5 Best Bitcoin & Crypto Tax Software

best crypto tax software

This guide shows you all the best crypto tax software on the market in 2021.

We’ve tried them all, and each one appeals to a different kind of person.

This guide will tell you which one is best for your situation to save you time and money this tax year.

  • TAX SOFTWARE
  • Koinly
    • Very clean interface makes it easy to use
    • Supports over 300 exchanges
    • Can export US and Canadian tax forms
  • CryptoTrader.Tax
    • Easy import from nearly any crypto exchange
    • Can be uploaded to TurboTax
    • Support for many exchanges
  • Accointing
    • Easily print tax reports at any time
    • Connect 4500 coins form all exchanges and wallets
    • Supports USA, UK, Austria, Germany, and Switzerland


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How to Choose a Crypto Tax Software


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 like Accointing or CryptoTrader.

Accointing's tax software is one of th best crypto tax software suites we've seen

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, like CoinTracking or the upgraded tiers of some of the serives below.

Koinly and other services allow you to synchronize all your accounts.


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 (CPA) or tax professional who understands each of your asset categories.


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Best Crypto Tax Software Options


KoinlyKoinly Get Koinly

Koinly is an app that makes it easy to import your data and download capital gains tax forms like the 8949, Schedule D and export to Turbotax. It supports the US, UK, Canada, Australia and various other countries.

Price range: Depends on features needed. Free to $249 per year.




Visit Koinly's Website

cryptotraderCryptoTrader Get CryptoTrader

CryptoTrader offers an easy way to calculate all your crypto taxes, and has integration with TurboTax.

Price range: Free - $299 - Depends on Volume.



Visit CryptoTrader.Tax

accointingAccointing Get Accointing

Accointing allows you to track your crypto portfolio while keeping a record of all your transactions in order for you to be able to print a tax report at any point in time. It exports your trades in the proper format for taxes in the USA, United Kingdom, Austria, Germany and Switzerland.

Price range: Free - $259 per year.




Visit Accointing's Website

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Importing Your Taxes into Turbotax


We’ve reviewed the best bitcoin and blockchain tax software, now we’re going to focus on the next step of the process: getting that data into Turbotax.

  • TAX SOFTWARE
  • Koinly
    • Very clean interface makes it easy to use
    • Supports over 300 exchanges
    • Can export US and Canadian tax forms
  • CryptoTrader.Tax
    • Easy import from nearly any crypto exchange
    • Can be uploaded to TurboTax
    • Support for many exchanges
  • Accointing
    • Easily print tax reports at any time
    • Connect 4500 coins form all exchanges and wallets
    • Supports USA, UK, Austria, Germany, and Switzerland

Importing Transactions

Crypto tax software integrates with your exchange’s API to fetch and compile a list of all your transactions.

Koinly's service supports over 300 exchanges.


Exchanges such as Binance also allow you to manually export your trade history.

binance export

Once you have imported your trade history, the crypto tax software will compile this and give you a rundown of total capital gains or losses.

cointracker tracking
Contracker.io interface.


You can now export your data. IRS Form 8949 (Sales and Other Dispositions of Capital Assets) is the most common way to do this, and it’s always a good idea to keep a copy for your own records. You can also export directly to TurboTax’s proprietary online format.

Koinly and other services allow you to export in a range of different formats.


Filing With Turbotax

Filing your cryptocurrency capital gains/losses with TurboTax is simple. For this tutorial, we’ll be using the online platform.

To file investment gains and/or losses, you’ll need TurboTax Premier or Self-Employed.

When filling out your financial picture, be sure to select I sold or traded cryptocurreny.

1. Navigate to cryptocurrency

Once you have begun your return and filled out the initial prompts, navigate to the Cryptocurrency tab by choosing Federal > Wages & Income > Cryptocurrency

sold or traded

2. Add cryptocurrency data

Here, you can link the third-party service you used to prepare your trade history, or choose to enter information manually.

cryptocurrency info

3. Import

Upload the .csv file that you prepared earlier.

import transaction into turbotax

4. Review

Check the summary of your taxable transactions to ensure that everything looks right.

turbotax UI

5. Submit

That’s it! You’ve successfully imported your cryptocurrency transactions into TurboTax and can rest assured that your capital gains and/or losses will be accurately reported.

Make sure to check out these other crypto tax services as well to find the right one for you!

  • TAX SOFTWARE
  • Koinly
    • Very clean interface makes it easy to use
    • Supports over 300 exchanges
    • Can export US and Canadian tax forms
  • CryptoTrader.Tax
    • Easy import from nearly any crypto exchange
    • Can be uploaded to TurboTax
    • Support for many exchanges
  • Accointing
    • Easily print tax reports at any time
    • Connect 4500 coins form all exchanges and wallets
    • Supports USA, UK, Austria, Germany, and Switzerland

Crypto tax software makes it easy to properly file taxes on your cryptocurrency trading and protects you in the case of an audit.


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Why you Need Crypto Tax Software


Unfortunately, in most countries, the laws and regulations around crypto are murky at best. This is especially true in the Unites States.

Different parts of the government disagree about what kind of asset virtual currencies like Bitcoin are. The SEC does not consider Bitcoin a security. Instead it is a commodity. The IRS considers Bitcoin property.

Virtual currency is treated as property and general tax principles applicable to property transactions apply to transactions using virtual currency.

Internal Revenue Service USA
SEC Chairman says Bitcoin is not a security...but the IRS still expects you to pay.

That means you are expected to keep track of not only every trade but every transaction. Due to Bitcoin’s usage as money, the IRS has a hard time differentiating between using Bitcoin as a speculative asset to be traded and and using Bitcoin to buy a cup of coffee. This makes trading and using Bitcoin and other coins with different legal definitions very cumbersome come tax season.

On top of that, the IRS has warned many holders of crypto that they are very serious about citizens who skirt the laws or try to use crypto to evade taxes…and they will find out.

The IRS is not fooling around with you. Take audits seriously.

You could spend countless hours tracking all of your trades and purchases and trying to make sense of capital gains. This is amplified by the fact that individual states have their own laws.

That’s why software like the one’s recommended above are so handy. Sure, each of them cost a few bucks, but for the time you save and the protection this software gives you if you are ever audited is worth every satoshi.


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Frequently Asked Crypto Tax Questions


What is Cryptocurrency accounting software?

Crypto tax software is pretty simple - instead of having to calculate all the taxes you owe on all your trades or crypto income, you can input your data into crypto tax software and it will generate what you owe.

The softwares always support Bitcoin, Ethereum, Litecoin, Defi and nearly any other coin.

It will also hand that information over to your regular tax software, like turbotax.

If you make lots of trades, most crypto tax software will connect to your exchange accounts and import the data for you.

How does cryptocurrency taxes work?

If you have ever paid taxes on real estate or any other hard asset, then crypto works the same way. Any profits are taxed as capital gains.

That means you pay taxes on the difference between the price you bought the coins and and the price you sell them at. This is true whether you live in Canada, the US, or the UK, as well as many other countries.

Do I still pay taxes if I only made losses on my cryptocurrency?

You must report both profits AND losses. However, if you report losses, you may actually be entitled to reduce your crypto taxes in the future so its actually in your interest to report these losses.

Are Crypto to Crypto Trades Taxed?

Yes, anytime you trade one cryptocurrency for another, you are effectively selling the first currency and buying the second one.

This creates either a profit or a loss of the first cryptocurrency and a new cost-basis for reporting the second. Make sure to keep track of all crypto to crypto trades.

Do I have to pay tax if I transfer crypto from wallet to wallet?

If you do not own the second wallet, then yes, you must pay capital gains on the coins you transferred since you are effectively ‘selling’ them.

If you own both wallets, there is no sale, and therefore there is no tax reporting liability.

How Will the COVID19 tax delay affect crypto holdings?

On March 20, 2020, the Treasury Secretary Steve Mnuchin announced on twitter that all 2019 income taxes would now be due no later than July 15, 2020 (as opposed to the normal April 15 due date). Bitcoin and other crypto holdings are no exception. Whatever crypto sales gains you would have reported for your 2019 taxes should have been included in your 2019 tax return due July 15, 2020.

Can I pay my taxes in the coins I hold?

Even in 2020, most jurisdictions will not allow you to pay any taxes in crypto of any kind. There are a few places, such as the swiss canton of Zug and the US state of Ohio, among others, to allow residents to pay their taxes directly in Bitcoin. Overstock.com became the first US company to pay all of its taxes in Bitcoin.

There used to be a service called snapcard that you could pay with Bitcoin to pay your taxes for you for .5% fee. However, they rebranded as Masscard in 2015 and then to Wyre and ceased offering this service.

Won’t exchanges, like Coinbase, generate my tax documents for me?

No. While some exchanges do give you detailed trading reports of your year’s activity, these are not technically the same documents that you will have to turn in to the IRS. Some exchanges will not even produce documents like these at all. Don’t rely on an exchange to:

Unfortunately, it is on you to make sure your taxes are paid and properly documented on the correct forms.

What is FIFO vs LIFO?

FIFO means your earliest buys will be the ones considered for capital gains when you sell. LIFO means your most recent buys will go first when considering which coins were sold for capital gains.

FIFO is the most common method used, since it usually sets you up to pay less in taxes due to sales being long term gains rather than short term.

How will Crypto on Paypal be Taxed?

In October, PayPal made it possible to buy, hold, and sell digital currency directly on its platform. You cannot, however, withdraw the Bitcoin from your account, leading many to wonder if it will be taxed the same way, since you are never taking control of the private keys.

Digital assets on PayPal will be taxed exactly the same way it is taxed when you hold the coins yourself. Namely, a taxable event occurs everytime you sell cryptocurrency, be it for another cryptocurrency or for a cup of coffee.

PayPal also clearly states that determining your tax liability is placed firmly on you.

It is your responsibility to determine what taxes, if any, apply to transactions you make using your Cryptocurrencies Hub. You can access your transaction history and account statements through your PayPal account for purposes of determining any required tax filings or payments

Paypal logo smallPaypal terms of service


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Conclusion


These are the best crypto tax software on the market in 2021. They are:

So you really can’t go wrong with any of them.

But what do you think? Are we missing a great software on this list?

We want to know!

Hit that contact button to share your favorite cryptocurrency tax software with us.

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