Here’s a look at some of the top crypto tax software solutions and their key features.
What is Crypto Tax Software?
Before we look into individual platforms, what is crypto tax software?
Crypto tax software is a tool that helps people who invest, trade, and actively use crypto calculate their taxes. By importing wallet addresses or exchange transaction history, this software can identify different types of transactions, balances, and any resulting tax obligations.
Here’s what the process generally looks like:
- Import Transactions: You connect your crypto exchanges and wallet addresses to the software. It pulls in all your transaction data automatically.
- Track Gains and Losses: The software tracks all your trades, purchases, and sales of cryptocurrencies to calculate your earnings or losses.
- Review for Accuracy: Check the imported data for accuracy and make necessary adjustments to correctly classify all transactions.
- Generate Tax Reports: At tax time, the software creates reports that show your gains and losses, which you can use to fill out your tax return.
Overall, crypto tax software makes managing the tax aspects of trading and investing in cryptocurrencies easier, saving you time and reducing the complexity of doing it manually.
Crypto Tax Software Providers
CoinTracker
CoinTracker is a popular crypto tax software known for its strong partnerships with companies like Coinbase, Uniswap, and TurboTax. It has financial backing from Coinbase Ventures and Kraken Ventures.
The software can connect with over 500 exchanges, wallets, and blockchains, which makes importing transaction data simple and efficient.
CoinTracker’s basic pricing plan starts at $59 per year for up to 100 transactions, with options for higher tiers that accommodate more transactions for users with greater needs.
For tax reporting, CoinTracker seamlessly integrates with TurboTax and H&R Block, making it easy to file your crypto taxes. It also provides country-specific tax reports for users in the US, Canada, the UK, and Australia.
| Pricing | Starts at $59 per year for 100 transactions |
| Number of integrations | 500+ |
| CEX support | Yes |
| DeFi & NFT support | Yes |
| Countries supported | US, Canada, UK, and Australia |
| Tax software integrations | TurboTax, H&R Block, and .csv files |
CoinLedger
CoinLedger, previously known as CryptoTrader.Tax, is a crypto tax software that stands out for its compatibility with a wide range of tax filing services including TurboTax, H&R Block, TaxAct, and TaxSlayer.
It connects with over 400 exchanges, wallets, and networks, simplifying the process of importing your transaction data. CoinLedger supports tax-loss harvesting on all paid plans, which can help lower your tax bill by offsetting gains with losses.
It also provides unique features like an audit trail and has an official partnership with TurboTax. CoinLedger pricing starts at $49 per year for up to 100 transactions, with options to upgrade to higher tiers for more transactions.
While CoinLedger primarily supports users in the US, it also offers services in countries such as Canada, the UK, Australia, New Zealand, Japan, and Ireland, covering a total of 16 countries.
| Pricing | Starts at $49 per year for 100 transactions |
| Number of integrations | 400+ |
| CEX support | Yes |
| DeFi & NFT support | Yes |
| Countries supported | 16+ countries including the US, Canada, UK, Australia, New Zealand, Japan, and Ireland |
| Tax software integrations | TurboTax, H&R Block, TaxAct, TaxSlayer and .csv files |
Awaken
Awaken is a crypto tax software designed especially for DeFi users, covering areas such as staking and NFTs.
It stands out by offering reliable support for various DeFi and NFT protocols, including Uniswap V3, X2Y2, and thousands of others. It also places a focus on accurately handling things like staking activities, to prevent users from unnecessarily paying capital gains taxes.
Awaken is free for up to 25 transactions, and its paid plans begin at $75 per year for up to 150 transactions. Paying users of competing products can get a discount by contacting Awaken with their receipts.
The platform focuses on capital gains reports for the US, Australia, and Germany, and explicitly states that it does not support tax reporting for Canada or the UK. It can directly generate tax reports for TurboTax and provides .csv exports for other tax software.
| Pricing | Free for up to 25 transactions, paid plans start at $75 per year for 150 transactions |
| Number of integrations | Not stated |
| CEX support | Major exchanges only |
| DeFi & NFT support | Extensive |
| Countries supported | US, Australia, and Germany |
| Tax software integrations | TurboTax and .csv files |
TokenTax
TokenTax is a crypto tax platform that combines tax software with professional tax services, offering CPA consultations as an add-on.
It offers over 120 integrations, mainly focusing on centralized exchanges through API connections and .csv imports. However, its support for DeFi is limited and doesn’t cover some important blockchains like Solana.
Pricing begins at $65 per year for up to 100 transactions, with options available for more advanced needs, such as higher transaction limits and customized enterprise plans.
TokenTax offers detailed tax reporting and IRS audit trails, primarily serving users in the United States. While it can generate crypto tax reports for international users, these reports don’t include pre-filled tax forms for non-US clients.
TokenTax supports TurboTax Online and is an official TurboTax partner.
| Pricing | Starts at $65 per year for up to 100 transactions |
| Number of integrations | 120+ |
| CEX support | Yes |
| DeFi & NFT support | Limited |
| Countries supported | US + global customization |
| Tax software integrations | TurboTax and .csv files |
DeFiTaxes.us
DeFiTaxes.us is a completely free and open-source tool designed specifically for tracking taxes related to DeFi activities. It helps users manage and report complex activities like staking, lending, and yield farming, without the price tag.
While the user interface isn’t flashy, it supports more than 32 EVM chains and Solana, allowing users to add multiple addresses as needed. It’s user-friendly, featuring a color-coding system to help identify the status of transactions: green indicates ready-to-go transactions, while yellow, orange, and red suggest that further review might be necessary.
DeFiTaxes.us doesn’t integrate with centralized exchanges, so users must handle those activities separately. The platform enables users to download a 8949 tax form in a format compatible with TurboTax, or as a .csv file for use with other tax software.
| Pricing | Free |
| Number of integrations | 33+ blockchains |
| CEX support | No |
| DeFi & NFT support | Extensive |
| Countries supported | US, others via .csv |
| Tax software integrations | TurboTax and .csv files |
Koinly
Koinly is a popular crypto tax software that has over 800 exchange, wallet, and platform integrations. It excels at recognizing obscure tokens and transactions in DeFi, minimizing the need for manual adjustments.
The platform also provides detailed portfolio tracking at all price levels, including its free tier, helping users manage their investments across various platforms. The platform integrates directly with TurboTax, TaxAct, and H&R Block, and supports tax reporting in over 20 countries.
Koinly’s pricing starts at $49 per year for up to 100 transactions, with upgrade options for users with more extensive trading activities.
| Pricing | Starts at $49 per year for up to 100 transactions |
| Number of integrations | 800+ |
| CEX support | Yes |
| DeFi & NFT support | Yes |
| Countries supported | 20+ countries |
| Tax software integrations | TurboTax, TaxAct, H&R Block, and .csv files |
What do Reddit users recommend for Crypto Tax Software?
Discussion on Reddit seems to typically settle on Koinly and CoinLedger as the two most popular options. These are both often commended for their user-friendliness and large range of integrations.
That being said, it appears that all platforms have their issues with DeFi transactions, and will require some level of verification and manual amendments. This stems from the constant development within the space, frequently introducing new chains, protocols, and concepts.
Although they’re less popular, Awaken and DeFi taxes are often mentioned in discussing DeFi-specific transactions, allegedly handling these better than the more popular general alternatives.
Users have also highlighted that some of the most common issues with crypto tax software come from the following:
- Forgotten Wallets: If you don’t label all your crypto wallets as yours, transfers between them can mistakenly be reported as income. This error can lead to significant tax differences – sometimes resulting in either no tax or a large tax bill.
- Incomplete Context: Crypto transactions can be complex, and their meanings aren’t always clear from blockchain data alone. Smart contracts might use non-standard methods for handling assets, which automated tools can’t interpret without manual inspection of the code.
- Protocol Mechanics: Different protocols, like Aave and Compound, may serve the same purpose, such as lending, but work differently behind the scenes on the blockchain. Understanding these differences is crucial for proper use.
Free Crypto Tax Software Options
Most crypto tax software options offer “free” tiers that allow users to track and compile their transactions but require payment for any usable tax reports.
The few exceptions include TokenTax, which doesn’t offer a free tier, and Awaken, which provides a free tier for up to 25 transactions only.
DeFiTaxes.us is completely free. However, users must do more manual work to organize their data. It doesn’t support CEX transactions, either, so users will need to handle those separately.
In general, users have two main options when it comes to doing their crypto taxes:
- Perform a significant amount of manual transaction evaluation
- Pay for a subscription plan.
For those heavily involved in DeFi, investing in a paid plan is likely worthwhile to ensure taxes are done quickly and accurately, saving them from accounting headaches down the line.
Considerations for Crypto Tax Software
Before dealing with crypto tax software, there are a few things that you may want to consider. These include:
- Costs for High Volume: The cost for processing large volumes of transactions can escalate quickly, potentially exceeding $500 for 10,000 or more transactions.
- Manual Amendments: Regardless of the crypto tax software you choose, some manual adjustments will be necessary to ensure accurate data processing.
- Transaction Gaps: Occasionally, some transactions may not be detected or included, leading to record inaccuracies.
- Unsupported Chains: Due to rapid development, new blockchain protocols might not be supported by every tax software, especially niche ones, often requiring manual CSV uploads.
- Spam Airdrops: Tokens airdropped to your wallet can include legitimate and spam tokens, and tax software might not distinguish between them, potentially leading to inflated income reports unless manually corrected.
- Legal Gray Areas: The IRS provides limited guidance on cryptocurrency taxation, resulting in many uncertainties that may require professional legal advice for complex transactions.
Understanding these considerations is key to knowing what to expect when using crypto tax software safely and effectively.
FAQ
No, crypto tax software cannot access or move your funds. It can only read data provided by public blockchain ledgers or from exchange APIs.
To use crypto tax software, a user will:
- import their transaction history
- Track their gains and losses
- Review for accuracy
- Generate tax reports
In short, crypto tax software streamlines the accounting process for large amounts of transactions, generating tax reports for crypto users with minimal effort.
Crypto tax software is safe to use in the sense that it cannot access or move your funds.
On the other hand, no crypto tax software is perfect in calculating taxes. It’s up to you to verify that all of the information is accurately reported.
Crypto tax software doesn’t directly report to the IRS or any tax authority.
It helps users calculate their tax obligations by importing transaction data, tracking gains and losses, and generating reports. Users then use these reports to file their tax returns.
While some software may integrate with tax filing services, the user must submit their tax information to the authorities. When using crypto tax software, always ensure compliance with tax laws and filing deadlines.
ome crypto tax software products have free tiers in their pricing plans, but don’t provide tax report documents unless you upgrade to a paid plan.
Regarding paid plans, most software solutions start at around $50 per year for around 100 transactions. This increases with transaction thresholds to around $500 for 10,000+ transactions.
The most popular exception to this is DeFiTaxes.us, which processes DeFi transactions across Ethereum, Solana, and 30+ EVM blockchains free of charge.
