Best Crypto Tax Software
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Best Crypto Tax Software
Even if the cryptocurrency market is currently experiencing a great deal of bustling enthusiasm, new investors should keep in mind that taxes are a crucial factor that cannot be disregarded when entering this market. Here, we analyze the best crypto tax software offerings to help you choose the right one for your needs. With the right tools in place, you can confidently file your cryptocurrency taxes, and avoid any surprises down the road.
As any tax professional will tell you, doing your taxes correctly is difficult even when they are straightforward. With the ever-changing landscape of tax regulation, it can be even more so calculating complicated taxes and challenging to stay up-to-date and compliant.
This of tax liabilities is especially true for traders of cryptocurrencies and non-fungible tokens (NFTs), who may find themselves on slippery ground when it comes to taxes. This can make filing your taxes a daunting task.
Read on for our in-depth crypto tax software reviews and an explanation of how the best crypto tax calculator software can help you to complete your tax reporting swiftly and accurately.
What is Crypto Tax Software?
Crypto Tax Software is any type of computer program that simplifies the management of the taxes related to your participation in the cryptocurrency market.
Crypto tax software automates a number of tax-related tasks in addition to managing your cryptocurrency assets. Furthermore, based on the three top crypto tax software here, it may be used to synchronize portfolios for numerous cryptocurrencies between exchanges and wallets. But which is best? This is what we will outline in this review.
NOTE: After choosing a piece of software, hopefully, from the list reviewed below, you must link it to your wallet or exchange account. The software will then automatically manage all of your transactions, including buying, selling, trading, and even accepting cryptocurrencies as payment, after this has been done.
The majority of the world operates in a way where cryptocurrencies are taxed similarly to traditional types of investments, despite the fact that there are a small number of nations where cryptocurrency owners are not concerned with capital gains or other types of taxes on their bitcoin and other crypto assets.
Because many cryptocurrency users frequently switch between various tokens and coins and operate across different exchanges supported major tax filing platforms, it’s imperative to acquire support in the form of crypto tax software. Let’s examine some of the top crypto tax and accounting software products now available.
Crypto Tax Software Reviews
- Ledgible
- Koinly
- CoinLedger
- TaxBit
- Accointing
- Zenledger
Ledgible
Ledgible is crypto tax software that helps you keep track of your crypto investments and their tax implications. The software is easy to use and offers a variety of features that make it a valuable tool for both crypto traders and investors. Ledgible connects to all major crypto exchanges and wallets, so you can easily track your transactions.
The software also provides real-time insights into the tax implications of your crypto trades, so you can make informed decisions about your investment strategies. Ledgible is a valuable tool for anyone who wants to stay compliant with the ever-changing tax laws surrounding crypto investments.
Ledgible pricing:
Tax Professionals:
Tax professionals can utilize Ledgible Crypto Tax Pro without paying a fee. Direct fees are assessed to clients on a per-client basis. For particular needs, there are also specialized pricing and billing options.
Consumers:
For consumers, Ledgible Crypto Tax offers simple and upfront pricing. Due to the scalability of their technology and the cumulative nature of transaction expenses, consumers only pay for what they really use.
- $49 tax-yearly reporting and transactions are up to 200
- Transactions of up to 200-1000 cost +$50 for
- Transactions of up to 2,500 over 1,000 costs +$100
Read more in our full review of Ledgible.
Koinly
The most widely used option for crypto tax software is probably Koinly; it has a simple, user-friendly layout and is excellent for novices. Using API keys or CSV files, you may quickly import trades you executed in the previous year from all of the exchange accounts. You can also keep track of changes to the public addresses linked to your more private cryptocurrency holdings.
With the Free plan, you may import all of your data and check your cryptocurrency capital gains and income; but, a $49 annual membership gets you a comprehensive report that you can use or give to your tax accountant.
With Koinly, even new kinds of cryptocurrency finance like staking, borrowing, and lending may be tracked. You can monitor the overall losses or calculate capital gains all throughout the tax year, thanks to the fully comprehensive portfolio tracker that is part of our cryptocurrency tax software. Even better than getting caught off guard once tax season arrives, you can keep track of your anticipated capital gains taxes over time.
Koinly pricing:
- Free cost $0 yearly
- Newbie cost $49 per tax yearly
- Hodler cost $99 per tax yearly
- Trader cost $179 per tax yearly
- Pro cost $279 per tax yearly
CoinLedger
Investors can use CoinLedger, formerly CryptoTrader.Tax to get around tax obligations in the emerging crypto-economy. Any bitcoin user may quickly and simply comprehend their portfolio with their suite of tools, and they can also create the relevant tax documents.
You can import your trades from practically any cryptocurrency exchange, with the exception of CryptoTrader, much like Koinly. Tax is a popular option for many cryptocurrency users who also work in the bitcoin and larger cryptocurrency industries due to its added features centered on crypto income and tax calculations.
CoinLedger offers a suite of products designed to aid cryptocurrency enthusiasts on their investing journey.
- Tax software that allows you to report all your transactions in minutes.
- Free portfolio tracking so you can keep a close eye on all of your crypto holdings.
- A library of educational articles, videos, and eBooks on crypto tools and taxes.
CoinLedger pricing:
- Hobbyist cost $49
- Day Trader cost $99
- High Volume cost $199
- Unlimited cost $299
Learn more about CoinLedger in our full CoinLedger Review Post
TaxBit
The next of our crypto tax software reviews is for Taxbit.
Due to its emphasis on enterprise solutions, TaxBit is a well-liked substitute for several other prominent options in the market for cryptocurrency tax software.
TaxBit can assist cryptocurrency companies with handling tax automation for their end users, even though they also provide the same sort of automation for individuals found with other solutions. TaxBit is also supported by well-known cryptocurrency companies like Winklevoss Capital and Coinbase Ventures.
Though costing more at $50 annually for its basic service, which includes unlimited transactions. All transactions are supported. TaxBit attempts to deliver “the most trusted platform that unites accounting and digital assets for tax purposes across corporations, consumers, and governments” via its cutting-edge technology.
TaxBit pricing:
- Basic cost $50 per year
- Prus cost $175 per year
- Pro cost $500 per year
More details in our full review of TaxBit
Accointing
Accointing is a crypto tax software that helps you calculate and file your crypto taxes. It offers a variety of features to make the process easy and straightforward, including support for multiple exchanges, automatic calculation of gains and losses, and more.
Accointing is available in both a free trial and paid versions, so you can choose the plan that fits your needs. And if you’re not sure how crypto taxes work, Accointing has a helpful blog that covers all the basics. So if you’re looking for a way to make filing your crypto taxes easier, Accointing is definitely worth checking out.
Accointing Pricing:
- Trader cost $199
- Hobbyist cost $79
- Free Tax cost $0
- Pro cost $299
Learn more about Accointing in our extended review.
ZenLedger
There are numerous techniques in ZenLedger crypto tax software that can help you save money on your tax return. This is their primary objective, and it is reflected in every element of their crypto tax software solution.
Keeping you from ever paying too much in taxes is ZenLedger’s goal. They make a special effort to incorporate as many automatic tax deductions and money-saving strategies as they can for this reason.
With this platform, you have access to features like: full tax preparation services, loss harvesting tools, contributions, mining, ICOs, and more. When filing your taxes, Zen wants to leave no detail untouched.
All final tax reports you receive at the end of the process are IRS-compliant and file taxes are ready to be added to your tax return right away.
Features
- Uses the history of your cryptocurrency transactions to quickly create a schedule.
- With the aid of your transaction history, it enables you to compute your cryptocurrency gains and losses.
- Integrating with TurboTax is simple.
- A tax expert is available to you with all of its strategies.
- Instruments for collecting tax losses.
Learn more about ZenLedger in our detailed Zenledger Review Post
What Features Should I Look for?
When searching for this type of software, your top focus should be locating a solution that takes the least amount of input from you in order to do your taxes, as the primary point of any kind of crypto tax advisors or software is to automate the process of paying your taxes. There are some unique features you might want to look for when it comes to crypto taxes specifically because various forms of crypto tax services and software tend to concentrate on their own niches.
Seamless Imports
The ability to seamlessly import your portfolio and trade history from all of your various wallets and exchange accounts is the most crucial feature of cryptocurrency tax software. When it comes to crypto taxes, this is actually 99% of the labor, therefore automating the procedure can save you hours of unnecessary work.
Before selecting your tax software, make sure that it is compatible with the platforms you use. For instance, different tax software may support different exchanges and wallets. For example, some software does not yet support various DeFi applications.
Tax Harvesting Capabilities
You might wish to consider tax loss harvesting as an essential aspect of bitcoin tax software in addition to exchange and wallet functionality. The goal of a tax loss harvesting tool, a common approach in the financial world, is to reduce the total amount of capital gains taxes you owe at the end of the year.
Notably, declaring losses on a certain cryptocurrency asset can also reduce your income tax responsibilities. Several software options have functionality that can assist you in determining whether you should attempt to cause a capital loss in order to reduce your income taxes due for a specific year.
Price Structure
Most (if not all) crypto tax software typically follows one of the following price structures:
- Free version (limited transactions)
- $50 (50-100 transactions)
- $100 (100-1000 transactions)
- $200+ (Unlimited transactions)
Therefore, the price you’ll pay is frequently influenced by how frequently you exchange cryptocurrencies. You can easily survive on the lowest tier if you just buy cryptocurrencies once or twice a year.
It’s crucial to remember that numerous cryptocurrency services, such as transfers, staking, mining, trading crypto, incentives, and more, count as transactions, so don’t be alarmed if your transactions are more than you anticipated.
The majority of tax preparation software has the advantage that you can use the majority of its features without paying a dime until you export the real documents you need to file your taxes. But to determine the price range that works best for you, it is worthwhile to do a little comparison shopping.
Customer Service
It’s quite helpful to have good customer service for tax software because filing taxes yourself might be complex.
Unfortunately, the greatest customer support is included in the more expensive plans, which is bad news for many tax software companies.
Many tax software packages may connect you with a real-life tax expert to help you resolve your concerns, but it can be very expensive (potentially thousands of dollars).
However, most of the time live chat or email assistance will do, since those are accessible at all tiers.
How is Cryptocurrency Taxed?
Crypto tax software is essential, primarily because the laws and policies governing the cryptocurrency business are still somewhat convoluted. There is a great deal of mystery about how all of the technology surrounding bitcoin and other crypto assets will be governed, even when you step beyond the scope of taxation.
Cryptocurrency is taxed in a variety of ways. The most common is through capital gains taxes, which are levied on the sale of cryptocurrency. When you sell cryptocurrency for more than you paid for it, you owe capital gains tax on the difference.
Cryptocurrency is also subject to income tax. If you earn cryptocurrency through mining or other means, you owe income tax on that cryptocurrency.
Finally, cryptocurrency may also be subject to GST/HST in some jurisdictions. This is typically levied on the purchase or sale of cryptocurrency, but can also apply to other situations such as when you use cryptocurrency to pay for goods or services.
As always, it’s important to consult with a tax professional to ensure that you’re paying the right amount of tax on your cryptocurrency holdings.
Although the U.S. government has published guidelines for cryptocurrency regulation, these guidelines are not entirely set in stone. President Biden issued an Executive Order on March 9, 2022, to look into the future of crypto world and government regulation of the industry.
The IRS Notice 2014-21, the most comprehensive current guidance on cryptocurrency taxation, defines cryptocurrency as a digital asset that is U.S. property and must be valued in U.S. dollars at the time of sale.
NFTs are viewed as digital assets like cryptocurrencies by the majority of tax preparers. NFTs, however, are not officially categorized as digital assets in IRS Notice 2014-21, and some recent guidance raises the possibility that these gains may instead be classified as collectibles subject to the 28% tax rate.
Crypto tax reports
Cryptocurrency tax reports can seem daunting at first, but they don’t have to be. With a little preparation and a clear understanding of the process, you can complete your crypto tax report with ease.
The first step is to gather all the necessary documentation. This includes any records of your cryptocurrency transactions, taxable income, as well as any relevant exchanges or wallets. Once you have all this information, you can begin to fill out your report.
There are a few key things to keep in mind when completing your crypto tax report. First, you will need to determine your cost basis – that is, how much you paid for each coin or token. You will also need to account for any gains or losses, and report these and pay tax due accordingly.
Finally, make sure to keep an accurate and up-to-date record of all your cryptocurrency transactions, as this will make filing your taxes much easier in the future.
When filing tax forms to generate tax reports during your crypto exchange transactions, always consider taxable events that will lead owe taxes due to crypto gains.
With a little effort and attention to detail, completing your cryptocurrency tax reporting can be a breeze. So don’t let it intimidate you – get started today and take care of it before the tax filing season comes around again.
Any of the tax software reviewed can help you calculate your capital gains and losses, as well as generate the necessary tax reports. While there are a few different options on the market, they all work in essentially the same way.
After connecting to your exchange account and importing your trade history, the software will calculate your capital gains and losses. It will then generate a report that can be filed with your taxes. In addition to helping you reduce your tax liability, the software can also help you keep track of your trades and monitor your investment portfolio.
FAQ:
What is Crypto Tax Software?
It is a computer tool that makes it simpler for you to manage the taxes related to activities in the cryptocurrency market.
Many times, this kind of software will also come with a full cryptocurrency portfolio tracker, allowing you to see an overview of all your cryptocurrency holdings across numerous exchanges and wallets in a single centralized interface.
Should I pay taxes on my cryptocurrency?
Yes, in most countries.
Many people have the notion that cryptocurrency is some sort of free card that allows you to just keep all of your crypto profits. Actually, investing in cryptocurrencies is more similar to owning stocks or real estate, where you must pay taxes on your earnings.
There are certain countries that do not tax cryptocurrency, but you should double-check before making that assumption.
What is the Best Crypto Tax Software?
The following are widely thought to be amongst the best tax software companies for cryptocurrency:
- Ledgible
- Koinly
- CoinLedger
- TaxBit
- Accointing
- Zenledger
- TokenTax
How do I file my crypto taxes?
Following are five easy procedures to file your cryptocurrency tax:
- Determine the cryptocurrency’s market value on the day it was purchased or traded.
- Select the appropriate taxable event.
- Calculating the tax base.
- Make a loss provision for Bitcoin.
- Reporting cryptocurrency income and capital gains.
Final Thoughts
To determine exactly how much you must pay the IRS or your jurisdiction equivalent, search for the finest cryptocurrency tax calculator software. Whether you’re in the USA, UK, Australia, Germany, or anywhere else in the world, the crypto tax calculator software discussed in the review surely makes your tax processing much easier.
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