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The Best Crypto Tax Softwares Reviewed

This article contains a review of the top 6 best crypto tax software for 2021. We will also cover why you need a tax software, how to choose the right software and some frequently asked questions.

best choice

Koinly logo
  • Available in 20+ countries
  • Tax report in under 20 minutes
  • Easily import your trades

BEST FOR BEGINNERS

CryptoTrader Tax logo
  • Official TurboTax partner
  • International tax reporting
  • Over 100,000+ customers

BEST FREE SOFTWARE

Coinpanda logo
  • 350+ exchanges and wallets
  • Support for 65+ countries
  • Reduce your taxes
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Tax season typically feels daunting for everyone. For crypto traders, it's twice as hectic, since they also have to file their crypto returns. 

The IRS considers crypto holdings property. Thus, you will have more reports to file than what you cashed out. Fortunately, with the crypto software into the fold, all your stress is reduced.

Having the best crypto software makes it easier to track, manage and calculate transactions for tax purposes. However, with the wide array of cryptocurrency tax software, which one do you go for? 

To conclude at the right answer, you must consider cost, integration capability, and credibility. Here are the best crypto software in the market today.

The Best Crypto Software for 2021

Comparison of the Top Crypto Softwares

#1
Koinly logo

Our Partner

Koinly automatically imports your transactions, finds all the market prices at the time of your trades, matches transfers between your own wallets, calculates your crypto taxes.

#2

The simplest and most reliable tax software and tax calculator. Get tax reports in minutes. Support for all exchanges. Instant tax forms. Calculate taxes in 20 minutes.

#3
Coinpanda logo

Our Partner

Coinpanda is a cryptocurrency tax calculator built to simplify and automate the process of calculating your taxes and filing your tax reports.

#4

CoinTracker is the most trusted Bitcoin Tax Software and Crypto Portfolio Manager. Automatically connect Coinbase, Binance, and all other exchanges.

#5
TokenTax logo

Our Partner

TokenTax is the only cryptocurrency tax calculator that connects to every crypto exchange.

#6
ZenLedger logo

Our Partner

ZenLedger is one of the best crypto tax software. It supports 400+ exchanges like Coinbase and Binance, tracks your gains, and automatically creates your tax forms.

A Detailed List of the Best Crypto Tax Softwares

There are dozens of crypto tax softwares out there, so as you search for a crypto tax software, you may feel overwhelmed. 

Don’t worry; we’re here to help! Here are the best crypto tax softwares available to help you file your taxes.

1. Koinly - Best Overall

Koinly tops the list of the best crypto tax software for a good reason. This is the safest crypto tax software among the users. Koinly can create the most accurate crypto tax reports for you.

It integrates seamlessly with major crypto exchanges such as Coinbase, Kraken, and Binance

Despite being around for only three years, it has become a favorite for investors, accountants, and hobbyists. Koinly reduces the workload to a 20-minute process. Import your trades easily, Add your exchange accounts via API or CSV files, and use public addresses to connect your blockchain wallets.

It integrates with significant blockchains making the process of declaring returns from multiple accounts straightforward. Koinly generates a filled IRS tax form (Form 8949) for US-based citizens. 

Here are Koinly's pros and cons.

Pros

  • It is available in more than 20 countries.
  • Supports more than 6,000 cryptocurrencies and over 350 exchanges.
  • Users can choose from different tiers depending on their budget.
  • There is a free version for beginners.

Cons

  • The free version is too limited
  • Does not accept Bitcoin or any other crypto as payment for services.

2. CryptoTrader.Tax - Best for Beginners

CryptoTrader.Tax is a credible choice for people looking for a cheaper alternative. 

CryptoTrader supports most cryptocurrencies and works with all major exchanges, just like Koinly. It will take away your pain to prepare your bitcoin and crypto taxes in a few easy steps.

However, CryptoTrader primarily focuses on making the process as easy as possible. The whole process is distilled into three simple steps. 

It has a simple interface that makes it easy to import your trade to ensure that you're not overpaying on your taxes. Users can also upload their completed tax reports directly into TurboTax for easy tax filing.

CryptoTrader.Tax also helps you earn more. A tool such as tax-loss harvesting helps cut down on your tax bill where possible. The platform's integration with TurboTax means beginners do not have to change the tax reporting format.

Pros

  • Filing is simplified into three simple steps.
  • Tax-loss harvesting helps you reduce your taxes.
  • Offers a 100% money-back guarantee.
  • There is a free version you can try out before paying.

Cons

  • The tax software majorly focuses on US-based clients.
  • Users earning in DeFi will find several limitations.

3. Coinpanda - Best Free Software

Filing your taxes takes time and resources. This is why the best crypto tax software charges a fee for this service. 

Unfortunately, most free versions are minimal. Coinpanda offers the best free version in the market. Although there are higher paid tiers, the free version is resourceful.

The software is available in over 65 countries and supports over 350 exchanges and wallets. Attractive features include capital gains tax report, free portfolio preview, and margin trading. The only limit with the free version is the number of transactions. 

Here some pros and cons with the version:

Pros

  • The free version has most of the features.
  • It supports most exchanges and wallets
  • Available in over 65 countries.
  • Supports most types of tax reports.

Cons

  • Transaction limits of each plan are lower than the competition.
  • The free version has a low transaction limit of 25.

4. CoinTracker - Most User-Friendly

CoinTracker has been around since August 2017. Today, it is recognized as one of the best crypto tax software. This California-based web application specializes in blockchain, accounting, and cryptocurrencies. 

However, its best quality is the user-friendly interface.

Coin Tracker has a clean-cut dashboard that displays everything you may need. Other redeeming features include Tax form generation, wallet synchronization, and multiple cost basis methods.

It is no surprise more than 350,000 users flock to the platform. 

Pros

  • Simple interface that anyone can use.
  • The platform can be integrated with over 300 wallets and exchanges.
  • Supports more than 8,000 cryptocurrencies, enough to cover your entire portfolio.
  • Generates reports using twelve different methods.

Cons

  • Full support is limited to the U.S, UK, Canada, and Australia.
  • It doesn't support margin trading.

5. TokenTax - Best for DeFi Accounting

TokenTax has everything you would want in the best crypto tax software. 

The platform supports all major cryptocurrencies. You can import data from all the major exchanges and generate a report in minutes.  International tax calculations are easier in TokenTax for it's crypto software app integrations that integrate all exchanges.

You can track your capital losses, capital gains, and tax liability for every virtual currency transaction. Other useful features are margin trading and tax loss harvesting tool.

With these features, you always pay the lowest possible taxes. However, what makes TokenTax shine is DeFI accounting functionality. The use of smart contracts in DeFI opens other avenues of income, such as lending at interest. 

Here is what we like and what could be better.

Pros

  • Better calculation of tax liabilities that save users money.
  • Offers specialized services such as margin trading and DeFI accounting.
  • Automated creation of downloadable forms.
  • Offers unlimited tax return amendments.

Cons

  • The API integrations are still limited compared to competitors.
  • You need VIP membership to deal with crypto exchange closures.

6. ZenLedger - Best for Tax Professionals

ZenLedger was made with Tax professionals in mind. The platform handles tax issues for users operating in DeFI space with ease. 

Due to the complexity of DeFI tax obligations, ZenLedger has responsive customer service available throughout. The platform also offers features of the best crypto software, such as integration. ZenLedger works with all the major exchanges and crypto-wallets. 

The platform also produces profits and loss accounts for statements for you or your CPA. ZenLedger can also introduce the user to tax professionals.

Pros

  • Premium 24/7 support for all users regardless of plan.
  • Works with all major exchanges and crypto wallets.
  • Easily integrates with TurboTax.

Cons

  • Localized tax support is limited to the U.S users.
  • Only high-end users get DeFI support.

How to Choose the Best Crypto Software?

Most crypto tax software looks the same at face value. However, when you dig deeper, you discover glaring differences. The key is identifying the best crypto software. 

Here are some factors to consider when choosing the best crypto tax software.

Integration

There are two main types of integration are Application Programming Interfaces (API) and Comma Separated Values (CSV). 

The integration allows you to import wallet and exchange data into the tax platform, and API integration is the best for the seamless import of data. 

Pricing

Cost is always a factor when buying any product. Most crypto tax software is priced in different tiers. 

The difference between free and premium plans is usually the number of transactions. It is always worth investing a little more for better integration and bandwidth.

Credibility

The tax software space is still relatively new. It can be hard to tell a legitimate platform from a scam. 

Check if the team behind the platform has met all the tax compliance regulations. It is the only way to ensure you are dealing with the best crypto software.

Why Do You Need Crypto Tax Software?

Most people struggle to understand cryptocurrency. Well, if you think trading crypto is tough, try filing your crypto tax manually. The best crypto tax software reduces this pain-staking process into a few simple steps. 

The programs track all your transactions and automatically populate the tax forms for you.

FAQ's

Finding the best tax software is only the first step. Other issues will arise day-to-day. Here are some frequently asked questions that can help you out.

What is Cryptocurrency accounting software?

Cryptocurrency accounting software is a program that tracks your crypto transactions on different exchanges. 

After importing the data, the software organizes the data and calculates capital gains and losses for tax purposes. Lastly, the software generates tax documents that you can download.

Are Crypto to Crypto Trades Taxed?

The IRS breaks each trade into two events. Selling your cryptocurrency creates the first taxable event. Since crypto counts as property, any sale of a property is taxable. 

Likewise, the direct exchange of crypto for crypto is taxable unless a specific exception under Section 1031 of the tax code.
How Does Cryptocurrency Taxes Work?

Cryptocurrency taxation follows the same structure as stocks. You have no tax obligations when you first acquire the crypto. 

You are free to hold it for as long as you want, and you would not be taxed. However, the moment you sell your crypto, you must pay capital gains or claim a capital loss. The same rules apply when you use your crypto to make a purchase.

Do I Still Pay Taxes if I Only Made Losses on My Cryptocurrency?

Unfortunately, the IRS requires you to report your crypto losses and gains. Reporting a loss is actually in your best interest. It allows you to offset future gains and reduce your tax bill.

Failure to report your capital losses opens you up to all sorts of problems with the IRS.

Do I Have to Pay Tax if I Transfer Crypto from Wallet to Wallet?

Generally, the IRS does not tax users for acquiring crypto. As long the crypto remains in that wallet, there are no tax obligations. 

You are also not required to pay tax while transferring crypto from one wallet to another owned by the same person. However, you pay tax when the wallets have different owners.

Can I Pay My Taxes in the Coins I Hold?

Simply answered, No. The IRS only accepts American dollars as payment for taxes. 

You cannot pay taxes on the coins in your account. If you have limited cash, you may have to sell a portion of your crypto holdings to settle your tax bill. You can also consider paying using a credit card.

What is FIFO vs. LIFO?

First In, First Out (FIFO), and Last In, First Out (LIFO) are different inventory systems. 

FIFO focuses on utilizing the first product first, while LIFO assumes that the last product in the inventory is sold first. Using the FIFO approach gives the most tax benefits.

Won't Exchanges, like Coinbase, Generate My Tax Documents for Me?

The best you can hope for is a detailed report of all your transactions. No exchange will prepare the tax forms for you. You will still need to hire a professional for that.

Some exchanges don't even provide adequate reports. Either way, you will need to draft the IRS documents for filing.

What is Cryptocurrency accounting software?

Cryptocurrency accounting software is a program that tracks your crypto transactions on different exchanges. After importing the data, the software organizes the data and calculates capital gains and losses for tax purposes. Lastly, the software generates tax documents that you can download.

Are Crypto to Crypto Trades Taxed?

The IRS breaks each trade into two events. Selling your cryptocurrency creates the first taxable event. Since crypto counts as property, any sale of a property is taxable. Likewise, the direct exchange of crypto for crypto is taxable unless a specific exception under Section 1031 of the tax code.

How Does Cryptocurrency Taxes Work?

Cryptocurrency taxation follows the same structure as stocks. You have no tax obligations when you first acquire the crypto. You are free to hold it for as long as you want, and you would not be taxed. However, the moment you sell your crypto, you must pay capital gains or claim a capital loss. The same rules apply when you use your crypto to make a purchase.

Do I Still Pay Taxes if I Only Made Losses on My Cryptocurrency?

Unfortunately, the IRS requires you to report your crypto losses and gains. Reporting a loss is actually in your best interest. It allows you to offset future gains and reduce your tax bill. Failure to report your capital losses opens you up to all sorts of problems with the IRS.

Do I Have to Pay Tax if I Transfer Crypto from Wallet to Wallet?

Generally, the IRS does not tax users for acquiring crypto. As long the crypto remains in that wallet, there are no tax obligations. You are also not required to pay tax while transferring crypto from one wallet to another owned by the same person. However, you pay tax when the wallets have different owners.

Can I Pay My Taxes in the Coins I Hold?

Simply answered, No. The IRS only accepts American dollars as payment for taxes. You cannot pay taxes on the coins in your account. If you have limited cash, you may have to sell a portion of your crypto holdings to settle your tax bill. You can also consider paying using a credit card.

What is FIFO vs. LIFO?

First In, First Out (FIFO), and Last In, First Out (LIFO) are different inventory systems. FIFO focuses on utilizing the first product first, while LIFO assumes that the last product in the inventory is sold first. Using the FIFO approach gives the most tax benefits.

Won't Exchanges, like Coinbase, Generate My Tax Documents for Me?

The best you can hope for is a detailed report of all your transactions. No exchange will prepare the tax forms for you. You will still need to hire a professional for that. Some exchanges don't even provide adequate reports. Either way, you will need to draft the IRS documents for filing.

Final Thoughts

Hopefully, this article helps you find the best crypto software. A mistake could open you up to a tax audit, penalties, or even legal action. For this reason, you must find credible software to reduce the workload.

The alternative is hiring a CPA who specializes in crypto.

Koinly

Koinly automatically imports your transactions, finds all the market prices at the time of your trades, matches transfers between your own wallets, calculates your crypto taxes.

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