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Crypto Softwares | Crypto Taxes

The Best Crypto Tax Software this 2024

Author

Jay Solano

Tags

Tags 2024 / Editor's Choice / Slider Posts

Reading time

5 mins
Last update

Author

Jay Solano

Tags

2024 / Editor's Choice / Slider Posts

Category

Crypto Softwares / Crypto Taxes

Reading time

5 mins
Last update

Author

Jay Solano

Tags

2024, Editor's Choice, Slider Posts

Reading time

5 mins
Last update


crypto tax software 2024

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Every single year, it has been a massive pain to do crypto taxes as it feels like all crypto tax software is built for users who primarily use Coinbase or Binance or people who just do simple transactions. Even if you are based in the UK, Canada, the US or Australia, everyone looks for the best cryptocurrency tax software when their crypto filings are due. Let’s have a look at the best crypto tax platforms and the best way to report taxes on crypto.

For the most part, most users exclusively transact on-chain, utilize different wallets, use multiple blockchains, and do a lot of complex transactions, making it extremely difficult for them to find reliable tax software that works.

In this article, we will share some of the best crypto tax software that will save you a ton of time and headaches.

Importance Of Filing Your Crypto Taxes Correctly

Nothing out there can probably get you in more trouble in the crypto space than doing your taxes wrong… or not doing them at all.

As long as you are making your best effort, chances are you will not get in trouble, but you have to be careful when you file your crypto taxes because they are very complicated. So, the way most people get around this is by using third-party software.

Short-term and Long-Term Capital Gains

Even though most users will utilize crypto tax software this tax season, we need to understand how most of our transactions are being processed.

(Disclaimer: This information is intended for general knowledge and should not be considered as tax advice. Always consult with a qualified tax professional for personalized advice and insights about your specific situation.)

The first thing is, that you are only going to be taxed based on your profits. For example, if you bought 1 Bitcoin at $10,000, and sold it for $60,000, then you made a $50,000 profit. You are not going to get taxed on the full $60,000 because the first $10,000 was your principal to buy BTC.

Second, it will also depend on whether you are dealing with a short-term capital gain or a long-term capital gain. Here’s a breakdown of the holding period:

  • Short-term: Assets bought and sold for less than 1 year are taxed at your ordinary income tax rate. This means they are treated just like your regular income.
  • Long-term: Assets bought and sold for more than 1 year benefit from lower and more favorable rates.

In terms of tax rates, the only difference is that there is going to be a tax difference between short-term capital gains and long-term capital gains. You are incentivized with lower taxes to have a long-term capital gain. However, this does not necessarily mean that you should always go for long-term capital gains, it is just that long-term capital gains will be subjected to much better tax treatments and will be based on your holding periods.

The Best Crypto Tax Softwares in 2024

1. CoinLedger

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CoinLedger is an American-based company trusted by over 500,000 users. They support a wide range of cryptocurrencies whether that be on centralized exchanges (CEXs) or decentralized exchanges (DEXs). But beyond that, they also support non-fungible tokens (NFT) to get a real accurate tax rating on the user’s account.

Getting set up with a CoinLedger account is relatively intuitive. All you have to do is to create an account from your email address, verify it, and then your account is created. From there, users will need to plug in various sources of information to get a full picture of their tax-related activities, and they only have to pay if they want to generate tax forms at the end of the process.

2. Accointing

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Accointing is probably the best crypto tax software for newbies or people who are new to filing their crypto taxes. Accointing will automatically calculate your crypto taxes, and their intuitive dashboard can be personalized with simple but insightful graphic data.

The platform will guide you through these different strategies through their holding period assistant. Additionally, if you want to add different exchanges, there are also guided processes for that as well.

It’s worth noting that Glassnode, a Swiss blockchain data company that acquired Accointing in October 2022, made a strategic pivot as they are stepping away from the cryptocurrency tax industry, with the sale being appointed to Blockpit in November 2023.

3. Koinly

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Koinly was founded in 2018 in Silicon Valley. The platform allows you to file tax reports in under 20 minutes, and they have had over a hundred thousand tax reports filed since their inception.

With Koinly, you can file your taxes in over 20+ different countries. Even if your country is not supported, you can still use the platform if it uses any of the cost-basis methods.

What’s interesting about Koinly is that they support most altcoins as they support over 17,000 different tokens registered on CoinMarketCap. The software also supports over 100 different wallets and 400 different exchanges including Binance, Crypto.com, and Coinbase.

4. CoinTracker

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CoinTracker has a feature that allows you to share your tax reports with your accountant before processing. The platform has over 1 million users, and the software has integrations with popular NFTs and DeFi sites such as OpenSea, Compound, and Uniswap.

Using the software, you can pull data from over 10,000 different cryptocurrencies with over 300 different exchanges. If your crypto platform is unavailable on CoinTracker, you can pour your data using your crypto wallet’s public address.

Overall, this software is great for NFTs and DeFi and should be a one-stop shop for all of your tax needs.

5. TurboTax

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TurboTax is a popular and widely used tax preparation software developed by Intuit. It is designed to simplify the process of preparing and filing income taxes for individuals and small businesses.

While TurboTax is not strictly a crypto tax software, it does offer support for reporting cryptocurrency transactions in your tax returns. Other users use it alongside other crypto tax software, but users would need to upgrade to the Premier TurboTax Plan to file crypto-specific taxes.

Final Thoughts

Taxes are never fun to deal with, but it is something you absolutely want to get right and as accurate as possible. And these platforms will conduct your tax-related activities in the crypto space. While there are other platforms out there that you should consider, the platforms mentioned may also save you a lot of time and headaches.