Home » Koinly Review: Easy to Use Crypto Tax Software

Koinly Review: Easy to Use Crypto Tax Software

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About Koinly

Founded in 2018, Koinly is a global cryptocurrency platform with offices in the United Kingdom, the United States, Sweden, and Germany. The firm is based in and abides by the laws of the state where its main office is located, Palo Alto, California 95124.

The platform supports data input through API, CSV files, or x/y/zpub keys and enables users to produce reports in downloadable pdf format. This includes the United States, the United Kingdom, Canada, Australia, and New Zealand.

Koinly offers a complete online crypto taxes auditing service, connecting users with certified tax professionals in their area and producing various tax reports such as First In First Out (FIFO) and Last In First Out (LIFO), Form 8949, Schedule D, and International tax reports.

What Is Koinly?

Koinly is a cryptocurrency tax calculator as well as software that allows you to record your taxable income depending on your trading, mining, staking, and airdrop activities. It is helpful for private traders or investors and corporate or professional accountants who work with cryptocurrency investors.

The Koinly app offers a hands-off approach! All you have to do to get started is join your exchanges, wallets, or other services by providing their API keys, and it will handle everything else for you automatically.

Your financial dealings will be imported without your intervention. Additionally, it will compute all market prices when you trade, match transfers inside your wallets (so that you won’t have to pay taxes on these transactions), figure out your cryptocurrency profits and losses, and create your cryptocurrency tax returns.

How does Koinly work?

A Koinly account may be thought of as an enhanced Excel spreadsheet. When executing a large number of computations, it does it in a timely and reliable manner.

The first thing you need to do is import your previous transactions into the application. After that, you will need to get your API keys from your wallet and enter them into Koinly. You also have the option to export the CSV file stored in your wallet to extract the data using Koinly.

The next thing that must be done is a thorough inspection to ensure everything was imported accurately. One more time, you do not have to pay anything to get this overview. You may think of this as a conventional portfolio tracking application since it enables you to monitor all of your bitcoin assets across various platforms and services.

You are required to export all Koinly-generated tax reports to file your taxes, whether you do it manually or use tax preparation software like TurboTax (you must purchase one of the available packages to do this).

Koinly can produce various forms, including Form 8949 and Schedule D. If you file taxes in the United States, Koinly can also generate fully-filled IRS tax forms for you.

Koinly Pros and Cons

Pros

  • Available in more than 20 tax jurisdictions
  • 4 different pricing plans
  • A free version is available
  • Calculate taxes for use cases like staking and DeFi [NFTs?]
  • Extensive cryptocurrency and exchange support

Cons

  • Expensive for big traders
  • Doesn’t take cryptocurrency as payment

Features

Koinly, one of the most famous players in the market for cryptocurrency tax software, has several characteristics that set it apart from the other options available.

Multi-Country Koinly Support

This platform is accessible to users in over 20 countries worldwide, including Europe, Asia, Oceania, and the Americas. Koinly users can also produce locally customized versions of Form 8949 and tax reports using Schedule D, K4, Rf1159, and Sheet 9A.

Integrations

Koinly is integrated with over 6,000 blockchains and provides automated imports for Bitcoin, Ethereum, Litecoin, and NEO. In addition, Koinly offers extensive service integration.

Additionally, it interacts with 350 exchanges, including as Binance, Coinbase, and Kraken; portfolio applications, such as Blockfolio and Delta; and 75 wallets, and it enables you to conveniently keep track of mining, staking, and a variety of other DeFi activities.

Tax Reporting

Koinly gives you access to several tools that may help you determine any problems with your transactions and ensure that they are as accurate as possible when completing a crypto tax return. Some of these tools are as follows:

Deleted Transactions: Draws attention to problems that lead to negative account balances, such as incorrect imports or absent transactions

Verification of Auto Import: Use the API to automatically validate your wallets to confirm that all of the data was imported correctly and to pass the verification of the automated import.

Easy Data Importing

Koinly enables you to connect with a range of services via the application programming interface (API) and critical import data. In addition, manual CSV file imports, xPub/yPub/zPub imports, and data migrations from Nexo, Deribit, BlockFi, Bitmex, and CoinTracking are all supported.

Tax Loss Harvesting

Using this platform makes the process of tax loss harvesting simple. Koinly will explore the data you provide to find possibilities for you to realize losses that may be carried forward or used to offset gains in other sections of your portfolio, reducing the amount of money you owe in overall taxes.

Free Account

The software allows the free tracking of up to 10,000 transactions and the generation of previews of potential capital gains tax liabilities. You can use the free account unlimitedly to keep tabs on all your cryptocurrency transactions and activities.

Koinly offers its customers a comprehensive list of tools, including a Crypto Tax Calculator, Regional Tax Guides, a list of Tax Accountants, and a blog, to keep its users up to date on the latest cryptocurrency news and process to file taxes.

Countries Supported:

This crypto tax monitoring program will reportedly be usable by the vast majority of cryptocurrency users throughout the globe, as stated on the Koinly website.

If the reporting template used in your nation is the same as that used in other jurisdictions around the globe, then you will be able to utilize Koinly.

A basic Koinly crypto tax software template is standard in various jurisdictions worldwide. In addition, Koinly’s website identifies the following nations as ones that are supported:

  • United States
  • Canada
  • Australia
  • New Zealand
  • United Kingdom
  • Germany
  • Sweden
  • Denmark
  • Finland
  • Norway
  • Netherlands
  • France
  • Spain
  • Italy
  • Austria
  • Lichtenstein
  • Czech Republic
  • Estonia
  • Malta
  • Japan
  • South Korea
  • Singapore

Tax Reports Generated:

Koinly is capable of producing a wide variety of localized tax reports for a variety of nations, such as the following:

  • Capital gains summary for UK
  • Form 8949 and Schedule D
  • Swiss Valuation Report
  • Sheet 9A
  • Rf1159
  • K4

In addition to more conventional tax documents, some additional localized reports are also generated for users, which include the following:

Complete Crypto Tax Reports

This report may be obtained as a PDF and comprises a summary of your income, assets, end-of-year balances, and capital gain transactions. Crypto tax report also includes a summary of your capital gains, margin gains, and capital gain transactions.

Transaction Reports

These are comprehensive records of your business dealings that can be saved as a CSV file.

Capital Gains Report

This is a comma-separated value file that lists all of your sales.

Income Report

This CSV file details all of the transactions pertaining to your income, such as forks, interest, staking rewards, and airdrops.

Reports on Gifts, Donations, and Lost Assets

This is a comma-separated value file that includes any transactions that have been labeled as a Gift, Donation, or Lost.

Expense Reports

This CSV file includes all transactions classified with the cost category. On the other hand, your trading costs have already been considered in your capital gains report; therefore, they are omitted here.

Reports on Holdings at the End of the Year

This CSV file lists your holdings at the end of the tax year.

Reports for TurboTax

These are comma-separated value (CSV) files that provide your financial transactions in a format compatible with the tax program TurboTax.

Koinly Supported Exchanges

Since the Koinly app supports more than 350 exchanges, it would be unrealistic to mention all of the exchanges that Koinly is compatible with within this article. The degree of assistance that is offered for each transaction has the potential to differ.

Koinly only has full access to some action that has ever taken place on your exchange account since, for example, certain exchange APIs do not supply Koinly with such information.

You need to investigate this matter before selecting Koinly as your cryptocurrency tax solution since some actions, such as purchasing bitcoin with a debit card or seeing the history of your margin trading, are simply not possible through an exchange’s application programming interface (API).

The following is a list of some of the most well-known crypto exchanges and other services that Koinly natively supports:

  • Binance
  • Bittrex
  • Bitstamp
  • Bybit
  • Changelly
  • Coinbase
  • Gate.io
  • Gemini
  • Kraken
  • Kucoin
  • OKX

Koinly Supported Wallets

Some of the Wallets that Koinly supports include the following:

  • Electrum
  • Enjin
  • Exodus
  • Ledger
  • Metamask
  • Mycelium
  • Parity
  • Phantom
  • Trezor
  • TrustWallet

Koinly Supported Blockchains

Koinly supports over 6,000 different cryptocurrencies through CSV import and manual input. It also has automated import for 14 blockchains, including Bitcoin, Ethereum, Avalanche, Polygon, Binance chain, Litecoin, NEO, and EOS.

Plans break down:

Users have access to four distinct versions of the Koinly cryptocurrency tax app, and the price of the software varies depending on which version of the app they choose to purchase.

Free

The Free tier of Koinly does not need any kind of payment whatsoever, as is clear. Unbelievably, the free edition of Koinly still provides access to the vast majority of the app’s functions.

Nevertheless, the most significant limitation for users who choose the free version is that they cannot create any tax reports using the app. You will only be able to do a little with the capital gains preview that may be made with the app.

Although you can import your entire cryptocurrency portfolio from your multiple exchange accounts and wallets (up to 10,000 transactions), you will need more time to accomplish this.

You can get a pretty good idea of how much you’re going to owe in taxes by using the free version of Koinly, but if you want any piece of software to finish and file your taxes for you, you’re going to have to spend at least a little bit of money for it.

Newbie – $49 Per Year

The annual fee for the paid edition of Koinly, which is the least expensive option, is $49. The primary extra function available when upgrading to this program’s Newbie tier is the opportunity to file your taxes directly from inside the application.

However, if you use the free version of Koinly, the restriction on the number of crypto transactions you may trace will be decreased to only 100.

Custom file imports for your cryptocurrency portfolio and a more in-depth cost analysis on how Koinly computed your taxes are the other two extra capabilities that come with this premium edition of the program.

Both of these features may be accessed by upgrading to the paid version. If you make a few deals each year and want everything related to your taxes to be handled automatically, then this will be your best option.

Hodler and Trader — $99 or $179

The Hodler and Trader levels of the Koinly app are the most priced. The sole difference between the Newbie tier and the Hodler tier is that the Newbie tier only allows you to import 100 crypto transactions. In contrast, the Hodler tier will enable you to import up to 1,000 crypto transactions.

The annual subscription fee for the Hodler edition of Koinly is $99. When you upgrade to the Trader tier and receive full customer assistance through email, you also have access to unlimited transactions that can be tracked.

The version of Koinly, known as Trader, costs $179 per year and is designed to be of the most outstanding value to traders who often move funds into and out of various cryptocurrencies.

Conclusion:

If you live in a country where Koinly is available and need a tool to keep track of your crypto activities to generate tax reports, you may use Koinly. The simple web-based interface lets you instantly sync your wallet addresses and exchange accounts.

The platform has strong primary functionality and good integration with a large variety of crypto service providers. The convenience and ease with which transactions are recorded and managed are greatly enhanced by the service offered.

How to Use Koinly

Follow these five steps to open a Koinly account:

Step 1: Go to the website for Koinly and click “Sign up.”

Step 2: Pick a password and type in your name and email address. Then click the “Open a profile” button.

Step 3: Choose your home country and base currency in the drop-down menus. Next, click “Continue.”

Step 4: Add your wallets and import your information by having your transaction history sync automatically or uploading it.

Step 5: To upgrade your account, choose “Plans” from the drop-down menu in the top right corner.

How to Upload Transactional Data with a CSV File

Follow these six steps to move your transactions from another account to your Koinly account:

Step 1: Open the page for Wallets.

Step 2: Find your wallet and click the three dots to open a small menu.

Step 3: Click “Import file”

Step 4: Drag the folder into the file box, then click “Browse.”

Step 5: Click “Import”

How to Add Your CPA to your Koinly Account

You should probably add your accountant as a contact on your Koinly account. This is how to do it in 3 steps:

Step 1: After logging into your Koinly account, go to Settings in the top right corner.

Step 2: Click “Team” on the left side.

Step 3: Type in the email address, then click “Invite” and “Send Invite.”

Koinly Security Features

The team places a high priority on maintaining the confidence of customers and keeping user data secure. To this end, they use a variety of security policies that are aimed to prevent any exploits or breaches.

The most crucial thing to note is that Koinly does not need your private keys in order to access any monies that are housed in your exchange accounts.

However, since it communicates with your accounts through API, it is always a good idea to restrict the ability to withdraw money and trade while you are creating your API connections. This is because it is possible for hackers to exploit this vulnerability.

Before being saved, all API and blockchain keys are encrypted using aes-256-gcm encryption. Additionally, the website is entirely delivered via https, and all data sent to or from Koinly is protected using 256-bit encryption.

In addition, data storage and website hosting are handled by Amazon Web Services (AWS) and Heroku respectively for Koinly.

Heroku is a safe cloud application platform that separates client programs and data, and Amazon Web Services (AWS) is a pioneer in the market when it comes to delivering secure hosting.

Questions:

Is Koinly Legitimate?

Koinly is a legitimate company, but even if that weren’t the case, there is absolutely no danger of you losing any of your money due to hacker activity. Koinly does make use of your API credentials in order to read data from your exchange accounts, but that is the extent of its capabilities.

It is unable to trade on your behalf or take funds from your account. By extension, a possible hacker who would damage the Koinly platform does not have access to that same choice, since it is not accessible.

Is it safe to connect to Koinly?

Due to the fact that Koinly only has read-only API permissions, the answer to your question is that it is perfectly safe to link Koinly to any exchange.

How accurate is Koinly?

It has a precision that is more than 98%. You may check that all of the transactions that took place between your own wallets have been matched by going into Koinly and going through your transactions there.

What is better than Koinly?

One of the greatest tax software options for complete tax reports for cryptocurrency traders is Koinly. Zenledger and Coinledger are two other useful tools that are also available.

Gary Ngo

Gary Ngo

I am a crypto-enthusiast that likes to write about the blockchain industry. Mostly, I'm interested in the gaming industry and how it will revolutionize in-game asset ownership.

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