Everybody hates doing their taxes and working out Crypto Tax is no different. Additionally, we are used to buying and selling cryptocurrencies effortlessly, without considering tax liabilities, since not too long ago, it wasn’t being taxed anywhere. That's changed however, as around the world, Tax Authorities are dishing out forms, rules and guidelines on grabbing a slice of your cryptocurrency income as Crypto Tax.
TheCrypto Tax rate varies across countries and sometimes, even within states. But generally, the length of time you hold a cryptocurrency asset affects how it will be taxed at point of trade or sale. Say, if you hold cryptocurrency for a year or less, it’s called a short-term sale else it’s a long-term sale. In the U.S. and many other countries, long-term gains are taxed at a lower tax rate, making them lucrative for investors.
It all depends on taxable earnings accrued trading, buying or selling cryptocurrencies. Now, to calculate the profit or loss per year, you need to list all purchases and sales. You then state this profit or loss in the income tax return so that the tax office can calculate how many taxes on cryptocurrencies you have to pay.
Although this sounds simple, is it really?
This is where the crypto tax tools come into the picture!
A Crypto Tax Calculator assists in you paying as little tax as possible on your crypto earnings. It is essentially a software for tracking the purchases and sales of cryptocurrencies on crypto exchanges so as to document and calculate these for the purpose of income tax return.
The crypto tax calculator works when connected with the crypto exchanges on which you trade (Binance, Coinbase, Kraken, KuCoin, Bitpanda, eToro etc.) or with your wallets.
This connectivity can be seamless either via an API interface or through manual action such as by importing a csv file into the Crypto Tax Calculator software. Most crypto taxsoftware vendors of crypto tax tools offer different subscription rates or pricing plans depending on the number of transactions it is expected to handle. But, it's definitely worth it considering its use can save you a lot of money in taxes, the headache of having to deal with crypto tax calculations and the fear of penalties.
Accointing is a swiss company offering a twin combo of crypto portfolio tracker and a crypto tax calculator tool. Their integrated crypto tax calculator tool can calculate tax reports as per cryptocurrency tax regimes in Germany, Switzerland, Austria, the USA and Great Britain. The Accointing crypto tax calculator tool can be used free of charge and fairly easy to use without any previous tax knowledge. However, the tax report preparation is subject to a fee.
If your portfolio management looks good, then the potential is generally in tax optimization. In addition, Accointing offers different inventory methods, strategies and tax tips for each wallet.
|Free||$0||Upto 25 / Yr|
|Hubbyist||$79||Upto 500 / Yr|
|Trader||$199||Upto 5000 / Yr|
|Pro||$299||Upto 50000 / Yr|
CoinTrackinghas been around since 2013 as the world's first crypto tax report generation platform. With more than 800,000 active users, CoinTracking is a market leader in tax payments on cryptocurrencies.
CoinTracking, essentially keeps track of all cryptocurrency coins in your portfolio. It then documents all trades in crypto currencies automatically (you can also add entries manually). Its inbuilt crypto tax calculator then displays clearly and quickly your portfolio values and crypto tax liability, applicable across all exchanges and wallets.
CoinTracking can be connected seamlessly for real time automatic crypto tax accounting through APIs supported across major exchanges and wallets. Additionally, it also supports csv import of trading data if required.The Cointacking App provides access to portfolio and crypto tax accounting on the go. In addition, the smart app notifies users of important price fluctuations and alarms via push messaging.
|Free||$0||Upto 200 / Yr|
|Pro||$132||Upto 3500 / Yr|
|Expert||$204||Upto 20000 / Yr|
Koinly is an easy to use Crypto Tax Calculator platform for cryptocurrencies that takes into account your personal cryptocurrency loans and mining strategy. Its API can quickly connect to all your accounts on major exchanges and also allows you to import the wallets. Especially, If you are trading futures or margin, Koinly calculates your crypto tax and helps you easily lower them for the current year. Koinly can currently be used in more than 20 countries for crypto tax report generations.
|Free (Limited Features)||$0||Upto 10000 / Yr|
|Newbie||$49||Upto 100 / Yr|
|Expert||$99||Upto 1000 / Yr|
CoinTracker, is a US based crypto tax calculator platform founded in 2017 that supports many wallets and exchanges for easy to do tax reporting. CoinTracker supports futures and margin trading and has partnered with TurboTax and Coinbase accurate and seamless crypto tax report generation.
|Free||$0||Upto 25 / Yr|
|Hobbyist||$59||Upto 100 / Yr|
|Premium||$199||Upto 1000 / Yr|
TokenTax, founded in 2017 is a platform for crypto tax calculation,analysis and evaluation of your crypto portfolio. It creates a crypto tax report through mainly imported CSV files, although some exchanges (Just added Uniswap) are supported for automatic API based import of the transaction data.
TokenTax compares the trading information of your portfolio across different exchanges and can create reports for the tax return, which are used for filing. In addition, it also includes a function for registering tax losses so that the profits are offset for lower tax liabilities.
The dashboard of TokenTax shows possible tax losses and it shows which values of your assets are currently held with a loss by you. Also, how many losses you can claim for your sale, appears here. Such losses can be subtracted from profits to reduce the tax liability.
|Basic||$65||Upto 500 / Yr|
|Premium||$199||Upto 5000 / Yr|
|Pro||$799||Upto 20000 / Yr|
|VIP||$3500||Upto 30000 / Yr|
In summary, doing crypto tax is not as easy as trading cryptocurrencies. However, with the right tools as stated above it can be easily accomplished with least investment in time and most savings in taxes. All crypto tax calculator tools have their advantages and disadvantages. However, considering features such as: a) transaction count allowed per year b) exchange / wallet connectivity as per your portfolio and c) cost per year, you can easily narrow down to a crypto tax tool that best suits your requirements. There’s no such thing as one size fits all and always be sure to read the fine print when signing up for any crypto tax service.
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