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Best Crypto Tax Software: What Tax Software Is Best for Crypto?

In the crypto market, investors from around the world have discovered its potential, with many profiting from this new, digital currency.

Taxes on bitcoin profits, on the other hand, are not as straightforward as they may appear. We’ve compiled a list of the best 10 crypto tax software to help you save time and limit the risk of human mistake creeping into your crypto yearly taxes. Being forced to keep track of your cryptocurrency transactions for tax purposes can be almost worse than seeing your most promising altcoin take a rapid tumble. The IRS requires you to report every cryptocurrency transaction you make, from mining to trading. That’s a lot of information to store.

However, there is some aid available: the best crypto tax software can automate this operation for you and offer you with ready-to-file documents for your tax returns. Now that we’ve done the legwork for you, let’s have a look at which crypto tax preparation software we found.

All-around Finest Crypto Tax Software

According to Koinly

A pioneer in the field of crypto tax software, Taxbit

  • In terms of tax software, there’s no better option than Tokentax.
  • It’s the fastest crypto tax software on the market.
  • Best crypto tax for comprehensive services: Bitcoin Taxes
  • Leader in crypto tax reporting: Cointracking
  • Cryptotrader.tax: Trusted and free report preview Tax preparation software TurboTax has partnered with
  • The best crypto tax calculator on the market.
  • A one-stop shop for all of your crypto tax requirements
  • Most user-friendly crypto tax software: TurboTax

The Best Option for: Automating Tax Returns

Koinly

Fortunly’s Rating: Our editorial team assigns a rating to each product and service based on a set of evaluation criteria.

OVERVIEW

The most feature-rich bitcoin tax software on our list is Koinly. In addition to providing you with accurate information, this application offers a variety of options to help ensure that you aren’t paying more than is really necessary. Its automated data import is the first feature worth knowing about.

Best Crypto Tax Software

It is highly improbable that any transaction records would be lost as a result of the integration with so many different exchanges and wallets. A few mouse clicks are all that’s needed to keep track of every fee and balance your report and exchange information. Advanced transaction filtering is another feature it offers.

Calculating Your Cryptocurrency Taxes

CryptoTrader.Tax

Each product and service category’s assessment criteria are used to generate Fortunly’s rating, which is determined by our editorial team using the criteria.

OVERVIEW

Using CryptoTrader.Tax, you can crunch the numbers for your crypto taxes and transform them into reports you can submit to the IRS. Everything you might require will be covered by this service. In addition, the IRS 8949 form, sales records for the short and long term, crypto income reports, and foreign gain/loss reports may all be generated with ease. The tax-loss harvesting feature of this programme is a wonderful addition. The interface of CryptoTrader.Tax is user-friendly, and the data it provides is extremely accurate. In addition to integrating with TurboTax and TaxDirect, it works with over 100 crypto exchanges and the most popular wallets on the market. The calculator costs very little, and you can try it out for free.

In the Best Case Scenario

CryptoTaxCalculator

Fortunly’s Rating: Our editorial team assigns a rating to each product and service based on a set of evaluation criteria.

OVERVIEW

CryptoTaxCalculator might be a godsend if you need help computing your crypto taxes as correctly as possible. In addition to smoothly integrating with many popular exchanges, this software makes use of the data to provide incredibly detailed calculations. ICO participation, staking, mining, and airdrops are all taken into account by this tool. These will be calculated by the algorithm and tax reports will be generated for you. Your realised capital gains and earnings will be clearly stated in these documents. You may then send the information to your accountant or import it into your tax programme with ease. If you live outside the United States, we recommend CryptoTaxCalculator. Greece, Japan, Portugal and the United Kingdom are just a few of the countries that benefit from this programme.

What Taxes Apply to Cryptocurrency?

Cryptocurrency has seen a significant increase in the number of people investing in it in 2021 and 2022. The taxation of cryptocurrency varies from country to country.

Here is a basic overview of the various tax procedures for cryptocurrencies in several countries:

United States of America

In the United States, the Internal Revenue Service (IRS) treats cryptocurrencies as a piece of property rather than a form of payment. Taxes on cryptocurrencies, like taxes on gold, equities, and other assets would be similar in nature.

Paying taxes is a requirement if and only if

  • Obtain cryptocurrency that has been mined
  • Sell your crypto for cash.
  • Reward yourself with any cryptocurrency.
  • Your employer will provide you cryptographic tokens representing the money you’ve earned.
  • Tokens can be exchanged for another coin.
  • Use cryptocurrency to make payments for anything you want.
  • The IRS typically imposes a 10% to 20% tax on cryptocurrency transactions in the United States.

 The British Isles

The UK considers cryptocurrencies to be a form of capital. There are therefore 10 percent basic rate taxpayers’ taxes and 20 percent additional rate taxpayers’ taxes on cryptocurrency in the United States. In the end, the amount of tax you owe is determined by the gain, your taxable income as a whole, and any deductions you claim. To whom does the taxation apply?

You don’t have to pay taxes if you give your spouse or civil partner crypto tokens. There is also a tax-free allowance of £12,300 in the UK capital gains tax. Canada is the third country mentioned.

Tokens purchased and held in Canada are not subject to taxation. Taxes on the selling of cryptocurrencies are the primary focus of this regulation. Included in this is any profit you realise from:

Only half of it will be subject to taxation.

A Crypto Tax Software: What’s the Difference?

A difficult and time-consuming undertaking, ascertaining all of your crypto-related taxes might be. All of your crypto transactions will need to be tracked, and you’ll need to know the associated tax rates. Instead of having to deal with all of that, you can just utilise a piece of software.

Several software solutions have emerged as a result of the growing popularity of cryptocurrencies and the increasing number of people starting to trade in crypto. Consider the following factors when searching for the finest crypto tax software to assist you keep track of your taxes:

What Is the Best Tax Software for Cryptocurrency?

TokenTax, ZenLedger, Accointing and Koinly are the best options. These crypto tax preparation tools are among the best. To put it another way, the best software for crypto taxes is one that can sync your transaction data with the most exchanges and provide you with easy-to-understand profit and loss and tax reports.

Flexibility

Several other cryptocurrencies can be purchased right now. Every prominent token should be supported by a crypto tax software. It is possible to use the same programme to calculate all of your taxes regardless of the number of cryptocurrencies you own.

Best Crypto Tax Software

If user experience is important to you, switching between apps and manually tallying up the taxation on various tokens won’t do. Even if you only invest in one cryptocurrency at the moment, such adaptable tax software will allow you to switch to other tokens later without any complications of tax calculations..

Automated Data Entry

One of the main benefits of using crypto tax software is that it eliminates the need to manually enter all of your data. Among the information gathered is the dates, prices, amount of tokens, length of time you had the tokens, and so on.

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A bitcoin tax programme that can automatically import data from your wallet each time a transaction is made is therefore essential. The software should be compatible with all major cryptocurrency wallets, as well.

Reliability

Mistakes in tax computation might result in significant financial losses due to steep fines. As long as there are no errors in your tax returns, you could be charged with tax evasion. Consequently, it is critical to choose a trustworthy crypto tax software with a strong reputation.

Conveniently Constructed Documentation

Just the IRS Form 8949 is complicated enough to warrant a thorough examination. Most crypto tax software offers pre-filled documentation that can be downloaded and filed quickly by customers for their convenience.

As long as the crypto tax calculator is as accurate as possible, you should be able to depend on the pre-filled forms completely. With a competent tax software programme, you’ll have all the paperwork necessary to keep track of everything from worldwide taxes to gains and losses to your audit track.

A wide variety of functionality is to be expected in different crypto tax software. However, when trying to find the finest software to manage your crypto tax, you should search for the following features: Duplicate transactions should be detected and removed from your forms by the software. You won’t have to go through the trouble of searching for these transactions on your own.

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With a competent tax software, you’ll be able to see all of the relevant data in one spot. When it comes to dealing with taxes, a well-designed dashboard may make the process substantially easier.
It’s possible to engage a team of tax experts to double-check reports and handle other responsibilities with some of the best crypto tax software.

Pricing

As a final consideration, take into account the expense of using a certain tax management software. Varying software costs different prices depending on criteria such as the amount of integrations, bandwidth, and transactions you conduct, for example. etc.

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Even though you don’t want to spend money on pricey software,

Best Crypto Tax Software

sometimes it’s worth it to pay more for superior tax software. Cointracking ($10.99 per year) and Koinly ($1.99 per month) are two of our top picks for cryptocurrency tracking services.

Conclusion

It’s easy to get lost in the sea of choices, especially if all of them promise to provide the greatest crytpo tax filing solutions. However, if you were to follow our expert guidance, we would recommend Koinly, our top recommendation.

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