Best Crypto Tax Software

Read our Advertiser Disclosure.
Contributor, Benzinga
April 4, 2022

Looking for the best crypto tax software to break down exactly what you need to pay the IRS? Try Ledgible or Accointing today to make crypto legible for consumers and tax professionals alike.

It’s hard enough to do your taxes right when they are simple. As a cryptocurrency and non-fungible token (NFT) trader, the shifting sands of tax regulation can leave you on shaky ground. As of March 2022, full consensus doesn’t exist on how cryptocurrency, NFTs, crypto interest and other DeFi assets should be taxed.

Your best defense is to use a tax preparation software configured for decentralized finance (DeFi), crypto and NFT traders. Benzinga reviews the best crypto tax software here.

Quick Look: Best Crypto Tax Software

Best Crypto Tax Software

As overwhelming as it might seem when you cast your mind back over the many work-from-home crypto transactions you were able to transact during the pandemic lockdown that gripped 2021, rest easy that enterprising tax experts have created crypto tax software to get you organized and compliant with IRS regulations.

Ledgible

Ledgible is one of the fastest growing crypto tax platforms in the world. It offers excellent services for both consumers looking to file their own taxes, tax professionals who need to make crypto Ledgible and enterprises that use crypto. Ledgible supports all the top cryptocurrency exchanges and wallets, even including hardware wallets like Ledgers, Trezors and more. Ledgible offers industry-leading security and has undergone SOC 1 & 2 audits to prove it.

Ledgible pricing:

Tax Professionals: Ledgible is free for professionals as clients are charged directly on a per-client basis.

Consumers: With Ledgible, you only pay for what you need.

$49 tax-year reporting for up to 200 transactions

+$50 for 200-1000 transactions

+$100 for each set of 2,500 transactions after 1,000

Accointing

Accointing is a leading crypto tax and portfolio tracker platform. It connects to your exchange accounts directly and supports a whopping 400+ exchanges. Although it also offers a free version for up to 25 transactions, Accointing’s basic service costs $79 per year. The team at Accointing helps you “track your portfolio and easily report your crypto taxes by yourself, with TurboTax or with our crypto tax advisors.”

Accointing Pricing:

  • Pro: $299 (5,000 - 50,000 transactions)
  • Trader: $199 (500 - 5,000 transactions)
  • Hobbyist: $79 (25 - 500 transactions)
  • Free Tax: $0 (1 - 25 transactions)

Koinly

Koinly is perhaps the most well-known of the choices in crypto tax software, it has a clean easy-to-use interface and works great for beginners. With a Free plan you can import all your data and view your crypto capital gains and income, a $49-per-year subscription yields a complete report to hand to your tax preparer or to use yourself. It supports over 600 integrations with crypto exchanges/wallets and has the widest coverage of blockchains. 

Koinly “can help you generate your crypto tax reports — no matter where you live. From the U.S. to Scandinavia to Japan and every country in between.”

Koinly pricing:

  • Free: $0 per year
  • Newbie: $49 per tax year
  • Hodler: $99 per tax year
  • Trader: $179 per tax year
  • Pro: $279 per tax year
  • securely through Koinly's website
    securely through Koinly's website
    Best For:
    Integration with Exchanges
    Rating:

CryptoTrader.Tax/CoinLedger

Priced the same as Koinly at $49 per year for a basic plan, CryptoTrader.Tax — rebranding as CoinLedger — supports over 350 exchanges and lets you export your data to your tax software. It offers a 14-day money back guarantee. According to CryptoTrader.Tax/CoinLedger its “cryptocurrency tax software is built to save you time and maximize your refund.”

CryptoTrader.Tax/CoinLedger pricing:

  • Hobbyist: $49
  • Day Trader: $99
  • High Volume: $199
  • Unlimited: $299

TaxBit

TaxBit, coming in at just slightly more, charges $50 per year for its basic service of unlimited transactions. It supports all exchanges. TaxBit uses its advanced platform to try to provide “the most trusted platform that unifies digital assets tax and accounting across enterprises, consumers and governments.”

TaxBit pricing:

  • Basic: $50 per year
  • Prus: $175 per year
  • Pro: $500 per year
  • securely through TaxBit's website
    securely through TaxBit's website
    Best For:
    Beginners and tax professionals
    Rating:
    Read Review

How is Cryptocurrency Taxed?

Although the U.S. government has promulgated information on how cryptocurrency should be regulated, the rules are not wholly definitive. On March 9, 2022, President Biden signed an Executive Order to examine the government’s future role in regulating the sector. 

The most definitive current guidance on crypto taxation — IRS Notice 2014-21 — defines crypto as a digital asset that is U.S. property to be quantified in U.S. dollars on the date you sell it. 

Most tax preparers consider NFTs to be digital assets like cryptocurrency. However, IRS Notice 2014-21 does not specifically classify NFTs as digital assets, and some recent guidance hints at the potential to classify these profits as collectibles subject to the 28% tax rate.

Crypto-to-crypto swaps (including NFTs), staking, mining and airdrops are also examples of taxable events within the crypto ecosystem that don't involve cashing out to fiat but that are subject to taxation. Platforms like Ledgible already know this and remove much of the daunting process of classifying each transaction.

Keep in mind that similar to the stock market, you only report and potentially owe taxes on crypto gains you’ve realized; in other words, if you started 2021 with a balance of $5,000 in your crypto account and end the year with a balance of $9,000, that doesn’t mean you’ve made a taxable profit of $4,000. You only have to report and pay taxes on assets you sell to lock in gains or losses. In the example above, if you sold nothing in 2021, you have nothing to report on your Form 1040. 

How to Keep Track of Crypto Taxes

The best crypto tax software platforms discussed in this article provide useful, comprehensive methods to record and track your crypto trades as a trader and for tax purposes. Any of the platforms discussed here will work well for you. No one would argue that tracking crypto activity regularly over the year makes tax preparation much easier, but it’s easier to contemplate the theory of keeping on top of crypto trading than the reality of doing so — unless you subscribe to a crypto software tracking platform.

For example, in its user-friendly dashboard, Koinly offers subscribers the ability to view their total holdings, portfolio growth, tax liabilities, ROI, invested fiat, mining, staking, lending, profit and loss, capital gains and other crucial tracking metrics. 

Reporting Crypto on Taxes if You Lose Money

Like stock market trades, profits and losses from crypto trades in a year are aggregated and combined with other income earned that year. When you buy or sell an asset, you have to report to the IRS on your Form 1040, the date and amount of the sale and the “basis” of the asset. The basis is the amount you paid for the asset plus expenses related to that sale like gas fees or other fees and costs. 

Just because you made a loss on one trade doesn’t mean you won’t owe taxes on the total of your crypto sales in a given year. For a simple example, if you lost $5,000 in crypto sales and made $7,000 in other crypto sales, you would have an aggregate profit of $2,000 that would be added to your other taxable income.

Can the IRS Track Cryptocurrency?

If you entered your Social Security number in any brokerage, exchange, wallet, account or other entity in which you bought, sold, staked or traded crypto, NFTs or other DeFi instruments, the IRS can track your activity. Part of the appeal of DeFi is the potential for profits to go untracked and hence untaxed, Studio 54-style — but the IRS has turned to platforms like Chainanalysis to up its game in tracking crypto enthusiasts trying to avoid paying their fair share of taxes.

How to Avoid Cryptocurrency Taxes

Although the IRS Taxpayer Bill of Rights states that “taxpayers have the right to pay only the amount of tax legally due,” it does not support the right to avoid paying income taxes that are rightfully owed. Just because you trade crypto doesn’t mean you necessarily owe taxes. However, if you sell crypto or NFTs, after you correctly compute the net profit you’ve made from that activity, you have to report those profits to the IRS on your income tax form.

You can legally avoid taxes in a tax year by using tax-minimizing strategies like tax-loss harvesting, aiming for long-term gains over short-term and bundling deductions

When to File Cryptocurrency Taxes

Individual income taxes for 2022 completed on a Form 1040 are due Apr. 15, 2023, with the opportunity to extend the filing date — but not the payment date — until Oct. 16, 2023. You report personal cryptocurrency, NFT and other DeFi transactions on Form 1040. 

If your partnership, LLC or corporation needs to report crypto transactions on a tax return, you would need to file by the due dates for those tax forms to avoid penalties. Partnership and LLC Form 1065 returns were due by March 15, 2023, with an extended due date of Sept. 15, 2023. Corporate Form 1120 returns follow the same due dates as the Form 1040.

Frequently Asked Questions

Q

Does Coinbase report your crypto transactions to the IRS?

A

Yes, Coinbase reports your crypto transactions to the IRS.

The Crypto Rocketship: Weekly Newsletter
  • Exclusive Crypto Airdrops
  • Altcoin of the Week
  • Insider Interviews
  • News & Show Highlights
  • Completely FREE

About Kathryn Hauer, CFP®

Kathy is an expert in finance (personal, corporate), financial planning, financial literacy, tax preparation and laws, saving and investing, retirement, insurance, careers, college education planning and financing, cannabis, gig economy, forming and running a business, credit and debt issues, blue-collar workers, and military issues. She has a strong interest in crypto, DeFi, FinTech, InsureTech, AgTech.