There are two certainties in life…
Death and Taxes. And, when it comes to the latter, it’s a certainty that appears to be coming to a head. Global tax agencies can see exactly how much money is being made in crypto and their eyes are opening.
That therefore means that you need to be ready to file those crypto taxes.
I know this fills many of us with dread. Not because we don’t want to declare those taxes, but because the rigmarole required to do so correctly is oppressive.
Just the thought of all those trades that were made last year. How do you make sure you are capturing and reporting it correctly? Or what about your DeFi / NFT activities? How do you account for that?!
Sure, you can say that you just want to outsource it to an accountant. But these are expensive and currently in high demand. Moreover, you still need to be able to send them all the financial records.
That is why it is essential that you make use of crypto tax tools. Software and solutions that can help ease the burden of that collection process. Products that have developed an end-to-end tax reporting solution that will allow you to connect to all your accounts and prepopulate tax reporting forms.
In my video today, I am going to take you through 5 of my top crypto tax tools. I will be comparing them side-by-side and analysing their main pros and cons.
Some of them are developed specifically for Americans whereas others have global reporting standards in mind.
So, if you are due to do your taxes and are looking for a helping hand, then this video is a must watch!
⛓️ 🔗 Useful Links 🔗 ⛓️
► CryptoTrader.Tax integrations: https://cryptotrader.tax/integrations
► CryptoTrader.Tax accountants: https://cryptotrader.tax/crypto-tax-a…
► Accointing integrations: https://www.accointing.com/en-GB/inte…
► Bear.Tax integrations: https://bear.tax/exchanges.html
► TokenTax integrations: https://tokentax.co/integrations/
► Koinly supported countries: https://help.koinly.io/en/articles/36…
► Koinly integrations: https://koinly.io/integrations/
🤔 Why Use A Tax Tool? 🤔
Once you have made those mad crypto gains, you have two options.
1. Stash that crypto away and pretend those gains never happened.
2. Run the numbers and work how much tax you owe.
Those that want to legally pay their taxes and enjoy those gains are probably going to want to get that done in the easiest way possible. However, it can be hard to find a crypto accountant and they can be super expensive. Sure 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.
5️⃣ CryptoTrader.Tax 5️⃣
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, major DeFI platforms and most crypto exchanges. Once all that data is imported, the tool will then automatically work out the cost basis of your trades 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 too. 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.
4️⃣ Accointing 4️⃣
Accointing helps you track that portfolio and file those crypto taxes too. It works very similar to CryptoTrader.Tax but it has even more integrations – sitting at 300+. Data imports here are done by CSV uploads, API connections and just providing your public address. Another neat thing is that when you import those transactions, their classifications are heavily automated. As Accointing takes into account all the strange tax rules in US, Australia, the UK, Germany, Switzerland and Austria, it makes filing taxes in those countries simple.
3️⃣ Bear.Tax 3️⃣
This tax solution generrates 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 that I go through in detail in the vid!
2️⃣ Tokentax.co 2️⃣
This is a similar tax tool to the others I have mentioned. 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.
1️⃣ Koinly 1️⃣
Koinly generates tax reports for over 20 countries and also 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! Watch my vid where I tell you why I think this is the best crypto tax tool out there!
📜 Disclaimer 📜
The information contained herein is for informational purposes only. Nothing herein shall be construed to be financial, legal or tax advice. The content of this video is solely the opinions of the speaker who is not a licensed financial advisor or registered investment advisor. Trading cryptocurrencies poses considerable risk of loss. The speaker does not guarantee any particular outcome.