Navigating through this challenging terrain requires the aid of robust crypto tax software. This article presents a comprehensive review of some of the best crypto tax software in the market today.
Understanding the Need for Crypto Tax Software
Before delving into the review, it’s crucial to understand why crypto tax software is essential. Unlike typical stock trading where brokers are required to provide comprehensive tax forms, crypto exchanges are not obligated to do the same. Therefore, the responsibility of tracking profits, losses, and calculating taxes lies with the investor or trader.
Crypto tax software helps in automating this process. These tools collect data from your crypto exchange accounts, analyze your transactions, and provide a summary of your capital gains or losses. They generate necessary tax forms, like the IRS Form 8949, which is used to report sales of capital assets.
In addition to basic tax reporting, advanced crypto tax software also offer a range of other useful features like tax-loss harvesting, which can be a real tax saver in case you’ve sold investments at a loss.
Top Crypto Tax Software to Consider
Let’s dive deep into exploring some of the top crypto tax software that can help simplify your crypto tax filing process.
CoinLedger: A User-Friendly and Comprehensive Solution
CoinLedger, previously known as CryptoTrader.Tax, is a widely-used crypto tax and portfolio tracking tool. It’s designed to be user-friendly, catering to both beginners and seasoned investors.
Its pricing primarily depends on the number of transactions you need to track. The full-service plans range from $49 for up to 100 trades to $199 for users with more than 3,000 trades. Every paid plan offers tax forms, support for DeFi income, and live chat support. CoinLedger boasts compatibility with over 500 exchanges, wallets, and other crypto services.
However, if you wish to download your tax forms, you’ll need to opt for a paid plan starting at $49. For users exploring the tool, CoinLedger offers a free trial without form downloads.
- DeFi, NFT, and exchange support: Supports transactions from prominent exchanges like Coinbase, Gemini, and Kraken, as well as blockchains like Ethereum, Avalanche, and Solana.
- Tax-loss harvesting: Helps identify potential tax-saving opportunities in your portfolio.
- Customer support: Provides email and live chat support to all customers.
- Data Reconciliation: Simplifies the reconciliation process by auto-matching on-chain transactions and offering custom reconciliation features.
- Does not accept cryptocurrency as payment.
Koinly: Simplified Crypto Tax Reporting
Koinly is a reputable crypto tracking and tax reporting platform available in more than 20 countries. It offers a free trial for up to 10,000 transactions. However, you’ll need to pay a minimum of $49 to download various types of reports.
Koinly is known for its simple user interface. It allows users to import DeFi, NFT, and margin trading transactions. Moreover, Koinly supports automated imports from hundreds of exchanges and blockchains.
- DeFi, NFT, and margin trading: Seamless import of transactions from these categories.
- International support: Supports tax reports for multiple countries.
- API and blockchain imports: Supports automatic imports from hundreds of exchanges and blockchains.
- Limited Help Center: Compared to its competitors, Koinly’s Help Center lacks comprehensive resources.
- Transaction limit: Koinly has a transaction limit of 100,000 transactions per year.
TaxBit: Designed by Tax Professionals
TaxBit is unique as it is designed by certified public accountants (CPAs) and tax attorneys. It provides an easy-to-use platform to track your crypto investments, generate tax reports, and assist in filing your tax return.
One of TaxBit’s standout features is its free tax compliance tools, which lets users download tax and income reports and view their cryptocurrency transactions within the platform at no additional cost.
- Designed by certified public accountants (CPAs) and enrolled agents.
- Easy-to-use platform.
- Completely free crypto tax online software for individual users.
- Less transparent than competitors, with limited information about the program available on the company’s website.
TokenTax: A Full-Service Accounting Firm
TokenTax doubles as a crypto tax software and a full-service accounting firm. It offers hands-off tax reporting where a TokenTax accounting expert will handle your taxes from start to finish. However, this service comes at a price of $4,499.
- Hands off tax reporting: A TokenTax expert handles your taxes from start to finish.
- Support: Offers customer support at every pricing tier.
- DeFi and NFTs: Support for DeFi and NFTs is available for users in its Premium pricing plan.
- Affordability: TokenTax is more expensive than other crypto tax platforms.
CoinTracker: Comprehensive Crypto Tax Solution
CoinTracker is a popular crypto tax reporting and portfolio tracking platform. It supports more than 10,000 cryptocurrencies, allowing you to keep track of your gains, losses, and income throughout the year.
- Portfolio tracker: Allows you to monitor your investment performance throughout the year.
- Forum support: Although CoinTracker doesn’t offer chat support, it has a forum where customers can ask questions about the product.
- Tax-loss harvesting: Shows users all of their tax-loss harvesting opportunities.
- Limited customer support: Offers email support only for customers who pay for their Hobbyist and Premium plans.
- Affordability: Pricing scales based on the number of transactions, making it more expensive for customers with a large number of transactions.
ZenLedger: Advanced Crypto Tax Software
ZenLedger offers a free version for occasional traders looking to process 25 or fewer transactions. The paid plans, starting at $149, provide support for NFTs, DeFi, and staking. ZenLedger offers premium support, including chat and phone, in all of its plans.
- DeFi, staking, and NFT support: Offers support for these types of transactions for users in their top three pricing plans.
- TurboTax support: Allows users to import their crypto tax reports into TurboTax.
- Tax-loss harvesting: Provides users with a tax-loss harvesting report.
- Paid support: If you require two hours or more of customer support, users will need to pay for ZenLedger’s Premium Plan — which costs $999.
- Difficult to use: Users have criticized ZenLedger for having a difficult and complicated user experience.
The Bottom Line
Choosing the best crypto tax software depends on your unique needs and circumstances. Consider factors like the number of transactions you need to track, the types of crypto income you have, your budget, and the level of customer support you require.
The crypto tax software highlighted in this article are all reputable platforms that offer a range of features to assist users in the complex task of crypto tax filing. Remember to do your own research and choose a platform that best suits your needs.
Crypto tax software is not a substitute for professional tax advice. It is always recommended to consult with a tax professional, especially for high-value transactions or complex tax situations.