One of the biggest hindrances whilst trading in cryptocurrencies is calculating taxes around the investments and returns. Cryptocurrency tax rules vary across countries and several countries have a lack of clarity surrounding the prevailing tax rules, thus leading to further confusion amongst cryptocurrency traders.
No matter what kind of cryptocurrency trader you are, right from an enthusiast with a few hundred dollars in Bitcoin, right up to a seasoned cryptocurrency day trader, these 5 cryptocurrency tax tracking tools would help simplify your cryptocurrency taxes and help you stay on the right side of the law.
As one of the most popular cryptocurrency tax tracking software, Koinly is the first software on this list. Headquartered in London, it has a sleek and intuitive UI and is perfectly suited for both regular traders and for amateur blockchain enthusiasts holding relatively smaller amounts of cryptocurrencies. Another pro is that a new user can start using Koinly for free and only pay when final reports are required to be generated, similar to conventional income tax softwares like Sprintax. Additionally, it also officially supports the tax systems of over 100 countries, 33 exchanges, and 6 blockchains (Example: BTC, BCH, LTC).
It also has several other useful features including a Portfolio Tracker along with its primary feature of the Tax Calculator. Koinly seems to have an upper edge over several other crypto tax softwares as they have developed their tax reports in partnership with audit consultants from KPMG and hence, are legally rigorously compliant. Their reports also support all the major accounting methods including the ACB (Average Cost Basis) and the FIFO (First in First out) method.
CoinTracking analyzes your trades and generates real-time reports on profit and loss, the value of your coins, realized and unrealized gains, reports for taxes and much more. With the prices for over 7,000 coins and assets, Cointracking promises to be an all-in-one tool for your cryptocurrency tax and portfolio tracking needs. It is also compatible with third-party tax softwares like TurboTax depending on the country you are based in.
Bitcoin.Tax is one of the oldest cryptocurrency portfolio and tax-tracking software amongst its competitors and is a very trusted software amongst long-time crypto investors and enthusiasts. However, its UX design and interface definitely feels dated compared to some of its competitors including Koinly and Cointracking. Similar to Cointracking, Bitcoin.Tax has also integrated and partnered with TurboTax to support the seamless importing of cryptocurrency tax data into one’s mainstream income tax reports too. Upon initial use, Bitcoin.Tax seems to be tailored to old-school accountants and older user segments, with their interface not being very clean and using a lot of text throughout. Depending on one’s needs, Bitcoin.Tax may fit your bill if you are looking for a more traditional cryptocurrency accounting and tax tracking software. They also support trade imports from most of the major exchanges including Coinbase, Gemini, Kraken, Bitfinex, etc, and support several currencies and tax reporting methods.
Like the other tools mentioned here, Cointracker aims to be a unified interface for cryptocurrency users to calculate their cryptocurrency taxes and track their portfolios. Cointracker has several useful features including a performance tracker that visualizes one’s portfolio performance over a specified time-scale, thus proving to be a seamlessly handy portfolio tracking software too. Cointracker also supports all the major accounting methods and their forms can be exported to third-party softwares like TurboTax and TaxAct, along with directly generated forms like the IRS Form 8949 (USA). For first time users who trade cryptocurrencies through Coinbase, Cointracker also enables logging in directly through one’s Coinbase account, thus reducing barriers to entry for such investors. Cointracker also has an IOS & Android app for mobile users.
BearTax is the last major cryptocurrency tax tracking tool on this list and upon the first impression, is very reminiscent of Coinbase in its simple UI and design language. Their key selling points seem to be around the diversity of features, pricing options, and functionality that they offer, with pricing options available tailored from the basic cryptocurrency enthusiast to experienced cryptocurrency swing traders who would need to process several thousand transactions. Like all the other cryptocurrency tax tracking softwares mentioned here, BearTax also supports all the major exchanges and cryptocurrencies. However, BearTax could definitely benefit from a few more intuitive features like a performance tracker, but their product team has tried to stay on top of their game by promising such updates in the near future.
As blockchain technology and cryptocurrencies become more mainstream, several new cryptocurrency tax tracking softwares are coming up. However, in order to make effective use of such software, it is important to understand the basics of crypto taxes. As with any other software, always conduct your own research and evaluate them based on your requirements before selecting a specific cryptocurrency tax tracking software.
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