Whether you’re new to crypto or if you have been in the space for a while, you’ll need to pay taxes.
If you are not sure, read our guide where we answer common cryptocurrency tax questions.
Normally a traders goes through 3 stages when trading cryptocurrencies.
Life of a Crypto Trader
you’re on your way to becoming a millionaire...or at least that’s what you think
you realized that this might be more difficult than you thought and you joined telegram groups, followed twitter influencers and start trading
Oh $CRAP! What do you mean that crypto pays taxes? Yup. Compiling all those transactions will take you some time depending on how active you were. Hence, you’ll need a tax tool.
What’s the best crypto tax tool for my money?
Crypto tax tool for beginners and traders
If you’re new into the crypto space and you don’t want to be leveraging in 3-5 different tools to manage your crypto portfolio, choose Accointing.
It focuses on the user. It provides educational content. And it has a crypto tracker app as well as a crypto tax tool that delivers specific outputs per country for the US, UK, Germany, Austria, Switzerland, or any other country that uses FIFO or LIFO as a tax method.
It offers great customer support, and it’s one of the most affordable platforms out there.
Crypto tax tool for CPAs and Startups
If you’re looking for a more complex platform with more statistics of the general cryptocurrency landscape, I would recommend Cointracking.
It has a robust infrastructure in terms of data although it might not be for your novice trader. They also offer a directory of crypto CPAs around the world, but don’t have any official partnerships with any of them.
Crypto tax tool with professional CPA support
If you’re just looking for a platform to get your taxes done with the help of professionals, but with a considerably steeper price as the competitors, we recommend TokenTax.
It’s mainly focused on English speaking countries so you won’t have any trouble if you come from the US, Canada, or Australia. They handle several tax methods and you can acquire a tax package that includes a CPA...for a price.
Comparing Different Crypto Tax Software
Here is a comparison of different crypto tax software evaluated based on different variables.
The variables are broken down into subcategories in order to provide a more unbiased approach. Each subcategory was individually tested on each platform using the best of our knowledge.
Data Import Features
We have used multiple data import features as a variable. Following are these variables.
Historical Data Import
All data from all different data sources consolidated into one single source of truth for transactions, properly aligned to provide a structured output
Automated Exchanges Import
feature to automate that importing via API or Oauth, leveraging on Exchanges and Wallets connections to accelerate the connection between the exchange and a third party
Automated Wallet Connection
Feature to automate the wallet connection via Xpub or leveraging on an API connection to make the connection to a third party faster
feature to export all transactions inside of the platform to manipulate them accordingly via CSV or Excel
Feature to import ICO/OTC transactions properly into the crypto tax tool
Guided Data Import
Step by step guide on how to import your transactions including video tutorials and different importing format (API, CSV, Direct Connect, etc)
Feature to handle several accounts via one account (CPA approach)
Ease of Changing Imported Data
Ability to easily edit, delete, rearrange data from wallets, exchanges or imported files in less than 2-3 clicks
Ability to easily input manual transactions into the platform by providing the proper fields and flexibility to adapt to the different tokens conditions
Option to Edit Data
Feature to edit individual transactions
A variety of classifications aligned to accounting principles in order to provide the best tax output possible
How data import in crypto tax softwares is useful?
Importing data into a platform is the first step for any crypto trader trying to understand their transactions any further.
Without the ease of use of importing data into a platform, any platform becomes useless, or cumbersome so instead of offering a solution, it causes a new pain point.
Why you need data import?
If you’re extremely impatient or don’t have a lot of time if you have a few or thousands of transactions. A crypto tax tool with a great onboarding experience will not only save you a lot of time.
However, if you’re working with a CPA for crypto tax purposes, it will save tons of money in terms of hourly fees by importing all your information faster and effortless with the proper tool.
Based on our analysis we find best data importing features in the following crypto tax software
Tracking & Management Features
We have used tracking and management features mentioned below as a variable for our analysis.
Coin Analysis Chart
A feature that translates data to information about your portfolio via an app or a dashboard, providing insights into your crypto portfolio’s performance.
linear graphs, bearish or bullish sentiment, candlestick charts or any other feature that helps crypto traders make better decisions based on trends and analytics
Long / Short-term Calculation
Calculation of long term and short term holdings in order to understand tax repercussions, providing the allocation and amount of the cryptocurrency per term.
Cash Flow Analysis
PnL (Profit and Loss) of portfolio or per token, showcasing gains and losses in different time periods.
Full Data Set Analysis
A feature that allows the user to review the entire transaction history with its classifications, providing buy/sell date, amount, source, cost basis, and classification per each individual transaction in a compiled format.
Proper cost basis to calculate tax returns according to each tax method
Smart alerts and insights based on portfolio fluctuations (positive or negative) on customized and specific time periods
Certified Tracking System
SOC or any other certification of that sort based on the evaluation or auditing of the current way of handling transactions from an accounting perspective in order to provide the most accurate source of information.
How tracking & management is useful in crypto tax tools?
A crypto tax tool is not enough. If you’re not an accountant, understanding your entire portfolio transactions based on a glorified spreadsheet won’t be enough. You need a platform that allows you to understand your entire portfolio, analyze and provide you with real insights in order to manage your portfolio. Taxes are seasonal so it becomes extremely relevant at specific periods of time. A platform that can do everything from anywhere is where the real value is.
Why you need tracking and management?
With high volatility and with over 6,000 currencies and 300 exchanges, tracking your portfolio’s performance, it becomes extremely difficult, tedious, and time-consuming. Not only that. When looking for a crypto tax tool, the majority only offer a solution during a specific point in time where you might have already made many wrong decisions without having full control of your portfolio and only reacting. A tool that can provide you with both a tax tool and a tracking platform combines the sexiness of trading analytics with the seriousness of taxes, giving you the perfect platform for any crypto trader.
Best tracking and management features is provided by the following crypto tax softwares
We have used the following tax reporting features as a variable.
Relevant Tax Documents
Provides the right information for taxpayers based on the requirements of their countries jurisdiction based on tax methodologies and laws
Assistance in different languages for different countries with a crypto tax law expert on each country supported
Clear And Guided Report Creation
Step by step guide to import, review, classify, define and export a crypto tax report in the most organized way possible
Calculation Of Crypto Income
Using the right cost basis and the proper methodologies, determining the proper way of evaluating the different transactions to identify income
Export To Different Tools
Feature to add your crypto tax report to several tax platforms based on your countries jurisdiction. For example, TurboTax and Tax Act for the US or Smart Steuer for Germany and Austria.
Transaction Limit For Tax Reports
Allowable transaction limit per tax report package or cost per transaction to file a tax report.
How tax report features are useful?
If you’re looking to generate a tax report, it’s important that is properly handled by a tool that not only provides the right output based on the right information but also that connects to the relevant tax platforms in order to file all your tax returns in one place.
Having a tax expert within the platform is a nice bonus as long as it is a certified crypto tax lawyer with a good understanding of the crypto space.
Why you need Tax reports?
Whether you have just started buying and trading crypto, and you’re realizing just now that cryptocurrencies generate taxable events. If you have been a crypto trader for quite some time already and are frustrated with the existing crypto tools. it is important for you to know that the there are several software that can provide you with a solution to generate a crypto tax report.
Knowing your countries tax method and tracing every single transaction on an excel sheet is a thing on the past. Save thousands of dollars and time by using a tool that will help you do all of that way better than you (no offense).
Best crypto tax tools with tax reports features are:
In this spider web diagram, you can visualize how each tool excels in the different categories. The closer the line is to the category (Data import, tracking, and management features, etc), the better it is in that field.
Frequently Asked Questions
You need to report all your crypto gains and losses. Based on those your crypto tax will get calculated.
You can do it manually by maintaining an excel sheet of all your crypto transactions or you can use any crypto tax softwares mentioned above to automate your tax reporting.
Don't try this at home.