A good crypto tax software should import transactional data from exchanges, wallets and blockchains in order to calculate gains and losses and create a tax report. Furthermore, such software should support non-fungible tokens (NFT) as well as decentralized finance (DeFi).
Some crypto tax software packages are free while others charge an annual fee. The best options support multiple exchanges and wallets while providing comprehensive transaction tracking and reporting features as well as offering useful insights tools.
Accurate transaction tracking and reporting
Crypto tax software varies in terms of transaction tracking and reporting accuracy, depending on which platform users choose. Some platforms, like Koinly, enable users to import transactions from various blockchains and exchanges as well as pre-filled paperwork for various countries. Furthermore, Koinly provides various tax calculation methods as well as tax loss harvesting to help users save money.
Use of crypto tax software is an easy and efficient way to keep track of your cryptocurrency activities. These tools will import all transactions from wallets, exchanges and blockchains and generate an aggregated report – as well as making filing your taxes effortless!
Some programs provide automatic tax calculations to help you avoid penalties for inaccurate or late filings, calculate short and long-term gains from mining, staking and trading operations and even identify suspicious transactions and report them directly to the IRS for investigation. Furthermore, export your reports for further review with ease.
Compatibility with various cryptocurrency exchanges and wallets
Use of cryptocurrency comes with tax responsibilities. From buying and selling coins, to mining activities like bitcoin mining, reporting your earnings is your duty as an investor. Crypto tax software makes tracking gains and losses easy; automatically synchronizing across exchanges and wallets for seamless progress reporting and giving final tax reports ready for filing purposes.
Most providers operate under a paid subscription model, with prices depending on the number of transactions and features needed. Koinly provides an exchange-wallet matching feature so as to prevent overpaying taxes; furthermore it supports various cost accounting methods and allows tax loss harvesting.
ZenLedger offers country-specific pre-filled tax forms and support for FIFO, LIFO or HiFO accounting methods, among other features. Additionally, its free plan offers three exchange and wallet integrations as well as a basic tax report covering 25 transactions; however its free tier does not support DeFi integration.
Costs
Crypto tax software can be an indispensable asset when it comes to calculating cryptocurrency taxes. Not only will it keep records of your transactions and generate an IRS form 8949 automatically for you, but some programs even provide customer service support!
The ideal crypto tax software should enable you to track gains and losses for all types of assets, including non-fungible tokens (NFTs), decentralized finance applications (DeFi), staked tokens and staked assets such as staked tokens. Furthermore, this tool should allow you to import wallet and exchange accounts and feature smart transfer matching and tax loss harvesting as well as automatic transaction importing with country specific tax reports.
Accointing and CoinTracker offer automated crypto tax filing systems. Their country-specific tax reports cover US, Switzerland, Australia, Germany and Austria and self-service integration with various blockchains and wallets are also provided. Finally, these platforms can also offer valuable analytics and insights.
Support
The best crypto tax software will automatically sync across various exchanges and wallets, calculate capital gains and losses, and produce a comprehensive report that can be used to file taxes. They also help with data reconciliation as well as offering features like tax-loss harvesting. Some tools offer this feature free while others may charge an annual fee.
These apps are specifically tailored to adhere to US tax guidelines and offer support from professional accountants, with capabilities including recording transactions in spreadsheet format to ensure there are no mistakes or oversights, providing user-friendly user experiences 24/7.
Accointing is an ideal option for users who wish to save time and avoid the stress associated with end of year tax filings. With its user-friendly interface, Accointing makes importing portfolio and trade history from multiple cryptocurrency platforms simple. Plus it provides customer support as well as features such as tax loss hunting.
