losses was a huge headache.
That is why I put together this guide to help you figure out which crypto tax software is right for you. What is Crypto Tax Software? Crypto tax software is a program that helps you calculate your crypto capital gains and losses at the end of the tax year.
If you are new to cryptocurrency investing, here is a brief primer: crypto capital gains are profits from selling cryptocurrency at a higher price than you bought it for, while crypto capital losses are losses resulting from selling it at a lower price than you bought it for. (They can also be realized in other ways, such as exchanging one cryptocurrency for another.)
1. Koinly
Koinly is a cryptocurrency tax app that can automatically calculate your gains & losses and generate tax reports for your crypto portfolio. Koinly calculates gains and losses across all exchanges, wallets, ICOs and airdropped coins.
Most exchanges provide only partial transaction history or do not provide it at all. Koinly can import your data from many different sources so you do not have to manually enter each of your transactions.
When you are done importing your data, Koinly will automatically calculate the gain/loss for each transaction using the FIFO methodology. Once you have calculated your gains, Koinly will generate beautiful reports in a variety of formats that you can send to your CPA or upload during tax filing.
Have you bought Bitcoin, Ethereum or other crypto from an exchange like Coinbase? Have you earned profits from trading crypto on Bittrex?
Has someone sent you crypto for goods or services? If you have answered ‘yes’ to any of these questions then it is time to get started with Koinly and start tracking your cryptocurrency!
Features
Koinly is a crypto tax software that aims to make it easy for crypto users to calculate their taxes and file them with the IRS. The main features of the software include: Tax Reports: The tax report feature allows you to generate an end-of-the-year report that can be handed over to your accountant/tax preparer.
This feature shows all your trades, staking/mining income, ICO purchases and more in a single page.
Tax Optimizer: This tool allows you to create optimized trades so that you can realize losses on your portfolio without having to actually sell any coins.
The Tax Optimizer feature also supports tax loss harvesting which allows you to sell assets at a loss and then purchase the same asset again after 30 days. You can use both these strategies at the same time to reduce your tax bill by a significant amount.
Portfolio Tracker: Koinly helps you track your portfolio by importing data from multiple exchanges and wallets. You can then see the total value of your portfolio as well as detailed charts of changes in value over time.
The data is fetched automatically so all you have to do is connect your wallets and exchanges and Koinly will fetch your transactions automatically.
Pros
Easy to use interface that allows you to easily import your data from all of the popular exchanges and wallets. They offer a mobile app that allows you to view your portfolio on the go.
You can connect your Coinbase and Binance accounts to easily import your trades. They offer a wide range of tax reports including IRS forms 8949, Schedule D, FinCEN Form 114, and more. You can also generate tax reports for countries other than the US.
Koinly integrates with over 350 cryptocurrency exchanges and wallets and automatically syncs your transactions to your Koinly dashboard.
2. Cryptotrader.Tax
If you are invested in cryptocurrency, you need to know about cryptocurrency taxes. The new tax law created more opportunities for cryptocurrency investors and traders than ever before.
In this article, we will cover the basics of crypto tax rules, provide an overview of what is new for 2018, and give you a step-by-step guide on how to calculate your capital gains using Cryptotrader.Tax.
Taxes have always been a pain point for cryptocurrency investors and traders because there has not been much guidance from the IRS or other national governments. In 2014, the IRS issued their first official guidance on the tax treatment of virtual currency transactions.
However, this guidance was rather broad and left many questions unanswered. Since then, the IRS has noticed that only a small percentage of people are reporting their cryptocurrency gains and losses on their taxes.
As a result, they are starting to crack down on non-filers by sending warning letters to major exchanges like Coinbase asking them to provide information about customers who bought or sold virtual currency in 2017.
Features
Tell us your tax filing status, income and location to estimate your tax bracket. We will calculate your estimated taxes on crypto gains and income.
Tell us about each of your cryptocurrency transactions. You can enter amounts in crypto or USD using a simple on-screen form.
Upload your exchange transactions from a CSV file to automatically populate all of your trades. We will calculate your capital gains and losses for every transaction and generate IRS Form 1040 Schedule D along with all the other required crypto tax forms.
Download everything you need to file your taxes: IRS forms, TurboTax file, TaxAct file, complete PDF report, or CSV files of all the information we used to calculate your taxes.
Pros
Easy import: Connect your exchange accounts via API key or upload your trade history and tax reports in .csv format. Accuracy guarantee: If you find a better price for another tax software solution, we will match it and take 10% off.
No hidden fees: We do not charge any extra fees for using multiple exchanges, importing more trades or generating more tax reports. Advanced features: Support for options, futures and other derivatives, short-term and long-term gains calculations, wash sale deductions and cost basis adjustments, support for mining income & expenses and ICOs/airdrops/forks.
Dedicated support: Get access to our team of cryptocurrency tax experts that can help answer your questions via email or phone call.
Tax makes tax reporting for cryptocurrency easy. The platform automates the entire tax reporting process for crypto investors and users. How Does It Work? Simply import all of your historical cryptocurrency transactions into the app.
3. ZenLedger
ZenLedger is a smart personal finance assistant that helps you manage your money, track spending and reach savings goals. With ZenLedger, you can: Connect your bank accounts and credit cards.
See all your accounts in one place. Know how much money you have at any time. Manage your cash flow. Set savings goals and track your progress toward them.
ZenLedger is a tool designed to help crypto investors take control of their taxes. ZenLedger is the only platform that automatically aggregates your crypto transactions from all exchanges and wallets, calculates your gains and losses, and generates your tax forms.
Features
ZenLedger has the features you need to manage your cryptocurrency transactions. We will help you track your income, expenses, deductions and taxes from your crypto transactions.
1.We connect with all of the major exchanges. 2.We support multiple exchange accounts and wallets. 3.We securely store your data so you can access it on different devices. 4.We capture data from all of your exchanges and wallets to give you a holistic view of your financial position. 5.We generate tax forms that are compliant with IRS requirements. 6.Our team of CPAs and tax professionals will answer your tax questions
Pros
Integration with most popular exchanges and wallets: ZenLedger links to your existing cryptocurrency exchange or wallet (like Coinbase, Gemini, Bittrex, etc.), automatically pulls transactions, then identifies each transaction as a short-term or long-term capital gain/loss.
Reasonable fees: ZenLedger’s fees are low compared to CPAs and tax attorneys. For example, I paid $35 for my 2017 crypto tax return.
This is cheap compared to the $300-$500 I would have had to pay a CPA or attorney. The fee increases as your return gets more complicated. If you have many transactions, ZenLedger will charge you a flat monthly fee of $200 (or $1,000 if you are an Institutional investor).
Great customer support: ZenLedger has a live chat feature on its website. When I contacted them with questions about my return, they responded immediately.
ZenLedger crypto tax software supports over 400+ exchanges, including 100+ DeFi protocols, and 10+ NFT platforms. Our crypto tax tool supports more exchanges, coins, wallets, blockchains, fiat currencies, and DeFi & NFT protocols than our competitors, and we are continuously adding new integrations.
4. TokenTax
TokenTax is a cryptocurrency tax software that makes filing your bitcoin and crypto taxes easy. We have built a robust platform with an easy to use interface. We are excited to help you navigate your crypto tax reporting!
TokenTax was founded in early 2017 by Alex Miles, a former investment banker turned entrepreneur, and David Kemmerer, a cryptography expert and former hedge fund partner. After meeting at a cryptocurrency meetup in Chicago, they saw an opportunity to build a software company that would help simplify cryptocurrency taxes for people all around the world.
Taxes for cryptocurrency can be confusing and difficult. Our goal is to make cryptocurrency taxation simple for everyone.
With our software, we handle the complexities of calculating trades and transfers across multiple exchanges. We make short-term and long-term gains calculations simple, so you do not have to worry about getting it wrong.
Why Choose TokenTax for Your Crypto Taxes? Our team has extensive experience in financial services, software development and blockchain technology — we are here to help you with all your crypto tax reporting needs.
Cryptocurrency Tax Filing Made Easy: We automatically download transactions from your exchange accounts to create accurate tax forms that are ready to file or import into TurboTax.
Features
TokenTax is a crypto tax software product that can import your crypto transactions and calculate gains and losses. It offers a wide range of features to make filing your cryptocurrency taxes as simple as possible.
Import Your Transactions: TokenTax makes it easy to import blockchain transactions into our platform with our API integration partners or CSV upload tool. We support over 20 exchanges and wallets, including Coinbase, Binance, Gemini, GDAX, Bitfinex and Kraken.
Calculate Taxes Automatically: After importing your data, we will automatically calculate your capital gains and losses on each transaction to determine what you owe or are owed. We support all the major blockchains such as Bitcoin (BTC), Ethereum (ETH), Litecoin (LTC), Bitcoin Cash (BCH) and Ripple (XRP).
Export Form 8949 Tax Forms: Once you have imported your transactions and calculated your capital gains & losses, you can export IRS form 8949 to attach with your Schedule D when filing your taxes. You can also export capital gain reports for use with TurboTax or H&R Block tax products.
Pros
We are focused on helping you with your cryptocurrency taxes. Our team has been working with crypto for years and we know how it works.
We develop tax tools and work directly with the IRS to make sure we are up to date on the latest tax rules.
We understand how confusing this can be and want to take the stress out of your taxes! Get In Touch With Us
What is TokenTax? TokenTax is a tax software platform that helps cryptocurrency investors calculate capital gains/losses, generate tax forms, and file their cryptocurrency taxes.
While the idea of tracking crypto taxes may seem daunting, most people do not need help tracking their buys and sells. What they need help with is calculating their capital gains/losses and generating the correct tax forms so they can file their returns correctly. This is why TokenTax exists!
The TokenTax software will ease tax filing for crypto traders. The software automatically calculates capital gains and losses and recommends tax-loss harvesting options. This allows traders to gain the benefits of tax minimization strategies without all the effort.
5. TaxBit
TaxBit is the easiest and most secure cryptocurrency tax software for individuals and businesses. It is an online platform that automatically calculates your capital gains and losses on all of your cryptocurrency transactions in real-time to ensure you never miss a gain or loss.
It also provides you with all of the necessary tax forms, including Form 8949, Schedule D, 1040 and others. In addition, TaxBit offers 24/7 customer support to help answer any questions you might have while filing your cryptocurrency taxes.
TaxBit allows you to connect your exchanges, wallets and other accounts through API integration or manual upload so that it can automatically pull in your transaction data. This saves you time by eliminating the need to manually enter all of your transactions yourself.
TaxBit is available both as a web app as well as a mobile app in the Apple App Store and Google Play Store.
Features
Our mission at TaxBit is to make tax compliance simple for everyone. We are working towards that goal by building the industry’s most trusted, easy-to-use cryptocurrency tax solution.
To accomplish this, we have built a variety of features and tools that allow users of all skill levels to complete their cryptocurrency tax filing in minutes. Today, we want to highlight some of our best features:
1.Auto sync your wallets & exchanges: First, we make it easy to upload your transaction data from all the different exchanges and storage wallets you use.
Simply connect the wallet or exchange account where you keep your crypto assets and TaxBit will do the rest — tracking all of your transactions and providing ongoing updates as new transactions occur.
2.Easily view your crypto tax forms: Once you have connected all of your wallets/exchanges to TaxBit, you can easily see how each transaction impacts your tax obligations with our interactive platform.
You can also easily review the full report that will be generated in TurboTax or PDF file format at any time by clicking on the “forms” tab on the upper left portion of the screen. No more guessing how much tax you owe and whether or not you are reporting.
Pros
We are excited to announce TaxBit Pro! Sign up for an annual or monthly plan and get access to all of the best features that TaxBit has to offer.
TaxBit Pro is a subscription service that gives you access to some of our most powerful features, like: Customized tax reports.
These are tailored to you, depending on your specific needs including forms such as 8949, 1040 Schedule D, FBAR, Form 8300 and more. Priority customer support. We will make sure you get any questions answered quickly by our expert customer support team.
Import from exchanges and wallets. You can import all your trades from exchanges like Coinbase and Binance as well as wallet addresses like Metamask and Trezor.
Tax loss harvesting. If you have got losses this year, we can help you recycle those gains into future years to save even more on tax day.
Launched in 2018, TaxBit is a crypto tax software designed to take the mystery out of crypto taxes. The company, located in Salt Lake City, UT provides real-time insights into the tax implications of crypto trades. It also generates IRS Form 8949 or IRS Form 1099 for crypto traders.
6. Cointracker
Cointracker is an analytics and portfolio tracking platform for cryptocurrency. We provide the most accurate and up to date information on all cryptocurrencies.
With over 10,000 cryptocurrencies in existence, it becomes difficult to track them all. Cointracker gives you the ability to track your entire portfolio in real time so you are able to make smarter decisions about what assets to buy, sell or hold.
Cointracker is a cryptocurrency portfolio tracker app. Build a portfolio by entering your trades, or by syncing your coinbase account.
Cointracker is the most trusted cryptocurrency portfolio management platform, available on the web and your mobile device. We are on a mission to build the best crypto product suite to securely track, transact, and invest in digital currencies like Bitcoin, Ethereum, & thousands of tokens.
Cointracker is a cryptocurrency portfolio tracker with an easy to use and intuitive interface. It helps you keep track of your cryptocurrencies and token assets.
Overview This project was bootstrapped with [Create React App](https://github.com/facebookincubator/create-react-app). Learn More You can learn more in the [Create React App documentation](https://github.com/facebookincubator/create-react-app/blob/master/packages/react-scripts/template/README.md).
Features
What more can you ask from a crypto tax software? Cointracker’s unique features make it the easiest and most straightforward way to prepare your crypto taxes. The only cryptocurrency tax software that supports all countries.
Cointracker is the only cryptocurrency tax software that supports every country in the world and automatically calculates capital gains, income, donations, and mining taxes for your local jurisdiction.
Tax Loss Harvesting. Harvesting losses is a powerful tool to reduce your crypto taxes by up to $3000/year. Cointracker scans your transaction history to automatically identify all potential losses and displays them in a simple table with one click reporting to TurboTax or TaxAct.
View All Your Crypto Assets on One Dashboard. See all your assets, including balances and real-time exchange rates all on one page so you can see how much you own at all times.
Pros
Cointracker is a popular cryptocurrency portfolio management service that will save you a lot of time and stress. It provides a great way to keep track of your cryptocurrency investments and is extremely simple to use.
I have used it for years, and I am still using it to this day (I do not plan on stopping anytime soon). It is especially useful for those of us who have sizable portfolios in various cryptocurrencies, as every minute counts when it comes to trading.
Below are some Cointracker Pros: Automatically updates your portfolio with real-time coin prices, calculations, and charts Accessible from anywhere on any device (web platform + iOS/Android apps) Easy tax reporting (generates reports with all your crypto transactions) Connects directly with most major exchanges to automatically import data (no manual entries needed) Free version supports up to 200 transactions (more than enough for most people)
CoinTracker is a cryptocurrency portfolio tracker & tax calculator. It seamlessly integrates your existing cryptocurrency exchanges and wallets.
7. Crypto.io
Crypto.io is a fully decentralized cryptocurrency exchange, the first of its kind. The exchange will allow users to trade directly from their wallets, meaning that there are no deposits or withdrawals and that Crypto.io does not have any control over your funds.
The Crypto.io Exchange dashboard gives traders an overview of their open trades, order history and trade history. Users can browse a list of markets, see the current order book for each market and place orders for different trading pairs.
When placing trades on Crypto.io, users will be able to specify the type of order they wish to place (market or limit), the amount they wish to buy or sell and the price they wish to buy or sell at. Users can also view their portfolio value over time, view their transaction history and view the markets by category (featured, exchange tokens, tokens with fiat pairings and tokens without fiat pairings).
Features
-Charts and technical analysis tools -Easy to use interface with a customizable dashboard -Two-factor authentication (2FA) security -Real time price alerts and notifications -Graphs for Bitcoin, Ethereum, Litecoin, Ripple, BCH and many more cryptocurrencies
Pros
Highly intuitive and user-friendly interface Easy to use for both beginners and advanced users Real-time updates of the crypto market One-click trading Secure cryptocurrency exchange
CEX.IO is a regulated crypto exchange that supports both cryptocurrencies and fiat currency to buy and trade crypto and allows you to buy bitcoin with a credit card instantly, as well as other cryptocurrencies. Before using the platform, the first thing you should figure out is whether it supports your country or not.
What is Crypto Tax Software?
What is Crypto Tax Software? Crypto tax software can help you determine your taxes for cryptocurrency transactions. It does this by automatically calculating your crypto gains and losses, regardless of how many transactions you made.
And, most importantly, it lets you file your taxes directly with the IRS, saving you a lot of time compared to doing it all manually. How Crypto Tax Software Works The crypto tax software that we offer at CryptoTrader.
Tax automatically generates your crypto tax forms based on the transaction history reported to us by the exchanges in which you trade.
This ensures that your data is as accurate as possible and saves you hours upon hours of manual work. It is simple: All you need to do is upload your exchange data, review the results for accuracy, and fill out our questionnaire about yourself (so we can generate the appropriate IRS Form). Then click one button, and voila! You have filed your crypto taxes!
Why Use Cryptocurrency Tax Software?
Cryptocurrency tax software utilizes the latest technology in order to help you accurately report capital gains and income from cryptocurrency transactions. But why should you use cryptocurrency tax software in the first place?
No one likes the idea of paying taxes. Many people would rather avoid them altogether, but that is a terrible idea.
If you do not pay your taxes, or if you underpay them, you could face serious consequences from the IRS and state revenue agencies.
Not only would you have to pay them back with interest, but you could also face some additional fines as well. Another reason to use cryptocurrency tax software is to guarantee that you are not overpaying on your taxes.
If you fail to take advantage of deductions or credits that are available to you, then you are essentially giving the government free money. This is why it is so important to understand how cryptocurrency works in the eyes of the law.
In this guide, we will cover all of these things and more!
Why Use Cryptocurrency Tax Software – Helps ensure that you pay taxes in the right amount
Cryptocurrency tax software helps you minimize mistakes and maximize your potential deductions. It can also help you accurately report on cryptocurrency transactions, which would give you one less thing to worry about during tax season.
You might wonder why you need to use cryptocurrency tax software when filing your taxes if the IRS does not require it. You do not need to use tax software if you only own a few coins, but it can be useful if you buy and sell cryptocurrencies frequently.
For example, if you are an investor or day trader who buys and sells cryptocurrencies multiple times a week, then investing in crypto tax software could be very beneficial. There are many different types of tax software available to help with filing your taxes. Some programs can be downloaded onto your computer while others can be accessed online.
If there is a specific program that offers everything you need for your specific situation, then it can be worth paying extra for the program rather than using the free version
Why Use Cryptocurrency Tax Software – Helps you stay organized
If you are looking to get into cryptocurrency, you will need to learn how it works and how to buy and sell it. But the best way to do that is with a special software program that will help you keep track of your holdings and make sure you do not make any costly mistakes.
There are plenty of cryptocurrency trading tax software programs out there, but we have found ones that are simple, easy-to-use, and well-rated by customers. This year’s version of our list is going to be based on customer reviews only.
The Filing Your Taxes With Cryptocurrency guide expands on top three reasons for using a crypto tax software program: 1) You have more than one coin/token or have held a mix of coins/tokens in different wallets 2) You are buying or selling a large amount of cryptocurrency as part of a trade or several trades 3) You have expensive charges if you use an exchange to buy or sell cryptocurrency
Why Use Cryptocurrency Tax Software – Makes filing taxes easier
Cryptocurrency tax software is a convenient and effective tool that makes tax filing easier. By automating the process of calculating crypto capital gains and losses, it lets you spend less time worrying about crypto taxes.
Here are some of the main benefits of cryptocurrency tax software: Automates calculations: Calculating capital gains can be cumbersome and prone to error. Tax software automates this process for you, making it easier and more accurate to file your taxes.
Saves time: Calculating all of your capital gains will likely take hours, if not days to complete manually. Crypto tax software streamlines this process so you can spend less time filing your taxes.
Simplifies the tax filing process: Crypto tax software also makes the overall reporting process easier. It helps you categorize trades in bulk, generate necessary forms (like 8949), and even file your return directly with the IRS.
If you still need help understanding how cryptocurrency taxes work or how to use crypto tax software to file your returns, check out our guide on how to calculate crypto taxes
Why Use Cryptocurrency Tax Software – Software is specifically designed for cryptocurrency users
Cryptocurrency tax software is one of the most powerful tools that you can use to calculate and calculate the amount of tax payable after the sale of your cryptocurrency. It is a fact that a large number of people are not aware of the fact that they have to pay taxes on their profits.
They fail to realize this aspect and end up paying much more than what they actually owe. The first thing that you need to do when using this tool is to enter all your transactions in a single file.
You should ensure that you have entered every transaction that has occurred within a period of two years.
The reason why you need to do this is because the IRS requires all taxpayers who trade in virtual currencies to provide their transaction history for at least two years. In addition, these details must be provided by those who want to claim deductions for any losses incurred.
What Features To Look For When Choosing Crypto Tax Software
You are probably reading this article because you want to know what to look for in a crypto tax software. To answer that question, we need to first understand the purpose of a crypto tax software, which is to determine your cost basis.
Cost basis is the original value of an asset for tax purposes. It is used to determine capital gain or loss when the asset is sold or disposed of.
The IRS treats cryptocurrencies as property, not currency and this is what makes cryptocurrency taxation so complex.
Because cryptocurrency owners can make hundreds or thousands of transactions in a year, determining their cost basis can be extremely challenging. Here are some features you should look for when choosing a crypto tax software: Automated cost basis calculation: This feature allows you to automatically import all your transactions from different exchanges into your crypto tax software account and will then determine your cost basis based on accounting methods such as FIFO, LIFO and HIFO.
Tax-loss harvesting: This feature allows you to offset your capital gains by deducting your capital losses. The maximum amount of capital losses that can be deducted in any one filing period is $3,000 per taxpayer ($1,500 if married filing separately). If you have more than $3,000 in capital
Crypto Tax Software Features – Exchange Support
In this post I discuss the features that should be considered when selecting crypto tax software. This is the first of a series of posts where I will cover each feature in depth. Exchange Support Most cryptocurrency tax software requires that you import your trades from an exchange.
The best software supports a wide range of exchanges and automatically imports your trades, fees and deposits/withdrawals from those exchanges. You can then review the imported data to ensure it is accurate. One important tip is to only import the coins you are actually trading.
If you have dozens of coins in your portfolio but only trade two of them, only import those two coins. This will help save time and money during tax season by reducing the number of transactions that need to be reviewed for accuracy.
Importing data from an exchange is as easy as connecting your account to the platform via API or uploading a CSV file downloaded from the exchange website.
Crypto Tax Software Features – Frequency of Use
We wanted to see how often users interact with the platform and perform their tax tasks within the software. The results are split into four categories: Daily, Weekly, Monthly and Yearly.
Daily: Identify new crypto transactions (manually or via API) Quickly review past transactions and holdings to plan taxes and future trades.Track tax obligations in real-time as transactions and holdings change.
Weekly: Create new wallets/exchanges or import/merge old wallets/exchanges as needed. Add additional exchange accounts if needed for data aggregation.
Monthly: Review portfolio information for accuracy of information before filing taxes, including adding exchange and wallet data for the year so far if not added earlier in the year.
Crypto Tax Software Features – Price
CryptoTrader.Tax offers their software in three tiers: Basic — $49/year The basic tier is ideal for individuals who have made less than 20 transactions per year and only have income from crypto-to-crypto trades. The basic plan offers unlimited tax reports and allows you to import up to 200 transactions per year.
Plus — $99/year The plus plan is designed for crypto traders who have made up to 1000 transactions per year, including those in the United States, Europe and other countries outside the US. This plan also permits you to import up to 1,000 transactions (200 imports per exchange) and generate unlimited capital gains reports.
Premium — $199/year The premium plan is best suited for crypto investors with more than 1,000 transactions or those who want to automate their entire tax reporting process. This plan supports unlimited imports from an unlimited number of exchanges and provides unlimited tax reports.
You will also receive a dedicated support manager for assistance. All plans offer free audit assistance as well as unlimited exports of your reports into PDF format or as a CSV file. The company’s full feature list can be found here
Crypto Tax Software Features – Coin Tracking
CoinTracking is the epitome of convenience. If you have the discipline to upload all the trades you make each tax year, the software takes care of everything else. You can even import your forks and airdrops into the system.
However, because CoinTracking does not integrate with any exchanges, uploading trade history is a manual process. This adds an extra layer of work for people that are not used to keeping track of their crypto transactions.
If you struggle to stay on top of your crypto transactions, then you will probably forget to update your CoinTracking account, leaving you with an incomplete tax report when tax season rolls around.
Additionally, CoinTracking assigns a fee to every trade by default (even if it is zero). While this is not a huge deal and can be changed manually, it may be confusing for beginners.
Crypto Tax Software Features – Data Importing
How to import your data into the crypto tax software There are two ways to get your data into the crypto tax software. You can either upload a file or use the API to connect your exchanges and wallets.
If you choose to upload a file, you must follow these steps: Select Upload File from the main menu. Select the exchange or wallet you got your data from.
If you do not see your exchange or wallet listed, select Other Exchange and wallet in this screen.
Follow the instructions on the screen for how to get your data from that exchange or wallet. Download the template file so that you know what format your data needs to be in.
Enter your transactions into that template file. If there are any fields that you do not have information for, leave them blank. Do not delete any columns!
Some of them may be calculated automatically by the system when you move on to creating your reports.
Just click Next when done entering all of your transactions. Upload the completed CSV file by clicking Choose File, selecting the file on your computer, and then clicking Upload & Continue. If everything looks alright, click Continue to Reports. The next page will show you which exchanges and wallets have been connected so far, as well
Crypto Tax Software Features – Automatic and Secure Backup
You cannot afford to lose all of your transaction data. What if you accidentally delete a spreadsheet or there is a system error?
You need to be sure that your information is backed up so it can be easily recovered in the event of an emergency.
It is also important to back up your information so you can use it on multiple devices. If you want to make sure that your data is protected, you need to find crypto tax software with automatic backup and recovery features. Here is how automatic backups work:
Automatic Backups: Automatic backups are the easiest way to protect your data. Typically, this feature will automatically upload your data to the cloud as soon as you finish working so that it is always protected.
Your information will be kept in the cloud and you will be able to retrieve it from any device whenever necessary.
Recovery features: In addition to backing up your information, you also need a program with recovery features.
This feature allows you to recover lost data in case of an emergency, allowing you to keep track of all of your cryptocurrency transactions even if something happens. If something does happen and you need access to your data again, simply log into the program and restore it from the cloud storage server. With this type of feature
Crypto Tax Software Features – Tax loss harvesting
If you are not familiar with the term tax loss harvesting, it is a strategy used to offset your capital gains. If you have a losing investment and you sell it, you can offset the gains of another investment that is profitable.
The best way to do this is to sell a losing investment and then buy back the same amount of the same asset after 30 days. This allows you to keep your holdings the same but offset any gains on other investments.
At BearTax we have built a number of tools to help perform tax loss harvesting in various scenarios. In our previous blog post, we discussed Smart Loss Harvesting which automatically identifies losses on transactions and suggests ways in which users can harvest those losses immediately or wait till end of year, based on their preference.
In this blog post we will discuss another feature that lets users make use of their losses – Airdrops, Forks and Swaps. We will look at each one by one.
Crypto Tax Software Features – Crypto to FIAT Conversions
Crypto tax software is an important tool to use when filing your crypto tax returns. This article will provide information on crypto to FIAT conversions for crypto tax software.
Cryptocurrency is often treated like property for tax reporting purposes. As such, you will need to know the fair market value of each cryptocurrency when you sell it in FIAT currency (USD).
You can then report a capital gain or loss on this transaction. In order to calculate a gain or loss, you will need to know the purchase price and sale price of the cryptocurrency in USD.
There are different rules depending on if you hold the cryptocurrency as a short-term or long-term investment.
Most crypto exchanges do not report your cost basis or fair market value in USD. Some exchanges, such as Coinbase, provide a “Cost Basis for Taxes” report that shows the proceeds from each sale including cost basis and fair market value at the time of sale.
Other exchanges may include this information with their 1099-K and 1099-B forms. If your exchange does not report this information and you are required to file taxes on cryptocurrency transactions, you will need to record all relevant data yourself using a spreadsheet or other method.
Crypto Tax Software Features – Income Tax
Crypto tax software has a lot to offer you in the way of features for your income tax return. It is important to know what these features are so that you can make the most of them.
Here are some of the most common Crypto Tax Software Features – Income Taxes.
Income Tax Return Calculator: This is a very important feature because it helps you to calculate the amount of money you need to pay on your taxes. The calculator will help you determine the amount of taxes you owe based on your income and expenses during the year.
You can also estimate how much money you will be able to save by calculating your taxes before filing them. This way, you will be able to plan ahead and save money in advance when filing your taxes next year. Tax Deduction Checklist: This is another feature that is offered by many Crypto tax software packages.
You can use this feature to keep track of all of your deductions and credits so that you do not miss out on any of them when it comes time to file your taxes. Income Tax Return Assistance: There are many different types of tax assistance available on the Internet today.
You should start by looking into what kind of help is available for preparing your income tax return and then choose one that best meets your needs.
Crypto Tax Software Features – Staking Rewards
Staking rewards are a new feature that have been added to many cryptocurrencies. Staking works similarly to receiving interest on your savings account, but instead of keeping your money in the bank, you keep it on a cryptocurrency exchange or in your wallet.
Every time you stake, you are rewarded with more of that currency.
This has a few benefits for crypto investors and traders. For one, staking can be a good way to earn more money from your crypto assets without having to buy more cryptocurrencies.
You also do not have to worry about the risks of trading cryptocurrencies. And finally, it is an easy way to store cryptocurrency long-term without having to worry about losing it.
If you have recently started staking cryptocurrency, there are things you should know about how staking is taxed by the IRS. Staking Rewards Are Taxable Income
Crypto Tax Software Features – Crypto donations
Crypto donations are the crypto equivalent of stock donations. For example, say you buy 1 BTC for $10,000 and then donate it to a charity when it is worth $20,000. The difference in value, $10,000 is your charitable donation deduction.
The IRS has mentioned in their guidelines that you must subtract the fair market value of any goods or services received as part of your charitable contribution. In other words, if you receive something for a crypto donation (e.g., merchandise), then you can only deduct the difference between the value of what you donated and what you received from the charity.
Crypto donations are not taxable events but can create capital gains which are taxable events depending on how they are handled by the receiving charity. It is important that you keep an accurate record of your crypto donations since they can be used as deductions while filing taxes.
ZenLedger will help you track all your crypto donations and help complete Schedule A – Itemized Deductions section in your tax return.
Crypto Tax Software Features – Margin trading
Crypto Tax Software Features – Margin trading Any crypto exchange that allows margin trading is going to be complex and challenging to report on. There are two kinds of margin trades: margin account cash trades and margin account futures trades. The tax code treats them a little differently.
Margin account cash trades If you buy on margin, then sell the same asset for a gain, that is a short-term capital gain taxed at ordinary rates (up to 37%). If you buy on margin, hold for more than one year, and then sell at a gain, that is a long-term capital gain taxed at up to 23.8%. Margin account cash trades are simple.
Margin account futures trades Futures contracts are often traded on margin. This can get super complicated, but we will try to keep it simple here. For the initial position (where you open the short or long trade), 60% of your gains are treated as long-term capital gains, regardless of how long you hold it for.
40% is treated as short-term capital gains. Futures contracts have different tax treatment from other crypto assets because they are considered Section 1256 Contracts by the IRS.*
Crypto Tax Software Features – Calculating capital crypto gains/losses
To calculate your taxes on a crypto asset, we need to know the initial cost basis of that asset. The cost basis is the amount you paid for the asset (or the market value at the time it was received as a gift).
This means that even if you only mined 1 coin, you will need to know the price of a coin when you mined it. The IRS has classified Bitcoin and other cryptocurrencies as property. Since Bitcoin is property, we need to calculate capital gains and losses from buying and selling cryptocurrency.
In order to do this, we use your cost basis as well as the price of Bitcoin or Ethereum at the time of transaction. In this article we will cover: How CryptoTrader.Tax calculates your gain or loss on a trade by using both your cost basis and market value at the time of sale.
How CryptoTrader.Tax calculates your Short Term vs Long Term capital gains using First In First Out Accounting (FIFO) or Last In First Out Accounting (LIFO). How CryptoTrader.Tax determines whether your trade qualifies as a like-kind exchange in 2018 and earlier years.
Crypto Tax Software Features – Trading/dealing fees
If you are receiving airdrops or hard forks, you should check with your tax advisor to determine if any of the income is taxable. If you make trades on multiple exchanges, it is important to be able to aggregate all of that transaction data into one account.
The best crypto tax software will provide you with a way to do that. When you are filing taxes and using accounting methods like FIFO, LIFO, or specific identification, it is vital that you have all of the data in front of you so that you can accurately calculate your gains and losses.
You might also be required to pay a trading fee when buying and selling cryptocurrency. If so, then the cost basis of your sale should include the trading fee.
The best crypto tax software will allow you to add trading fees like this into your crypto transaction data.
Crypto Tax Software Features – Cryptocurrency gifts
We are now introducing an exciting new feature for the CryptoTrader.Tax Premium Plan that will help you identify your cryptocurrency gifts throughout the year.
Many holders receive crypto as a gift from friends and family and may not know how to properly report this on their taxes. With our new features, you can automatically identify and categorize all of your cryptocurrency gifts to make tax reporting even easier!
How it works: 1-For each gift transaction, we will automatically mark it as a “gift” based on the description in the transaction. If you do not see your gift transaction marked as such, feel free to manually change the category to “gift” in the transaction details page.
2-If the gift is received from a non-taxable source (i.e. a friend or family member) it will automatically be excluded from your capital gains calculations and reported on your 8949 as an excluded transaction.
3-If you receive crypto as a gift from an exchange, it will be added to your cost basis and included in your capital gains calculation and 8949 totals.
Crypto Tax Software Features – Price fluctuation
We have a couple of exciting new features that will help you track your crypto holdings! Price Fluctuation In the history view, you can now see the price fluctuation within any given time period. Price fluctuations are displayed as a percentage.
The price fluctuation is calculated using the lowest and highest price of the coin within the selected time period. If the price went down, it will be displayed with a minus (e.g. -10%). Coin Price Chart for Time Period Along with displaying the total value of your holding for a given time period, we now display the average price for each coin within that time period.
The data is displayed in graph form so that you can see how your coins performed over time. This is useful when calculating short-term vs long-term gains and losses for tax purposes.
Crypto Tax Software Features – Exchange accounts
Crypto tax software features are important for keeping your cryptocurrency gains and losses organized, which is crucial when you are filing your taxes. I have already talked about the importance of storing your crypto tax information in a secure way and how to choose the best cryptocurrency tax software for your situation.
In this article, I will cover the features that a top-notch crypto tax software provides. First, you can use a free crypto tax software solution as long as it helps you calculate your capital gains and losses.
However, if you want to sync up all of your exchange accounts, you will need to pay for their service.
For example, in order to sync up my Coinbase account with CryptoTrader.Tax’s software, I had to upgrade my account. Once I did that, my cost basis was automatically calculated using the FIFO method (first in first out).
Crypto Tax Software Features – Ease of use
In order to use crypto tax software, you will need to import your data. There are thousands of wallets and exchanges that all have varying ways of exporting data.
It is important to understand how much effort is required to import your data before you decide which software to use. The first thing you will need to do is choose the wallets and exchanges you want to import your data from.
Most crypto tax platforms allow you to import data from a very broad range of exchanges, but some limit the number of exchanges they support. When choosing which exchanges you want to import from, it is important to consider how many transactions you have on each exchange, as well as the accuracy of your records on each exchange.
For example, if you have 100 transactions on an exchange and are missing 15 transactions for whatever reason, then it might not be worth importing the data from that exchange in order to save time later when completing your taxes.
It is also worth considering whether or not the exchanges you want to import from will automatically connect with the tax software. Tax platforms such as CoinTracking allow users to connect their exchange accounts so they can download their data directly through their API.
If a platform does not support this, then it will likely require users to manually export their transaction data in a CSV
Crypto Tax Software – Frequently Asked Questions
How much does it cost? Right now, we are offering a promotional price of $49.95. This includes all the features outlined above as well as support. We cannot guarantee this price will be in effect forever, so take advantage of it while you can!
What kind of support do you offer? CoinTracker offers 24/7 email support and is quick to respond. We also offer live chat support during business hours at www.cointracker.io.
What happens when I invite my friends? They will get a free month upgrade and you will get another free month for each friend that signs up. Why should I use CoinTracker instead of just doing it myself? CoinTracker is designed to make your life easier, so you can focus on what really matters for your business.
Additionally, our software is designed to detect errors and inconsistencies in your tax documents and alert you to any data that seems incorrect or missing, saving you from making costly mistakes or getting audited by the IRS.
How many coins do you support? We currently support Bitcoin (BTC), Ethereum (ETH), Litecoin (LTC) and over 2,000 other coins including major altcoins like Ripple (
Best Crypto Tax Software – Wrap Up
CoinTracking is the best analysis software and tax tool for Bitcoins. With its excellent reporting feature, it helps you to establish a strong audit trail and also file your tax returns without any hassle, thereby saving time and money.
With all of these software programs, you can fill out your crypto taxes online. You do not need to download anything. The software will walk you through the necessary steps for filing your crypto tax return.
It is a simple process that consists of uploading or entering your crypto trades and generating the appropriate crypto tax forms. Nothing you cannot handle This is a great time to be involved with cryptocurrency.
There is so much opportunity to make money and build wealth by investing in this new technology. As a result, many people are curious about how to buy Bitcoin and other cryptocurrencies.
In fact, we have written an entire article on this topic: How To Buy Bitcoin: A Beginners Guide (2020). We hope that you found this article on the best crypto tax software helpful.
