Why use a crypto tax calculator?
Even as more people continue to invest in cryptocurrencies, crypto tax is still an area many don’t fully understand. Crypto tax calculation can be a troubling process dealing with different crypto exchanges, digital crypto wallets, and cryptocurrencies, calculating net profits and losses, and eventually filing and submitting tax returns to the Internal Revenue Service (IRS). The IRS taxes cryptocurrencies as intangible assets, just like stocks or bonds. Anybody that sells any cryptocurrency, exchanges it for another digital asset, or uses it to buy a commodity or service must report the transaction to the IRS for possible taxation. Crypto tax calculators are designed to help users understand their crypto taxes better while automating and optimizing their bookkeeping processes to ensure compliance with the tax regulations in their respective states or countries. In essence, a crypto tax calculator simplifies the process of calculating and filing tax returns.
How a crypto tax calculator works
Crypto tax software calculates gains and losses derived from different crypto events, which the IRS considers taxable. The calculator then either gives the information to the user or automatically fills up the tax documents with the data for purposes of filing tax returns. When used correctly, crypto tax calculators can help reduce labor requirements and minimize the time spent in filing tax returns. Crypto tax software tools allow users to integrate their crypto exchanges and wallets so they can pull their transaction data and history from there. The software works automatically and even fills some fields on tax documents while the user can fill in other information manually. To get started with a crypto tax calculator, the following four steps are important: The IRS allows users to select their e-file software programs on the website by following an official process. Taxpayers who don’t know how or which software to use can utilize the IRS wizard to pick one and proceed according to the instructions provided. As a taxpayer, you need to provide the required information on the calculator, including your name, e-mail address, adjusted gross income for the last year, and your (or dependents’) IRS electronic filing PIN. You’re also required to include your social security number, W-2 forms from employers, and any other 1099-INT forms which show the interest paid from the previous year. Other important details include the form 1099-G, which shows refunds, credits, receipts from business or additional income documentation, and offsets of state and local taxes. You may also need to fill out information regarding unemployment compensation and social security benefits where applicable. Once this is done, you can preview the capital gains or losses, calculate your taxes automatically, and even auto-generate and download your tax documents. Some crypto tax calculators even allow users to trade from within the app after integrating their crypto exchanges using the software’s API. After keying in all the important information, the software completes the calculations, and then you follow the directions to submit the tax returns. Crypto beginner’s corner:
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Best crypto tax calculators
Taxpayers who want to simplify their tax filing process can consider using any of the following crypto tax calculators based on their individual needs, preferred features, specs, and pricing plans:
1. Koinly
The Koinly crypto tax calculator can connect easily with all digital wallets, crypto exchanges, blockchain addresses, and investing apps. It gives taxpayers a clear picture of their crypto activities across different platforms. This crypto tax software can work for businesses and individuals looking to calculate and file local and international taxes.
Koinly top features
It automatically synchronizes data from all sources; Koinly connects seamlessly with crypto exchanges, digital wallets, and blockchain addresses; It allows users to export their transaction data to other taxation tools, including TurboTax, TaxAct, and more;The software tracks the user’s portfolio across multiple wallets and accounts while showing real-time details of profit, loss, and tax liabilities.
Key specs
Supports long and short-term calculation;Good for automating tax reports;Offers a free plan and three paid plans: Newbie ($38.06 per tax year for 100 transactions), Hodler ($86.87 per tax year for 1,000 transactions), and Trader ($164.96 per tax year for 3,000+ transactions). These prices can change and therefore, users should verify the latest prices before signing up;Available on free trial;Offers audit trail;Supports import and export of data through API or CVS files;Supports cash flow analysis and cost basis; Supports NFT (added manually) and DeFi taxes; Available in the US, UK, Canada, Australia, and many other countries;Supports more than 6,000 coins on more than 350 crypto exchanges; It works with multiple crypto wallets.
Overall, while Koinly is available on paid plans, it also offers a free plan package, and the software integrates many crypto exchanges and digital wallets. Users should note that it has no autonomous tax-loss harvesting tool. Besides, tax reports are not included in the free plan.
2. Accointing
Accointing offers both crypto tracking and tax reporting services. This crypto tax calculator can work for hobbyists and advanced crypto traders. It’s equipped with tools that allow users to track the crypto market, analyze their portfolio, calculate tax loss, and generate their tax reports for an easy filing process.
Accointing top features
Accointing allows users to analyze their crypto portfolio to help them make better progress in the future;It allows users to track real-time crypto market activities;Users can calculate their gains and losses;It generates tax reports, which users can download and use for filing taxes;Accointing supports tax-loss harvesting.
Key specs
Accointing offers a free starter plan and three paid plans: Hobbyist ($79 per tax year), Trader ($199 per tax year), and Pro ($299 per tax year). Each of the pricing plans comes with a 30-day money-back guarantee; It supports a free trial for up to 25 transactions;Users can import and export data through CSV files;It supports short and long-term tax calculation;It supports cash flow analysis and cost basis;Integrates with many of the most popular tax filing software;Supports multiple cryptocurrencies, digital wallets, and crypto exchanges;Supports manual tracking of NFT transactions;The software is optimized for mobile use to help users track their crypto activities on the go;It’s available in the US, UK, Austria, Switzerland, Germany, and Australia.
Overall, Accointing has features that put it among the best crypto tax calculators to consider. It’s easy to set up and get started either on a desktop or mobile device. It tracks over 20,000 cryptos and integrates more than 450 crypto exchanges. Notably, Accointing free version supports up to 25 transactions only.
3. TokenTax
TokenTax is both a full-service crypto tax accounting firm and cryptocurrency tax calculation software that’s best suited for advanced users and businesses. It’s designed with built-in automation features that help calculate complicated taxes for crypto exchanges so taxpayers can easily file their taxes. TokenTax software generates automated forms and real-time tax reports to save users’ time and help them stay prepared while making more strategic tax decisions.
TokenTax top features
It offers audit assistance and supports all major crypto exchanges;It supports tax-loss harvesting;Automatic integration with other crypto exchanges and tax calculation tools to gather accurate data;Availability of qualified crypto accountants.
Key specs
TokenTax offers three pricing plans: Basic ($65 per tax year), Premium ($199 per tax year), Pro ($799 per tax year), and VIP ($3,499 per tax year);It has no free trial package;DeFi and NFT support;Margin and futures trading support;Data import and export via CVS and API files; Supports short and long-term calculation;It supports more than 100 cryptocurrenciesFIFO, LIFO, Minimization, and average cost tax liability calculations;Tax-loss harvesting dashboard;Mining and staking income reports;Ethereum gas fee reports;Custom enterprise reports;Real-time preview of the tax bill.
Overall, TokenTax is an all-in-one crypto tax machine that can calculate and file taxes. Its tax-loss harvesting feature allows users to cut their clients’ tax liabilities while simplifying complicated crypto tax cases.
4. ZenLedger
The ZenLedger crypto taxation software supports integration with over 400 crypto exchanges, more than 100 DeFi protocols, and over 10 NFT platforms. The platform is continually adding more integration to help users track their crypto trades and see their profits and losses, as well as their tax obligations.
ZenLedger top features
Users can calculate their profits and losses using their transaction history;It offers integration with crypto exchanges and other tax calculation tools, including TurboTax;Tax-loss harvesting tools and integrated accounting reports;Tax professionals are available.
Key specs
ZenLedger offers a free plan that supports up to 25 transactions and four pricing plans: Starter ($49 per tax year), Premium ($149 per tax year), Executive ($399 per tax year), and Platinum ($999 per tax year). All plans offer a generous 1-year refund policy;A unified spreadsheet where users can see all their crypto transaction details in one, easy-to-read spreadsheet;Access to a tax professional;Decentralized applications supported.
Overall, ZenLedger has a dedicated customer support team to help customers seven days a week, including evenings, through chat, e-mail, or phone. It also offers robust security features like two-factor authentication (2FA).
5. TaxBit
TaxBit is another crypto tax calculator designed to help users simplify their tax filing processes. It was founded by CPAs and tax attorneys to help consumers track their crypto activities and transform their data into crypto tax reports. This crypto tax solution comes with automation technology that synchronizes data and gives users final tax reports.
TaxBit top features
Immutable audit trail and issuance of form 1,099 for crypto exchanges;Privacy and security-focused with SOC1, SOC2, and ISO27001 certifications;Portfolio optimization allows users to save on their capital gains tax with a tax-loss harvesting component;Works for individuals, governments, and businesses;An easy-to-use dashboard that displays tax position, asset balances, and unrealized profits and losses;Multiple crypto exchange integrations and more than 2,000 currencies supported.
Key specs
Integration support for Coinbase and PayPal;Three pricing plans: Basic ($50 per tax year), Plus ($175 per tax year), and Pro ($500 per tax year). It also offers a free version with unlimited transactions and connected wallet addresses; Offers cost basis and audit assistance;Supports cash flow analysis and short and long-term calculation;Supports data import and export, NFT, and DeFi taxes;Works on all crypto exchanges;No free trial;Manual formatting of CSV files;Only works for taxpayers reporting to the IRS in the USA.
Overall, TaxBit stands as one of the best crypto tax calculators on the market. Its automation feature allows it to synchronize users’ transactions from across various crypto exchanges while simplifying their tax filing process.
6. CoinTracking
CoinTracking works for diversified investors and traders, helping them track their crypto activities across different exchanges. It provides users with details of market trends for different cryptocurrencies using its automation features. With more than 1.2 million active users, CoinTracking offers personalized analysis, trade imports, tax declaration, and professional help.
CoinTracking top features
Gives users the tools to monitor the trends in the crypto market for informed trading decisions;Generates reports of profits and losses;Allows users to import and export data;Generates crypto tax reports for crypto traders and crypto companies.
Key specs
CoinTracking offers a free plan that supports up to 200 transactions and three other pricing plans: Pro ($10.99 per month billed annually), Expert ($16.99 per month billed annually), and Unlimited ($54.99 per month billed annually).CoinTracking supports Android and IOS apps;It supports more than 5,000 crypto coins and exchanges;CoinTracking supports API-based trading with detailed charting and portfolio tracking.
Overall, CoinTracking is suitable for both new investors and seasoned crypto traders, allowing them to track their transactions in real-time. It offers professional assistance through experienced crypto tax professionals who can guide users on how to enter their tax details on the dashboard. Besides, CoinTracking offers a corporate package that works specifically for taxpayers that handle multiple clients and team members such as accountants, tax attorneys, investment, and trading companies, among others.
7. BitcoinTaxes
BitcoinTaxes offers fast crypto calculations, exchange imports, and the ability to download and file. It allows taxpayers to file their crypto taxes easily whether they have traded, spent, or moved their cryptocurrencies. Users simply need to upload or add transactions from various crypto exchanges and digital wallets they have used, together with any crypto they may already own, and the software will calculate their capital gains.
BitcoinTaxes top features
It calculates capital gains and losses;It offers full tax preparation services delivered by qualified tax attorneys, CPAs, and authorized agents in the US and Canada;Tax-loss harvesting tools;Professionals to advise taxpayers on tax planning.
Key specs
BitcoinTaxes offers various pricing plans for individuals, traders, and tax professionals. But all versions include all their standard features, such as calculation of capital gains and losses, FIFO and specific identification, reports, and software imports, among others. Pricing plans are as follows:
Free: Up to 20 trading transactions; all standard features; e-mail support;Premium ($44.95 per tax year): Up to 1,000 trading transactions; all standard features; e-mail support;Premium Extra ($54.95 per tax year): Up to 5,000 trading transactions; all standard features; e-mail support;Deluxe ($64.95 per tax year): Up to 10,000 trading transactions; all standard features; e-mail support.
BitcoinTaxes also offer trader pricing for various categories as follows:
Trader 50k ($139 per tax year): Up to 50,000 transactions; all standard features; e-mail support;Trader 100k ($199 per tax year): Up to 100,000 transactions; all standard features; e-mail support;Trader 250k ($264 per tax year): Up to 250,000 transactions; all standard features; e-mail support;Trader 500k ($399 per tax year): Up to 500,000 transactions; all standard features; e-mail support;Trader 1M ($529 per tax year): Up to one million transactions; all standard features; e-mail support;Trader Unlimited (Contact the company for pricing): Unlimited transactions; all standard features; priority e-mail support; dedicated hardware.
Additional information on crypto tax calculators
Crypto tax calculators are available in different types, which allow taxpayers to choose what best works for them according to their taxation and financial needs. Common types include:
Form-based tax software: This type of crypto tax calculator is like a tax document layout where a taxpayer fills in the correct data in the corresponding places according to the tax document;Interview-based tax software: This type of tax calculator collects information from the user in a question-and-answer format to provide the necessary and correct information filled in relevant sections;Electronic filing software: Also known as e-filing software, this type of crypto tax software is more secure and reduces filing errors and time. It allows users to instantly transfer their tax information from their computers directly to the IRS.
The IRS allows e-filing from its website by simply filling out the required forms. This can be done either online or by downloading the forms, followed by submission. The e-filing software guides users through the steps to have them fill the documents correctly before it calculates the expenses and deductions using the information provided. The e-filing software also is updated with recent documents from the IRS, so users don’t have to worry about getting the latest documents from a separate site. There’s no uploading and downloading of forms. However, most e-filing forms are paid to access advanced features. Besides, they usually don’t blend with all crypto exchanges. Most of them also don’t incorporate additional investment opportunities, including staking, mining, and others.
Factors to Consider When Looking for a Crypto Tax Calculator
The following factors are important to consider when it comes to choosing a crypto tax calculator:
Available integrations
The best crypto tax calculators integrate with major crypto exchanges, such as Coinbase, Kraken, and Binance, among other alternatives. This enables users to seamlessly pull their data and transaction details from various crypto exchanges without having to manually key them in. The tax calculation tool should also track the number of coins traded, the ‘hodl’ duration, and the dates of transactions. In addition to crypto exchanges, users should also check whether a crypto tax calculation tool supports different blockchains, crypto coins, DeFi protocols, futures, and NFT trading, among others. More integration allows users to generate a wider view of their crypto transactions and activities across different platforms.
Supported countries
Some crypto tax calculation tools support only selected countries fully while offering partial support to other countries. Users need to find crypto tax calculators that address tax requirements in their respective countries. For instance, a crypto tax calculator that supports more countries can lower the chances of manual uploads or switching to different software if the user is outside their region. It’s also important to consider whether a crypto tax calculator offers downloadable tax forms and exclusive accounting methods such as First-In-First-Out (FIFO), Last-In-First-Out (LIFO), Highest-In-First-Out (HIFO), as well as Adjusted Cost Base (ACB).
Security and reputation
Crypto tax calculators with a good reputation are reliable and trustworthy, owing to their partnerships with reputable financial technology and accounting companies. For instance, crypto tax software programs that partner with credible tax tools such as TurboTax and those built by CPAs, crypto veterans, and tax attorneys tend to gain more credibility. Security is an important component of a tax calculator to ensure that the users’ data remains safe and secure. A software program with a transparent policy often provides that nobody harvests the information provided by the customer. The provision of read-only access to crypto exchange accounts can also ensure that the user’s funds remain protected when during data import.
Pricing per tax year and transaction limit
Another point to consider is the pricing per tax year, which for most companies, depends on the transaction limit. Some crypto tax calculators offer free services that allow customers to calculate and preview their tax reports up to a given transaction limit and charge only when they want to download those reports. The free version allows users to determine whether the crypto tax calculator has the right features for their needs before they can shell out any amount.
Customer support and ease of use
The main idea behind using a crypto tax calculator is to simplify the tax filing process. This implies that users may want to consider crypto tax calculators with highly intuitive interfaces to allow for easy navigation of the platform. Besides, users should be able to import their data and generate tax reports fast without errors or manual adjustments. On the same note, a responsible customer support team can be helpful in addressing customers’ concerns in real-time. To achieve this goal, some crypto tax calculation companies integrate live chat support on their platforms, while some publish educational resources to provide more information on filing crypto taxes.
Final Thoughts
Paying taxes is an obligation for any responsible citizen, and cryptocurrency holders are not an exception. In fact, the (IRS) is serious about tax evasion, and failure to file taxes may result in audits, fees, or even jail time. Crypto tax calculators help users streamline the filing process by tracking their data across all their crypto platforms and activities. They auto-generate tax reports and ensure complete compliance with tax laws within their respective countries. Notably, the features listed under the mentioned tax calculators may not be exhaustive, or they may change as the company deems fit. It’s, therefore, important for users to conduct an in-depth check before signing up for any crypto tax calculation program.
