It takes more brains and effort to make out the income tax form than to make the income sage words. That’s why there are a lot of crypto tax tools out there for people to choose from.
But there is a list of top five crypto tax tools to make things simpler that Crypto Bureau has highlighted in the latest video, giving traders the best choice to do this laborious work.
Why Use A Tax Tool?
Once you have made those mad crypto gains, you have two options.
- Stash that crypto away and pretend those gains never happened.
- Run the numbers and work how much tax you owe.
Those who want to pay their taxes and enjoy those gains legally will probably want to get that done in the easiest way possible. However, it can be hard to find a crypto accountant, which can be super expensive.
You could spend weeks with a load of spreadsheets, or you could use a crypto tax tool to save you a lot of time and stress.
CryptoTrader.Tax
This tool is mainly geared towards US residents and is trusted by over 100,000 traders for filing their taxes. Data imports are made a breeze with integrations with major wallets, DeFi platforms, and most crypto exchanges.
Once all that data is imported, the tool will automatically work out your trades’ cost basis by using historical price data. You’ll then get your tax reports within seconds!
Those based in the US will probably be relieved to know that the tool also spits out a TurboTax direct import. So you can upload that to TurboTax, and you are done!
Next, you have tax-loss harvesting reports, which are super useful for planning future trades and potentially reducing that capital gains tax bill.
Some people may want to get that automated tax report checked out by a proper accountant and CryptoTrader.Tax offers you that option too.
CryptoTrader.Tax will automatically work out the cost basis and fiat value for each transaction by leveraging historical price data once those crypto wallets defy and exchange transactions are imported.
Accointing
Tax but it has even more integrations – sitting at more than 300 transactions. Accointing helps you track that portfolio and file those crypto taxes too. It works very similarly to CryptoTrader.transactions
Data imports here are done by CSV uploads, API connections and just providing your public address. Another neat thing is that their classifications are heavily automated when you import those transactions.
As Accointing considers all the strange tax rules in the US, Australia, the UK, Germany, Switzerland, and Austria, it makes filing taxes in those countries simple.
There are three key methods to import those all important transactions. These would be via CSV uploads, using direct connections like API integrations or just providing your public wallet address.
You can use Accointing for free if you’ve made fewer than 25 trades in a year. It’s super easy to use, and the dashboard looks amazing.
Bear.Tax
This tax solution generates reports on the FIFO and LIFO methodologies – which turn out to be widely used accounting methods.
Data is imported using CSV and APIs, with over 50 exchanges supported. On top of that, Bear.Tax has a bunch of unique features.
Those tax reports follow country-specific rules. Bear.Tax has its solution for the USA, Canada, Australia, and India. You need to select your country when signing up, and if you live in any of the places mentioned, then all tax rules for that country will be automatically assigned to your account, and that report you need will be created.
You can report gifts staking rewards, airdrops, hard forks, referral fees, mining gains, voting rewards, and more. Another unique feature is Bear.Tax’s smart matching algorithms these help match transfers done across exchanges, regardless of fees, and block time delays.
This is a convoluted way of saying that this solution will help you avoid many taxable events that never existed.
Tokentax.co
This is a similar tax tool to the others. However, it supports a plethora of different DeFi platforms’ major wallets and is the only tool I have found that will do those tax reports for NFTs.
You will also get access to DeFi, and NFT integrations can import data from every exchange and more.
TokenTax is best suited to those who trade NFTs, live in an exotic country, or want to take advantage of that VIP package.
Koinly
Koinly generates tax reports for over 20 countries and any country that uses FIFO, LIFO, highest cost, lowest cost, average cost basis, or shared pool accountancy methods. So yep, that’s most of the world.
They don’t mainly focus on the US alone you have support for Canada, Australia, New Zealand, Brazil, most of Europe, and Asian countries like Japan, South Korea, and Singapore. Any country that uses FIFO, LIFO, highest, lowest, or average cost, basis, or shared pool accountancy methods are also supported.
This is a super useful analysis tool that allows you to view the ROI on each crypto investment. There is no hiding from your losers while making it very clear where you actually made some pretty smart moves.
Koinly’s smart transfer matching can use AI to detect transfers between your wallets and exclude them from tax reports. You also have the option to use your wallet’s public address to collect all of your transactions on-chain. You can also import that data via API.
Koinly does not support NFTs trades, but pretty much everything else is. It supports over 1700 cryptos has six years of historical price data to draw. Upon 50 blockchains are supported, 350 exchanges, 50 wallets, and many other services.
You can import all that data and check out your capital gains taxes for free. It also skips duplicate transactions, which is a big potential time saver.
Sign up for a Binance account here (Discount 10% trading fees): https://accounts.binance.com/en/register?ref=29171587
Read more:
- How to Invest $5,000 In Crypto For 2022 With High And Low-Risk Strategies
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