What Is the Situation with Bitcoin and Tax?
While Bitcoin and other cryptocurrencies have been around for over a decade, revenue collection services around the world have had trouble keeping up.
Traders buy and sell on exchanges, miners earn coins through their work, retailers and charities accept cryptocurrencies, and employees are being paid in cryptos for their time.
Now the taxman has finally caught up…
… And he wants your money.
But how are your coins taxed? And what are they classified as? As an asset or a currency? There are many questions being asked and often only very complex answers to them.
That’s where cryptocurrency accounting software comes in.
What Is Cryptocurrency Accounting Software?
A growing number of developers have launched apps to help traders, miners, ICOs, and anyone else involved in the crypto community to figure out how to stay on the right side of the law.
Tax isn’t fun. We get it.
You probably have a million other things you’d rather be doing than counting pennies and organising spreadsheets. That’s why it’s a good idea to get your hands on one of the many cryptocurrency accounting apps that are on the market.
Failing that, we’d recommend that you team up with a certified accountant who understand the cryptocurrency market. Or, if you’re short on cash, you can always use one of the many free crypto tax calculators and file your own reports.
Whichever solution you prefer, you’re in the right place.
Blox is an app that syncronises data from across all wallets and exchanges to give you a real-time report of your assets. It caters to accountants, traders, miners, funds, and VCs.
Price range: Free - $249 per month.
BitcoinTaxes provides you with a cryptocurrency tax calculator, as well as reports for your capital gains, income, and more. They also have a directory of certified tax accountants.
Price range: Depends on each individual accountant.
CoinTracking provides you will a real-time trading overview, coin value fluctuations, tax reports, and more. They are considered one of the leading cryptocurrency accounting applications.
Price range: Free - $3494 for lifetime access.
Formerly known as Bitalpha, Bitwave is a solution that combines wallets, accounting, tax, invoicing, and payroll. The wallets can be used by multiple users with multiple signatures.
Price range: Three months free trial, then depends on your needs.
Not to be confused with CoinTracking above, CoinTracker has partnered with Coinbase and TurboTax to provide a comprehensive tax reporting software that syncs all wallets and accounts.
Price range: $49 - $999 per tax year.
Laura AKA Crypto Tax Girl is an independent CPA who handles all cryptocurrency tax work. She also provides courses in taxation and offers a 10% discount for CoinTracking users.
Price range: Quote upon request.
BearTax can integrate with an unlimited number of cryptocurrency exchanges. All your data is itemized, divided into a gain and loss summary, and you’re able to download your tax forms.
Price range: $0.99 - $599.99 per month.
CryptoTrader is software developed by Coin Ledger that easily allows you to import your trades, add your crypto income, and download a report. Also comes with a directory for accountants.
Price range: Free - $199 per tax season.
eToro is a social trading platform that does not provide accounting services for crypto traders. They have, however, launched their own cryptocurrency tax calculator you can use for free.
Price range: Free.
Happy Tax Services is an accounting firm that has launched a separate branch for cryptocurrency clients. All their packages also include state and federal tax returns.
Price range: $500 - $2,500 per tax year.
Koinly is an app that provides you with a capital gains report, income report, and transfer detection. They also cater to mining companies and ICO startup companies.
Price range: $79 - $399 per year.
Formerly known as LibraTax, Lukka is accounting software that not only calculates your tax returns but also helps you price and evaluate your crypto assets. The app is yet to be launched.
Price range: TBC
Recap is a crypto accounting app that focuses primarily on the UK market. They support all major international exchanges, offers tax reports for all years, as well as end-to-end encryption.
Price range: Free - £400 per year.
TokenTax supports all international exchanges and provides reports for multiple accounts. They also service mining companies, ICOs, and helps with tax-loss harvesting, invoicing and payroll.
Price range: $65 - $1499 per year
Visor is an accounting firm that has partnered with BitcoinTaxes (see above) and offers its customers a $25 discount on their services. Simply upload your documents and you’re done.
Price range: $74 - $594 per tax year.
ZenLedger is another cryptocurrency accounting software that has partnered with TurboTax. They support all major coins, fiat currencies, crypto exchanges, and are very IRS-friendly.
Price range: $149 - $999 per year.
Which One Should You Choose?
With so many options available to you, it can easily become overwhelming. That’s why it’s a good idea to first make a proper assessment of your requirements when it comes to accounting.
So who needs what?
If you’re a casual trader or only deal with cryptos on a hobby-level, then you’ll be able to get by using some of the free services out there.
If, however, you’re a power-user who deals with thousands of transactions every year, then it’s best to invest in a proper service that syncronises all your accounts into one dashboard.
Finally, if you have your finger in many crypto pies, such as stablecoins and ICOs, then it’s best to seek guidance from a certified accountant who understands each of your asset categories.
