7 Top Tax Software for Cryptocurrency You Should Know in 2020
Tax authorities worldwide try to benefit from the wealth in cryptocurrency with varying degrees of success. Countries like the UK, Israel, Denmark, Switzerland, Argentina, and Bulgaria all have crypto taxation laws in different classifications. Other countries, however, allow their citizens to trade in cryptocurrency with zero taxation. These include Portugal, Germany, Singapore, Malta, and Malaysia.
While countries have made milestones in cryptocurrency taxation, understanding the process is still complicated. Some guidelines are vague or sophisticated, which frustrates crypto users who wish to file taxes. Most countries’ guidelines need to be clarified on issues of tax implications in trading, selling, and buying cryptocurrency.
Despite vague and complicated guidelines on crypto taxation, users face legal action if they fail to comply. The Internal Revenue Service in the US takes a hardline stance on tax defaulters who own or trade in cryptocurrency. To avoid ending up on the wrong side of the law, here are seven crypto taxation software you can use to file your taxes.
What is Crypto Tax Software?
Crypto tax software is a third-party data analysis platform that aggregates all your crypto transaction data. The program then compiles a report of all transactions and calculates all your gains and losses per specific tax laws. A user can purchase a yearly subscription and link the software to their wallets and crypto exchanges. Several programs perform this function, each with their own strengths and shortcomings:
Koinly was founded in 2018 by Robin Singh, a former engineer and an alumnus of the University of Manchester. The software promises to make it much easier to file your crypto taxes with several features. These features include portfolio tracking, data imports, tax reports, and troubleshooting.
Koinly has four pricing categories. The free version only includes essential features, and the Hodler package is designed for those getting started. The latter packaging costs $49 per tax year and supports 300 transactions. The software also includes a trader package for those that are more advanced in crypto trading, going for $99 per tax year, and supports 3,000 transactions. Lastly, it includes an Oracle package going for $179 per tax year, supporting up to 10,000 transactions.
The platform currently supports 73 wallets, over 6000 cryptocurrencies, 339 exchanges, and more than eight blockchains.
This platform automates the process of filing crypto taxes, which makes it easier for users. Users sign up for free and then import all their crypto transactions from all exchanges and platforms. Lastly, the user generates their tax reports with the click of a button.
Cryptotrade.tax has four major pricing packages:
- The Hobbyist package costs $49 with up to 100 trades per tax season
- Day Trader at $99 per tax year 1,500 trades
- High Volume trader with up to 5,000 trades at $199 per tax season
- Unlimited package with unlimited trades at $299 per tax season
Suitable for both traders and companies, Accointing is a friendly tax platform that ensures taxes are filed according to regulations. With simple parameter settings and importing of their transaction data, users can get their tax reports ready for submission. The portfolio feature allows users to track the growth of their assets. The software also provides market trends, price alerts, and short and long term investment overviews are also available.
There are three payment plans:
- Starter Tax Solution is priced at $50, supporting up to 250 transactions.
- The Advanced Tax Solution supports up to 5,000 transactions at $130 per year
- The Professional Tax Solution is priced at $260 per year and supports unlimited transactions.
Some of the main features of Cointracking include personal portfolio analysis, transaction imports, customer support, and adequate security. It supports over 70 exchanges and is adjustable to different taxing parameters. It also verifies the transaction records to correct any duplicates and missing ones.
There are four pricing packages on this platform:
- The free package supports up to 200 transactions and limited features.
- The pro plan costs $10 a month and supports up to 3,500 transactions and standard software features.
- The expert plan supports up to 20,000 and costs $15.49 per month.
- The unlimited plan is priced at $50 and offers unlimited transactions and all software features.
This platform represents one of the relatively cheaper options for crypto tax reporting and computing. It is suitable for traders, tax professionals, businesses, and investors. Its more robust features include speedy service and customer satisfaction, along with uploading transaction data for analysis. Bitcoin tax also connects users with professional accountants in case there is a need for extra help. It also supports various countries making it adjustable to specific parameters.
If you want to sign up, you can choose from four pricing packages. The free package supports up to 200 transactions. The premium plan supports up to 1,000 transactions at $39.95 per tax year. Additionally, the extra premium plan is priced at $49.95 per tax year and supports up to 5,000 transactions, while the deluxe program supports up to 10,000 transactions at $59.95 per tax year.
It is automated, precise, and efficient. Blox boasts of great features such as auto-tracking and syncing of transaction data and CPA financial tools. Besides, it has a real-time dashboard to review portfolios, transaction control, and bookkeeping as well as security for customers. It serves crypto companies, executives, accounting firms, asset managers, among others.
Blox has three major pricing plans. The business plan offers 24-hour customer service and up to $20 million in assets under management. The second plan is Enterprise supporting up to $60 million assets. The third is a custom plan that supports unlimited assets and customized software features.
This is a popular platform created by certified public accountants and tax lawyers, making it convenient to use. It allows for full audits and optimized taxes to thousands of users. It supports over 4,200 digital currencies, equities, and commodities. It also ensures proper regulation according to tax laws and provides portfolio analysis.
Taxbit offers three payment plans:
- A basic plan priced at $50 per year supporting up to 250 transactions
- A plus plan supporting up to 2,500 transactions and is priced at $175 per tax year
- A pro plan priced at $500 a year and supports up to 25,000 transactions and unlimited exchanges.
How to Choose the Best Crypto Tax Software
Like many other products, you need to be careful when choosing a crypto tax software. If you don’t know what to be on the lookout for, here are some of the things you need to consider
- Legitimacy and Credibility
Ensure that the software you choose follows tax laws and regulations to avoid penalties. Conduct your due diligence, especially on the team behind the software, to determine whether they have the experience required for crypto taxation.
Check the pricing of each software before you pick one, and make sure it is worth the price you’ll pay. Take advantage of those that allow free accounts if you meet the criteria. If you have high volumes of transactions, be prepared to pay more for efficient tracking and tax reporting.
- Integration and Bandwidth
Choose a software with a format that works for you. Some of the programs may require you to edit transaction history to comply. Bandwidth is essential since high volume transactions may cause a system to crash because it cannot handle it.
Most of the software mentioned above have similar features, pricing plans, and services, but picking one may be daunting. For companies and firms, unlimited plans may be the way to go, given the number of transactions they conduct annually. Individuals may settle for cheaper schemes that fit their number of transactions to avoid wasting money. Additionally, one needs to make sure that the software they pick follows local regulations depending on where they are. It is essential to check reviews by other users to determine which platform to use. Anyone trading or owning cryptocurrency and assets should use tax software to prevent legal consequences and ease the process.