With the recent boom in crypto, it’s important to know what your taxes are going to be like. This article will break down 7 of the best tax software for cryptocurrency.
The best crypto tax software 2021 is a tool that can help you calculate taxes on your cryptocurrency. There are 7 different types of software available to calculate the taxes.
Have you ever sold, traded, or exchanged Bitcoin or other cryptocurrencies? If that’s the case, you may owe money on your taxes.
As Bitcoin has grown in popularity, more individuals have been engaged, and some have even earned large sums of money trading and HODLing Bitcoin.
What’s more, guess what? If you make money using cryptocurrencies, the government wants a piece of the pie.
Only two things are certain in life, according to Benjamin Franklin: death and taxes.
You may have to pay taxes on Bitcoin, whether you use it as an investment or a money. Failure to declare your profits (and losses) may result in fines and interest on overdue taxes.
Keeping track of all past pricing data for all of your coin-to-coin transactions for tax purposes, on the other hand, may be a headache. It’s not pleasant to calculate your bitcoin profits and losses by hand. It’s a really time-consuming procedure.
Furthermore, crypto tax laws, filing requirements, and regulations may differ per jurisdiction. It’s not easy to figure out how to pay bitcoin and other crypto taxes. And filing your taxes incorrectly may cost you more than you owe.
Fortunately, there are many crypto tax tools available to assist you.
Here are the top 7 crypto tools to help you keep track of your cryptocurrency transactions, compute your crypto taxes, reduce your tax obligations, and simplify your paperwork, no matter where you are in the world.
Tax Software for Bitcoin and Cryptocurrencies
|Tax Tools for Cryptocurrencies||Token Tax||Trader.tax is a cryptocurrency trading website.||Bear Tax||Cryptocurrency Tax||Koinly||Ledger of Zen||CoinTracker|
|Countries that have received assistance||International||International||The United States of America, the United Kingdom, Austria, Australia, Canada, India, and Japan are all represented.||International||More than a hundred nations||USA||International|
|Integrated Exchanges (number)||64+||36+||50+||20+||350+||All of the main stock exchanges||300+|
|Harvesting Tax Losses||✓||✓||X||X||X||✓||✓|
|Characteristics||Integration with TurboTax||Integration with TurboTax||Intelligent Matching||Support 8,000+ cryptocurrencies||Support 6,000+ cryptocurrencies||Integration with TurboTax||Tax calculator and cryptocurrency wallet tracker|
|Plan with no cost for the rest of your life.||X||X||X||✓||✓||X||✓|
|Tier Schemes (per tax year)||$65||$49.00 (Use CRYPTOTAX10 for 10 percent OFF any plans)||$10||$199.00 (Early Access Special -FREE)||$49||$49||$59|
But first, let’s go over some of the fundamentals of cryptocurrency and taxation.
- How can you figure out how much tax you owe on cryptocurrency?
- How much do you pay in taxes on cryptocurrency?
- What exactly is taxed and what isn’t?
What is the tax rate on cryptocurrency?
Is it true that you must pay taxes on cryptocurrency?
When crypto investors, traders, or HOLDERS sell, liquidate, or exchange cryptocurrency, they must pay capital gains tax.
The treatment of cryptocurrency taxes varies per jurisdiction.
In the United States, for example, Bitcoin is taxed as property rather than money.
Calculation: (Proceed) — Realized Capital Gain (Cost Basis)
- The term “proceed” refers to the value of your coin at the moment of sale.
- The cost basis refers to the price you paid for the coins.
For example, if you buy 1 BTC for $10,000 USD and sell it for $20,000 USD, your capital gain is $10,000 USD ($20,000 — $10,000).
The amount of taxes you must pay is determined by two factors:
- Your earnings/profits
- Long-term vs. short-term ownership of the cryptocurrency before selling
Capital Gains: Long-Term vs. Short-Term
A long-term capital gain occurs when you keep your coins for more than a year before selling them. It’s also regarded as a short-term capital gain if you hold the coins for less than a year.
Short-term: You pay $7,000 USD for 1 BTC on January 1, 2020. On January 15th, 2020, you sell 1 BTC for $8,800 USD. You made a $1,800 USD short-term gain that is liable to your short-term capital gains tax.
- Short-Term Tax Rates: 10%, 12%, 12%, 12%, 12%, 12%, 12%, 12%, 12%, 12%, 12%, 12%, 12%, 12%, 12%, 12%, 12%, 12%, 12%, 12%, 12%, 12%, 12%, 12%, 12%, 12%, 12%, 12%,
Long-term: On January 1st, 2019, you pay $3,500 USD for 1 BTC. On January 15th, 2020, you sell 1 BTC for $8,800 USD. You’ve made a long-term gain of $5,300 USD, which will be taxed as long-term capital gains.
- Long-Term Tax Rates: 0%, 15%, or 20% [depending on income]
Long-term capital gains are generally taxed at a lower rate than short-term capital gains. If you keep crypto for a year or longer, you will pay fewer taxes and save the most money.
If you reside outside of the United States, you may learn more about the details of your country’s tax laws here.
What are the kind of cryptocurrency events that are taxable?
Depending on the crypto activities you engage in, you may be required to pay cryptocurrency taxes if you:
Cryptocurrency Non-taxable Events
However, not all cryptocurrency-related transactions are taxed. Here are several crypto-related activities that are completely tax-free:
- Transferring bitcoins between your personal wallets
- Transferring cryptocurrency between exchanges
- Purchasing cryptocurrency using fiat currency (USD, SGD, GBP etc)
- Donating cryptocurrency to a tax-exempt charity or a non-profit
- Cryptocurrency may be given as a present.
How to Work Out Cryptocurrency Taxes in Any Country
Now that you know how this bitcoin tax works, you’ll need to figure out how to assess your tax exposure from cryptocurrency trading.
This means you’ll need to keep track of all your crypto transactions and figure out the cost basis to see whether you’ve made a profit or lost money.
And it’s easy since these crypto tax tools take care of everything for you.
From monitoring all of your transactions across several crypto exchanges to analyzing trades, producing real-time profit and loss reports, and calculating and reporting taxes on your crypto activities, this app has you covered.
It will save you a great deal of time and frustration, allowing you to spend more time studying, thinking, and making trading choices.
You can discover a tool that will work for you no matter where you are or what degree of trading ability and expertise you have.
Calculators for Cryptocurrency Taxes: 7 of the Best
1. Tax on CryptoTrader.com
If you’re new to the cryptocurrency market and don’t know much about taxes, CryptoTrader.tax can assist!
CryptoTrader.tax is a low-cost yet comprehensive cryptocurrency tax solution that automates the whole cryptocurrency tax filing process.
Simply import your transactions, add any bitcoin revenue, and create your auto-filled tax papers in seconds! You may use TurboTax to import your produced reports, send them to your CPA, or just file them yourself!
Because CryptoTrader.tax has collaborated with Turbotax, a prominent tax preparation software in the United States, your data may be immediately loaded into Turbotax for e-filing.
Traders may import data directly from 36+ major exchanges using CryptoTrader.tax. If your exchange isn’t listed among the supported exchanges, just download reports from your exchange account and upload them to CryptoTrader.Tax.
You’ll have the following exportable reports after your tax exposure has been calculated:
- Form 8949 (Income Tax Return)
- Report on the audit trail
- Report on cryptocurrency earnings
- Report on positions at the end of the year
- Direct import from TurboTax online
Their Tax Harvesting Tool will help you plan your future transactions by suggesting coins that you should sell to avoid paying needless taxes, allowing you to reduce your losses and maximize your profits.
Cryptotrader.tax’s main features include:
- Support for a variety of cryptocurrency exchangers
- To balance and decrease your capital gains, use tax loss harvesting methods.
- International Tax Assistance
- TurboTax’s Most Trusted Partner
- In minutes, create a variety of tax reports based on the information you supplied, including IRS Form 8949, Audit Trail Report, Cryptocurrency Income Report, and more.
Using the same techniques that tax experts use, ensure the correctness of your crypto tax data.
It comes with Tax Professional Suite, which allows accountants to quickly prepare and submit bitcoin taxes for their customers.
- Support staff that is dependable and quick to respond
Other crypto calculators need you to upgrade in order to access sophisticated features such as Tax Loss Harvesting, FIFO, LIFO, and Specific Identification, Capital Gains Report, Report Preview, and more. Taxes do not.
No matter whatever subscription you select, you’ll have unlimited access to all features and tools.
CryptoTrader.tax now provides four distinct price options. The kind of plan you choose is determined on the total number of transactions you make.
- Prices start at $49 for the whole tax year (up to 100 trades)
There are no ongoing fees; you just pay a one-time cost for tax reports.
Sign up for a free account here and use the code CRYPTOTAX10 to save 10% on your tax preparation costs!
TokenTax is a kind of tax that is imposed on tokens.
TokenTax is the most straightforward and effective way to calculate and submit taxes.
TokenTax is also the only tax software that is compatible with all major cryptocurrency exchanges. They will link directly with the platforms and instantly import all of your trading history, regardless of which exchanges you trade on. There’s no need to be concerned about your coins not being included in the TokenTax computation and reporting system.
They’ll use all of your trade data to figure out how much you owe and create all of the paperwork you’ll need to submit your bitcoin taxes.
TokenTax’s Tax Loss Harvesting tool is unique in that it allows crypto traders to save the most money on their tax returns. It’s simple: their minimization algorithm will advise you which coins to sell first to minimize the amount of tax you pay on your crypto holdings.
Furthermore, TokenTax offers an in-house staff of CPAs and filing specialists that will handle your whole return.
TokenTax is here to make sure you never overpay in taxes, whether you’re a miner, a day trader, or a HODLer.
TokenTax’s main features include:
- Supports any nation in any currency, including the United States, the United Kingdom, Canada, Australia, Japan, South Africa, and others.
- Integrated Tax Loss To save money on taxes, harvesting is done.
- Crypto traders should use a sophisticated tax plan.
- Many file types are supported, including forms 8949, TurboTax, FBAR, FATCA, and any other file you may need.
- When you trade on BitMEX, Deribit, Bybit, or Bitfinex, support margin trading taxes.
- Import all of your trade data from exchanges and wallets automatically.
- Provide complete tax filing services that are tailored to your tax and crypto-related needs.
- Customer service is outstanding.
TokenTax has a number of different price options, beginning at $65 per year. Live chat assistance, unlimited tax form changes, Turbotax connection, and IRS Form 8949 or International Report are included in all plans.
The cost of each plan increases in proportion to the total number of transactions and advanced features you need. TokenTax now offers a Full Tax Filling package that enables you to work directly with a CPA to submit your tax return, which includes crypto!
BearTax is the third option.
BearTax is a reputable bitcoin tax software that makes calculating, filling out, and reporting taxes a breeze.
BearTax extracts trades from more than 50 crypto exchanges, analyzes and calculates capital gains and losses based on your transactions, and produces tax papers for you to submit. Additionally, you may manually enter transactions or import your trades using a generic file.
The following is how it works:
- Consolidate your transactions: BearTax will use APIs or file uploads to gather all of your trades from virtually every exchange on the internet.
- Examine your professions: For each transaction, BearTax will determine the appropriate cost-basis and process it using the appropriate calculation technique.
- Your tax document may be downloaded here: That is all there is to it. BearTax will generate a tax document for you automatically. After that, you may either submit the tax yourself or send it to your accountant.
The following exchanges are presently connected with BearTax:
Individuals, CPAs, and accounting companies will benefit from this platform.
BearTax’s Smart Matching technology is a standout feature. This tool will help you keep track of money transfers across exchanges, ensuring that you don’t incur excessive exchange costs when depositing or withdrawing cryptocurrency.
The best part is that you won’t have to worry about doing manual calculations or utilizing spreadsheets anymore.
BearTax’s main characteristics include:
- The UI is simple to use.
- Customer support is available 24 hours a day, 7 days
- Without a paywall, you can get a free gain-loss summary.
- Handles large amounts of data without crashing
- Deposits and withdrawals are intelligently matched across exchangers.
- Avoid forced sales and solely examine taxable events.
- There will be no negative balances since BearTax will prompt the user to check for missing sources.
Supported nations include the United States, the United Kingdom, Austria, Australia, Canada, India, and Japan.
BearTax provides a variety of price options depending on the quantity of crypto transactions, ensuring that you don’t overpay for services you don’t need.
- The cost of a tax year begins at $10. (Basic plan includes 20 transactions with unlimited exchanges)
CoinTracker is number four.
CoinTracker is a bitcoin wallet tracker and tax calculator rolled into one.
CoinTracker, which acts as a crypto portfolio and tax manager, securely auto-syncs your transactions from your exchanges or wallets, displays your cryptocurrency activities, and simplifies the process of filing your crypto taxes.
CoinTracker will first link all of your wallets, exchanges, and DeFi platforms together. The software will then monitor fees and margin trading for you, enabling you to keep track of your whole crypto portfolio in one location. You’ll get a clear image of your crypto investment performance and ROI over time if you do it this way.
CoinTracker’s main features include:
- Over 2,500 cryptocurrencies are supported.
- Simple to use
- Transactions from over 300 major exchanges and wallets are imported.
- Apps are available for both iOS and Android devices.
- Uploads in CSV format are supported.
- Accounting techniques include FIFO, LIFO, LIFO Perpetual, and Average Cost.
- Downloadable PDF tax forms
- Transactions that can be edited
- A one-of-a-kind interactive “Ledger Tool” for viewing and modifying transaction data.
- The importance of security, encryption, and user anonymity is emphasized.
- Full support in the United States, the United Kingdom, Canada, and Australia, as well as partial support in every other nation.
CoinTracker offers many price options based on the amount of transactions and unique features you need.
They also offer a limited free plan that allows you to manage 25 transactions and compute your bitcoin taxes correctly.
- Annual fees begin at $59 per year.
CryptoTax is number five.
Without employing a tax expert, CryptoTax can help you get the most out of your tax file.
Treat it as though it were your own personal digital tax advisor. All of your crypto actions, including airdrops, ICOs, hard forks, staking, lending, margin trading, bounties, gifts, and ordinary trades, will be handled by CryptoTax.
Furthermore, since CryptoTax supports over 8,000 cryptocurrencies, you can be certain that this tax software will assist you in computing profits and losses on any of your altcoins.
Furthermore, CryptoTax is a worldwide company that provides country-specific tax reports in over 30 different currencies.
If you reside in the United States, Germany, or Switzerland, you may generate country-specific tax reports for free up to 50 transactions using CryptoTax.
Users throughout the rest of the globe, on the other hand, will get a full collection of general tax reports totally free of charge.
However, regardless of your nation, you may utilize it for tax reporting.
It’s extremely easy to sign up for CryptoTax. To begin utilizing this service, all you need is an email address, so you may stay anonymous.
CryptoTax’s main features include:
- With 30+ local currencies available, provide complete tax reports that are country-specific.
- Major exchanges and wallets are fully connected.
- Process a wide range of cryptocurrency transactions.
- Professional assistance is provided at no cost.
To compute taxes for a maximum of 50 transactions, use CryptoTax’s $0, forever free plan. If you’re a frequent trader, their options for processing up to 10,000 transactions cost $199 each year.
CryptoTax is offering a limited-time Early Access Special in which you may acquire their Pro and Unlimited Plans for free. (The Pro plan costs $199 per year, while the Unlimited plan costs $599.)
Here’s where you can get started for free and check whether this unique offer is still available.
In minutes, Koinly assists cryptocurrency traders, investors, and miners in calculating their capital gain or loss risk.
Their user-friendly interface makes importing your BTC, ETH, and other crypto transactions from the ledger a breeze. You may also sync all of your exchange trading history in a single click, ensuring that you’re paying the correct amount.
You may simply export your transactions to TurboTax, TaxACT, or other tax software for simple filing after your tax report is complete.
Furthermore, Koinly is available in over 100 countries worldwide, including the United States, the United Kingdom, Canada, Australia, New Zealand, Denmark, Ireland, Sweden, and Singapore.
Koinly’s main characteristics are:
- Keeping track of your crypto assets and taxes has never been easier.
- All of your transactions may be seen and managed in one location.
- 6000+ altcoins and shitcoins are supported.
- Over 100 nations are supported worldwide.
- Create crypto tax reports that comply with local regulations.
There is a free plan with limited but useful functionality that lasts indefinitely. You may execute up to 10,000 transactions and connect to an unlimited number of exchange accounts and wallets with the free plan.
If you want to download tax forms, you’ll need to join up for one of their premium programs, which start at $49 per year.
7. Ledger of Zen
ZenLedger is another excellent cryptocurrency tax software that makes it easier for crypto investors and CPAs to calculate and file their taxes.
They’re compatible with all major crypto exchanges and wallets, and they support all major cryptocurrencies and fiat currencies, including Bitcoin, Ethereum, Litecoin, Dollars, Euros, Pounds Sterling, Yen, and more.
ZenLedger is very simple to use. Simply submit your transactions to get a rough estimate of your tax liability. It’s also completely free.
You’ll only be charged when you see, download, and access your profit/loss statements and IRS tax forms that have been auto-completed each year.
Furthermore, since ZenLedger is an approved Turbotax partner, your data will be seamlessly integrated into the tax preparation program.
ZenLedger’s main features include:
- Simple to use
- All major exchanges and wallets are supported.
- Tax loss harvesting is a technique that may help you save money on capital gains taxes.
- Integration with TurboTax
- It includes a comprehensive CPA solution that allows accountants to manage their whole client portfolio from a single interface.
- In minutes, you can produce IRS-friendly tax reports automatically.
ZenLedger offers a free account creation service. You may import your data and aggregate your cryptocurrency transactions for free.
Zen Ledger, on the other hand, isn’t entirely free. To obtain tax reports, you must pay a fee.
The cost of ZenLedger software is determined by the total number of transactions and asset values.
- Annual fees begin at $49 per year.
So there you have it! 7 top crypto tax softwares to help you keep track of, calculate, and submit taxes, as well as save as much money as possible!
Some cryptocurrency programs even have a free trial period. You have no excuse not to disclose your crypto assets’ profits or losses.
To take care of your tax issues, say goodbye to manual spreadsheets and welcome to smart crypto solutions.
How can you figure out how much Bitcoin and cryptocurrency taxes you owe?
Is there any bitcoin tax software that you use to make the process easier? Why do you think that is?
Finally, if you found this article useful, please share it on Facebook, Twitter, and Pinterest!
If you believe any of your friends might benefit from this, please forward it to them.
Next, I’ve selected a few books for you to read:
I’m obsessed with earning money online.
Soon, I’ll be providing additional tips and recommendations. Keep an eye out for updates.
Sign up for my emails here if you haven’t already.
The best crypto tax software for defi is a tool that allows users to calculate taxes on cryptocurrency. There are many different types of software available, but these 7 are the best ones.
Frequently Asked Questions
What is the best software for crypto taxes?
The best software for crypto taxes is a tax professional.
How do I calculate crypto taxes?
The best way to calculate crypto taxes is to use a tax calculator.
What version of TurboTax do I need for cryptocurrency?
TurboTax Deluxe will cover you for all your cryptocurrency-related tax needs.
- crypto tax calculator
- crypto tax software comparison
- best crypto tax software reddit 2021
- best crypto tax software reviews
- bitcoin.tax review