Way back in the day, using custom-made spreadsheets to track your transactions, calculating gains and losses, and then calculating your taxes might have been the most efficient way to report your crypto taxes, but that’s definitely no longer the case.
In 2021, the most efficient way to track your transactions and calculate taxes is –
Crypto tax software
There are a large number of crypto tax software out there – some are great, while others leave a LOT to be desired. In this article, we will take a look at some of the best crypto tax software, their features, and their pros and cons.
The 5 Best Crypto Tax Software at a glance:
Before we get into the specifics for each of them, let’s quickly go over what they are and why we need one.
What is a Crypto Tax Software & Why Do You Need One?
There are several different crypto tax software out there, and they all share one primary function:
They automate the process of managing and calculating your capital gains and losses acquired from buying and selling cryptocurrency in order to file taxes.
Most of these platforms offer multiple subscription options, including free and paid ones.
Usually, the free version is ideal for crypto users who are not actively buying or selling crypto. In other words, for someone with less than 15-20 transactions every year, the free version should be enough.
But for most crypto traders, the paid versions will prove to be much more valuable. The paid versions on most of these platforms can range in price significantly, depending on your needs and level of trading. Our top entry, Bitcoin.Tax, has the most affordable plans for casual traders AND professional traders alike.
Keep in mind that this is a very basic explanation of what a crypto tax software is and what it does. There are many more features and functions these platforms provide that we’ll find out about when we get to the specifics of each of them.
Why Do You Need a Crypto Tax Software?
For a passive crypto trader with very few crypto-related transactions every year, the idea of paying for these services might not appeal to you, and understandably so.
However, for a regular crypto trader with hundreds or thousands of transactions every year, things are different.
Well, firstly, the laws regarding crypto taxation in most countries don’t have much clarity. In some cases, they are conflicting and confusing.
For instance, in the US, the SEC considers crypto as a commodity, but according to the IRS guidelines, crypto is treated as property or an asset, which means every time someone disposes of their Bitcoin or other cryptocurrencies, the IRS will view it as disposing of an asset, and therefore it will be a taxable event.
The problem with that is even if someone buys a burger at a restaurant using Bitcoin, it will still be considered as disposing of an asset, which can make the entire situation extremely complex with respect to taxes.
On top of that, the IRS has warned crypto holders multiple times now to report their taxes or be ready to face the implications.
All this puts crypto holders in a tough spot where now, they have to keep track of even the smallest of transactions that occurred on every exchange and wallet they are using in order to file their taxes.
The Solution: Crypto tax software
This is where these platforms come in. Either spend hours and hours collecting, categorizing transactions, manually calculating the gains and losses, and finding the right forms to file the tax report. Or use any one of these crypto tax software to save yourself time and a massive headache. Also, it’s highly unlikely that these software will make the same mistakes that you’re vulnerable to make while calculating your taxes.
Now that we know what crypto tax software is, what it does, and why we need one. Let’s get into the specifics of each different software and find out what separates them from others and makes them the best.
When looking for an ideal crypto tax software, there are three major factors you should consider – Pricing, how long it has been around, and the number of trades it can handle.
Launched in 2013, Bitcoin.Tax is one of the earliest and most trusted crypto tax software in the market, with a very loyal user base.
Bitcoin.Tax has a free membership option and a wide range of paid membership options, offering some of the most affordable prices out there, starting from $39.95.
The number of transactions Bitcoin.Tax allows in relation to its prices is incomparable to its competition. Even the most standard Bitcoin.Tax membership of 39.95 per tax year allows up to 1000 trading transactions, while most other platforms only allow up to 100 transactions at the $40-$50 price range.
It also offers API integration with all the major exchanges and wallets, which means you can import trading histories directly from your exchange accounts – or if you prefer, you can export your exchange data in a CSV format and import them into Bitcoin.Tax. They support almost all major exchanges you can think of, including Binance, Coinbase, Gemini, Exodus, Kraken, Bitstamp, KuCoin, Crypto.com, and many more. Bitcoin.Tax consistently updates their exchange compatibility and listens to user requests. Bitcoin.tax also supports calculating capital gains on NFTs and DeFi trading as well.
As far as safety and security are concerned, Bitcoin.Tax doesn’t possess any power over your withdrawal right on these exchanges. Linking your exchange data is done via a read-only API, which allows the software only to track your transaction activity, without having any actual access to the crypto.
Bitcoin.Tax can prepare the following tax reports for you –
The primary report is the capital gains report – this can be exported in a number of formats, including tax software friendly versions and accountant friendly versions. Income reports if you’re a miner or earn with crypto, donation reports for gifts and tips, a margin report for margin trading (Kraken only), and a closing report that illustrates year end holdings, and shows long and short term unrealized gains – an integral report for tax planning purposes.
After preparing your tax reports, you can either directly import this info into tax software, such as TurboTax and TaxACT, or attach it as a statement to your tax return or even print it as a PDF.
Other than that, Bitcoin.Tax provides email support for all membership options, so if you can reach out to them regarding anything, anytime you want. Bitcoin.Tax has a support staff that is willing to take the time to work with it’s users and help them properly calculate their crypto capital gains. Support is available via Twitter, Facebook, and Reddit as well! The support team is often praised by users. A mobile application is also in the development stage, and will be released in the near future.
Bitcoin.Tax also offers crypto tax professional support via it’s full-service option, as well as white glove data processing for users who need a little bit of extra one on one time with a Bitcoin.Tax support agent.
Bottom line: Bitcoin.Tax checks all the boxes. It’s affordable, efficient, and trustworthy – everything you need in the best crypto software.
Launched in 2013, Cointracking.info was initially only a portfolio managing tool but later added several features to calculate taxes.
Just like most other platforms, Cointracking.info also offers free membership and multiple paid membership options, starting with $10.99 per month billed yearly.
The free version allows users to add up to 200 transactions, which is a lot considering it’s free and allows up to 3500 transactions on its lowest-priced membership of $10.99 per month. Of course, as the membership price goes up, the limit on the number of transactions is increased, with the most expensive membership allowing unlimited transactions at $54.99 per month.
Similar to Bitcoin.Tax, Cointracking.info also provides CSV and API integration for many major exchanges and wallets, including Binance, Kraken, BitMax, KuKoin, and many more. It also offers the same security and safety measures as Bitcoin.Tax, meaning Cointracking.info has only the permission to read and track your transaction activities, nothing more than that.
The software offers a number of different report exports with multiple different parameters, which can initially seem overwhelming to new users.
There are a number of ways and methods through which you can reach out to Cointracking.info and its customer service, and it currently has a mobile application for those who like to operate from their phones.
Launched in 2018, Koinly is relatively new in the industry compared to its peers but has an impressive set of membership plans with various features.
Unlike any other crypto tax software, Koinly offers a free membership option that allows users to track up to 10,000 transactions per tax year.
However, its most basic membership plan, called “Newbie,” priced at $49, only allows up to 100 transactions. While the most advanced membership, “Trader,” with two variants priced at $179 and $279, allowing up to 3000 and 10,000 transactions, respectively. Compare this to Bitcoin.Tax, which allows up to 1,000 transactions for $39.95 and 10,000 transactions for $59.95.
Like most platforms, You can import transactions by uploading a CSV file or through API integration, including DeFi platforms.
As for safety and security, Koinly never gets any access to any of your sensitive information like any other crypto tax software on this list.
Koinly, like the other options on this list, will prepare various reports and allows users to export their tax reports in a format that can then be imported to TurboTax.
Customer supports include a FAQ page, along with Email support and live chat support. Koinly does have an Android application, but the majority of users complain that it’s very unstable, making it “unusable”.
Launched in 2017, CoinTracker is also a relatively new crypto tax software. Although it’s not as good as its peers, it’s still good to be aware of what it is and what it’s offering.
CoinTracker’s free membership plan offers up to 25 transactions per year. Other than that, it has three other membership plans ranging from Hobbyist, at $59 per tax year, allowing up to 100 transactions, Premium at $199, allowing up to 1000 transactions, and a custom plan priced individually, allowing unlimited transactions.
Similar to all platforms on this list, CoinTracker also supports CSV imports and API integration, along with the same security and safety measures. It supports many wallets and exchanges, including Binance, Coinbase, Kraken, Ledger, Exodus, etc.
CoinTracker doesn’t provide all tax preparation services, but only major ones like capital gains reports and margin trading reports.
As for customer support, CoinTracker has faced criticism for slow response times and lackluster customer support, but the company seems to be aware and working to resolve this.
The Washington-based crypto tax software, Zenledger, was founded in the same year as CoinTracker, 2017.
Zenledger’s membership plans are very similar to CoinTracker in many ways.
The free membership of Zenledger only allows 25 transactions per tax year. Next in line is the starter pack, which costs $49 and allows up to 100 transactions. Then we have the premium and executive plans. While the premium plan has an increased transaction limit of 5000, the executive plan has no limit. You can import unlimited transactions on the executive plan.
Zenledger supports a large number of exchanges via API, including Binance, Coinbase, Gemini, Liqui, HitBTC, and many more. The security measures are the same as other platforms.
All users on Zenledger, including the ones on the free plan, can download all tax documents and import their crypto tax reports on TurboTax. However, only the premium and executive users get access to DeFi, staking, and margin trading support.
Zenledger’s support has been praised by many of its users.
As of now, Zenledger doesn’t have any application for iOS or Android.
The Best Crypto Tax Software Is…
Bitcoin.Tax is number one in our books, although we may be a bit biased…but hear us out:
Bitcoin.Tax has the longest history in the industry out of the software on this list, the lowest and most affordable pricing plans, a support and development team that truly cares about making all customers happy, support for most exchanges and wallets, DeFi and NFT support, and a whole lot more. You can create a free account with Bitcoin.tax here and import your trading data and test all of the features for free, including capital gains reports.