More and more people are learning about the crypto world as the days go by, and who wouldn’t get hooked?
Buying and selling cryptocurrency can make you a millionaire in a very short amount of time.
While trading crypto can be time-consuming and challenging, calculating its tax is a different kind of monster. If you are a daily trader, it is not uncommon to have a gazillion transactions every year.
Keeping track of these trades and then computing the profit is very difficult, even for the best of us. That is exactly why many crypto tax software is made. They do not necessarily file your taxes for you.
However, they can automate your data, and you can generate ready-made crypto tax reports that you can use in filing your taxes.
Take advantage of these benefits by learning more about how they work, the best cryptocurrency tax software options available for you, and more.
Best Crypto Tax Software Reviews
Here’s a quick summary of the 10 crypto tax software we’ll discuss below:
|Crypto Tax Software||Tax Software Compatibility||Number of Exchanges Supported|
|Koinly||TurboTax, TaxAct, H&R||300+|
|Cointracking||TaxACT, TurboTax, Drake and the German WISO Software||500+|
|BitcoinTaxes||TurboTax, TaxAct, H&R||21|
Accointing is your crypto tax software if you’re an advanced crypto trader. It can track your crypto across all wallets and exchanges.
The software also provides tools that you can use to make a neat portfolio analysis and final tax reports for easy filing. It also shows you tax-loss harvesting options, has an easy-to-navigate user interface, will calculate losses and gains, and offers tax-loss harvesting and portfolio tracking.
- Supports desktop and mobile
- Accommodates 300+ different wallets and exchanges
- Supports 7500+ currencies
- Pro plans get the most priority
Unlike other tax software, Koinly does not only focus on the US alone but is also available in other 20+ countries such as countries in Europe, Australia, New Zealand, and some in Asia like Japan and South Korea.
It helps you track your cryptocurrency transactions and has a data import feature that allows you to sync all your data, wallet, and exchanges and saves you from going back and forth to all your different accounts.
It integrates 70+ wallets, 300+ exchanges, and 14 blockchain addresses. Likewise, it allows you to export data to similar tax software like TaxAct and TurboTax.
Lastly, it displays real-time tax liabilities and profit and loss details.
- Accommodates many wallets and exchanges
- Supports tax filing internationally
- Tax-loss harvesting is not supported
- Free plans do not include final tax reports
ZenLedger is a crypto tax software best for advanced users and businesses. It integrates 30 DeFi Protocols and 400+ exchanges.
The software uses your transaction history to calculate your profits and losses and allows integration with TurboTax. It also provides access to all tax pro’s plans.
Lastly, it offers tax-loss harvesting and combined accounting reports.
- Fees are based on the number of made transactions
- Provides support to decentralized applications
- Offers tax professionals support
- Costs more compared to competitors
- Only supports the United States
TokenTax is a crypto tax software commonly used by businesses and advanced users.
This software specializes in calculating complex taxes for your cryptocurrency exchanges. This feature is fully automated and requires very little effort, making it extremely easy to handle.
You’ll also love that it:
- Supports all crypto exchanges
- Provides audit assistance
- Offers tax-loss harvesting tools
- Automatically integrates data with other crypto exchanges
- Offers services from a cryptocurrency accountant
- Computes and files taxes
- Supports international tax filing
- Available in 80+ crypto exchanges
- Offers an easy-to-use tax-loss harvesting tool
- Does not offer a free trial
- The cheapest plan has limited features
Cointracking is another cryptocurrency tax software that is popular among traders and investors, with 900,000+ active users. It offers market trends analysis for 12,000+ coins and imports your transactions using automated features.
This software also provides profit and loss reports, supports data import from 100+ exchanges, allows tax report export to tax offices, and provides final tax reporting for crypto companies and traders.
Using it is easy because it offers video tutorials and FAQs.
- Free version available for up to 200 transactions
- Supports 5000+ coins in different exchanges
- Compatible with both iOS and Android
- Supports API-based trading
- Free version only supports two wallets
- Does not support ICOs
TaxBit is a crypto tax software best for beginners. It was created by tax attorneys and CPAs for customers who want to have their tax reports filed.
This software provides technology that can sync data from different platforms and produce tax reports automatically. Even better, it supports 2000+ currencies in 150 crypto exchanges.
Do you need software that allows transaction report exportation? Then this is the right choice.
It also presents an informative user interface that shows your asset balances, tax position, and unrealized profits and losses. Plus, it features tax-loss harvesting and portfolio analysis tools.
- User-friendly tax software
- Very responsive customer service
- Issues 1099s for crypto exchanges
- Auto-sync reporting is limited
- CSV files needs manual formatting
Bear.Tax is another crypto tax software made for beginners. It can import your transactions automatically, compute taxes, and generate tax reports.
It also allows trade import from any cryptocurrency exchange that you use. What you’ll most about it is that it can automatically process tax documents and forward them to your tax software or your CPA.
Lastly, it provides different kinds of reports, such as an audit trail and a sales report.
- Affordable pricing
- Supports conventional tax software
- Offers many automation features
- Supports only 50+ exchanges
- Tax reporting is unavailable for some countries
BitcoinTaxes is a crypto tax software that offers different plans to cope with varying user needs. It is best for individuals or businesses with comprehensive tax filings.
Not only will it compute your gains and losses, but it also offers tax preparation, filing services, and tax-loss harvesting features.
- Software is compatible with CSV files
- Can generate reports in TurboTax and TaxAct format
- Free version offers only 100 transactions
- Non-premium accounts have limited features
CoinTracker is a crypto tax software trusted by 500,000+ users. It features automatic tracking of your portfolio and tax-loss harvesting. It is one of the best tax software for mobile users.
It will automatically compute gains and losses and can sync data from different cryptocurrency exchanges. It also allows tax report export to TaxAct or TurboTax, offers consultation with a personal CPA, and supports 2500+ cryptocurrencies.
- Compatible with both iOS and Android
- Offers 12 different tax report generating methods
- Supports 7000+ cryptocurrencies
- Free plan only offers a maximum of 25 transactions
This crypto tax software is the most recommended for tax-loss harvesting. It has 100,000+ users, supports 10,000+ cryptocurrencies, and allows data import from various crypto platforms.
The best feature? You can download tax forms and send them to your CPA or tax software. Plus, it supports multiple currencies and offers tax-loss harvesting tools.
You’ll also be given different sources of information to teach you more about the cryptoworld and provided with total audit support.
- Integrates TurboTax
- Many opportunities for tax-loss harvesting
- Offers multiple tiers of subscription
- Customer service for lower tiers is limited
- Tax returns cannot be filed directly
Is Crypto Taxable?
Yes, all cryptocurrencies are taxable, such as Bitcoin, Ethereum, Tether, and XRP. Based on the rulings of the IRS, they are considered property and are subject to taxes like stocks, bonds, and gold.
Crypto taxation started when the Internal Revenue Service (IRS) published the Revenue Ruling 2014-21 in March 2014. It simply outlines tax principles applicable to cryptocurrency.
It explained that even though cryptocurrency may work like any other currency, it does not have legal tender. Therefore, it should be treated as property like stocks or bonds.
Furthermore, those businesses trading cryptocurrency must report the generated gain or loss for tax purposes. However, this ruling has left many gray areas.
Five years later, the IRS released an updated version with much clarity on cryptocurrencies’ transactions. It also addressed the questions raised in some areas of tax law and amended the Frequently Asked Questions (FAQs).
How Does Crypto Tax Software Work?
The software’s main function is to make the user’s life easier. They do so by reducing manual tracking of activity, accurately monitoring crypto movement, and, most importantly, saving time, money, and headache in the process of filing taxes.
Crypto tax software helps the user ensure that he or she pays the right amount of taxes on cryptocurrency and avoids IRS penalties.
Crypto tax software works by consolidating all your data from your cryptocurrency exchanges and keeping track of your sold bases and other NFT accounts. The key feature of crypto tax software is it calculates your taxes for you, and you’ll be able to generate reports needed for filing your taxes.
What Are the Most Common Types of Tax Software?
There are three major types of tax software. Learn all about them on the list below:
Form-based tax software copies the layout of a tax document and relies on a customer filling in correct data in accordance with your tax document.
This type of tax software is the most common. Customers input data through a question-and-answer form. The data input will most often automatically populate the places needed to be filled.
Commonly known as e-filing software, it’s more accurate and secure. That’s why the IRS prefers it compared to the others.
E-filing software also allows the direct transfer of tax data from your drive to the IRS. This transfer of data reflects in real-time.
For tax refunds, e-filing software also has the edge as it can deposit the refunds faster into your account, only taking three weeks compared to the normal four to eight weeks.
E-filing can be accessed through the IRS by accomplishing the required forms. You can fill in the data by downloading the form, filling it out, and submitting it directly or filling out the form online.
E-filing software is also most probably current. It updates the documents directly from the IRS.
Key Factors to Consider Choosing the Best Crypto Tax Software:
To choose the ideal tax software for yourself, there are some things you need to consider. Below is a list of the key factors to look at to determine the perfect crypto tax software.
Platforms are very useful; hence, signing up for a paid plan is reasonable. Of course, it is always better if the crypto tax software offers a free trial for you to get a feel of the software.
You’ll be able to gauge its capabilities and features before paying the premium. The more features you need, the more premium you’ll have to pay.
The most important factor to consider is the available integration of the crypto tax software. Since every activity must be accounted for, a good crypto tax software must be able to integrate all exchanges and allow seamless data syncing from different wallets and accounts.
Integration can be a form of Comma Separated Values (CSV) import and Application Programming Interface (API) import.
For small or big time crypto traders, one must look for a crypto tax software that has enough capacity for data transfer. It should also be able to cater to lots of transactions from multiple accounts, wallets, and exchanges.
Features and Abilities
First of all, crypto tax software must be easy to use. Having a dashboard that shows all your exchanges, wallets, and accounts in one page or click is a bonus.
Definitely, you should look for a feature that would particularly fit your needs. Some essential functions you must look for are:
- How data are being compiled and organized
- Gain and loss computation
- Accurate tax computation
A good crypto tax software must have good customer service to accommodate new users.
Who wouldn’t want other perks, right? Sometimes, one unique feature or a discount plan may be the deciding factor when choosing the right tax software for you. Make sure to explore more of their offers.
How Is Cryptocurrency Taxed In Different Countries?
Different countries tax crypto based on their own tax standards. You can see below how three major players tax cryptocurrencies.
The United States
All things cryptocurrency-related attract taxes, such as gains, staking, lending, mining, selling, and buying cryptocurrency. Other miscellaneous taxes apply to corporates, crypto companies, and funds.
When you buy cryptocurrency using US dollars, the US government does not require you to file any returns. However, when you trade cryptocurrency, you are required to file returns.
Businesses, corporations, and trusts can claim deductibles and deduct operating expenses, while hobbyists cannot do these things. There are a lot of taxes, including capital gains tax, income tax, sales tax, minimum tax, and added Medicare tax.
Net investment income tax is also part of the taxes you need to settle. Tax returns on income should be filed every tax year before April 15 of the year.
Anyone who earns at least USD 6,750.00 is required to file this. Income can come in various forms, such as wages, salaries, pensions, tips, and fees from services.
Other types of income include rent, business income, property gain, interest, sales, dividends, and proceeds. You are not required to pay any tax if you did not meet the threshold.
The United Kingdom
When you buy, sell, receive cryptocurrency as payment, lend, stake, or mine cryptocurrency, it will be subject to tax whether you receive capital gain or income. Other taxes can be applied to employees or crypto companies.
Tax returns should be filed every tax year before October 30 for paper tax returns.
For online tax returns, you should file them before January 31. The tax year starts on April 6 of the current year and ends on April 5 the following year. On the other hand, you can file returns offline through post or online. You need to get a unique tax reference number to file for taxation.
In cases of delayed filing, you may be subjected to a penalty of at least EUR 100.00 and an additional EUR 10.00 every time filing is delayed.
Basic taxes include property tax, income tax, capital gains, value added tax, and inheritance tax. Local government units also charge fees and council tax.
Capital gains tax for cryptocurrency is 10% when you earn EUR 50,278 and less and 20% if you earn EUR 50,279 and above. The good thing, though, is that the UK Government does not tax dividends, savings interest, first EUR 1,000.00 from self-employment, and the first EUR 1,000.00 from property rental.
To pay taxes, the government will require a national insurance number. For non-residents, they only pay income tax. This includes corporate tax and short-term business tax. The corporate tax percentage is 19%.
CRA or the Canadian Revenue Agency is the authorized taxation body in Canada. You should file tax returns of capital gains and crypto income every year before April 30.
There are also taxable individual events such as using crypto to pay for goods and services, selling crypto, trading crypto on decentralized and centralized exchanges and converting crypto into fiat.
The CRA also considers gifting cryptocurrency as a taxable event. For businesses, taxable events include service and product promotion, buying and selling, inventory acquisitions, and business plans. Staking, mining, and receiving crypto as payment are also taxable activities.
Find the Right Crypto Tax Software For You!
Cryptocurrencies offer a lot of opportunities in terms of gaining profit. We know a lot of people who have found success investing in cryptocurrency.
Similar to other investments, you need patience and understanding of the market to succeed in this field. And like other investments, you need to pay taxes for your earnings, be it capital gains or income.
Calculating tax, profits, and losses is difficult to do by yourself. That is why you need to invest in reliable tax software.
There is a wide variety of software in the market, and they all serve the same purpose: to make your life easier by calculating your taxes, profits, and losses.
There is other advanced software that automatically submits your tax report to the correct authority. Choosing the right tax software for you can be confusing, but we know that you can identify your needs and choose your crypto tax software wisely after reading this.
Frequently Asked Questions
1. Is investing in cryptocurrency profitable?
Yes, the cryptocurrency market is one of the most volatile markets available. This volatility presents a lot of opportunities to gain profit.
Similar to all things, you need to do a lot of study and research before diving into investing in cryptocurrency. While the chances of gaining a profit are extremely high, the chances of incurring losses are also extreme.
2. Has anyone become rich from crypto?
Yes, a lot of people became rich because of crypto. For instance, if you had put at least USD 500 in Bitcoin in 2010, your money’s value would be hundreds of millions today.
3. Is cryptocurrency a property or currency?
This is one of the most asked questions regarding cryptocurrency. Admittedly, it is quite confusing, but the answer is that cryptocurrency is a property.
For tax purposes, it will be treated as a property rather than as a currency.
4. Is there a need to report every crypto exchange or sale transaction?
Yes, you should report all sales and exchange transactions for tax return purposes.
5. Are there tax audits for cryptocurrency?
Yes, in fact, crypto tax audits are becoming prevalent. The IRS made tax enforcement on cryptocurrency transactions a key priority in recent years.
Taxpayers with taxable cryptocurrency activities should be compliant.
6. How can you monitor the activities of your cryptocurrency trading?
Admittedly, transactions involving cryptocurrency can be a lot, from buying, selling, or transferring accounts.
Keeping track of every activity can be very tedious. Luckily, there is a lot of crypto tax software that you can take advantage of to monitor all your crypto transactions easily.
7. What is the best crypto tax software?
Koinly, TaxBit, Accointing, TokenTax, Bear.Tax, and ZenLedger are some of the most trusted crypto tax software. These software options can give you detailed reports of your profits and losses and sync thousands of data from different crypto exchanges.