March 02, 2022 - 8 min read
Whether you’re a serious crypto trader or investor, or only hold a few thousand dollars in cryptocurrency, managing your crypto holdings and your annual taxes can be nothing short of a nightmare. Regulations vary from country to country, but in the United States, the IRS has issued limited, and sometimes contradictory information on how it will treat cryptocurrencies in relation to an individual’s tax burden.
You may have received tax documents from any crypto exchanges or trading platforms that you have used. This information may or may not be up-to-date or accurate, so it’s important to understand exactly what the IRS says about crypto.
According to the IRS website, “Virtual currency is treated as property and general tax principles applicable to property transactions apply to transactions using virtual currency.”
In addition, the IRS states: “When you sell virtual currency, you must recognize any capital gain or loss on the sale, subject to any limitations on the deductibility of capital losses.” This means that if you have held your crypto for less than a year after buying it, you will generally be responsible for paying short-term capital gains taxes, and, if you have held it for longer than a year, you will generally be liable for long-term capital gains taxes.
Unlike those who have invested in cryptocurrency, if you received cryptocurrency as compensation for full-time employment or independent contracting services, that will be treated as ordinary income.
All of these can seem confusing, but fortunately, there are a variety of free and easy-to-use calculators that will allow you to calculate your cryptocurrency tax burden.
You can input a variety of factors, including the amount of crypto you’ve purchased, your regular income, other investment income you may have earned, and other factors that may impact your overall tax bill. That way, you can avoid unpleasant surprises and potential audits that could leave you and your wallet hurting.
In this article, we’ll review the top 5 crypto tax calculators, their features, and their pricing options, so you can make an informed choice about which product is best for your personal needs. Note that these calculators focus solely on investors and traders living in the United States.
The TaxAct Bitcoin Tax Calculator is one of the easiest-to-use free crypto tax calculators online. The calculator focuses mainly on Bitcoin investors, though it can be utilized for those holding any token or cryptocurrency. It may not be best, however, for those utilizing more advanced crypto investing methods, such as yield farming.
The calculator provides inputs including:
Crypto Tax Calculator is a specialized product that offers a done-for-you tax calculator service via its custom application. This platform is ideal for more advanced crypto investors, as it can perform accurate tax calculations for a variety of more complex tax situations including gas fees, leveraged trading, staking rewards, mining, airdrops, DeFi loans, and DEX transactions. The platform currently integrates all major exchanges, as well as covers NFT sales and purchases. It also allows exports of the IRS’s 8949 form and integrates with TurboTax.
The Crypto Tax Calculator boasts over 400 integrations, more than 60,000 users, and has reportedly been utilized for over 120 million transactions. It also offers a corporate version for businesses, accountants, and accounting firms.
Unlike many calculators, the Crypto Tax Calculator isn’t free. It offers four pricing options, including:
The Crypto Tax Calculator offers a 30-day money-back guarantee.
ZenLedger is another great option when it comes to cryptocurrency tax calculators. The product can directly connect to more than 500 crypto exchanges and wallets, more than 20 DeFi protocols, and more than 40 blockchains, and offers easy import options. non-directly connected wallets and exchanges can be supported via API or CSV file imports.
The calculator will calculate information such as fair market value, cost basis, and your gains and losses for the specific time-period specified.
Much like the Crypto Tax Calculator reviewed above, ZenLedger supports tax calculations for more complex cryptocurrency and DeFi transactions, such as staking, gifts, mining, and exchange rewards like forks and airdrops.
The service auto-populates a wide variety of reports (quite a few more than other products), including the standard IRS Form 8949, Fincen 114/FBAR D, Schedule 1, Tax-Loss Harvesting Documents, and Grand Unified Accounting Report. Like the Crypto Tax Calculator, ZenLedger offers direct import functionality with TurboTax.
ZenLedger offers four plans, including:
Like many other calculators, ZenLedger offers a professional suite for accountants and CPAs, as well as offering 24/7 live chat, email, and phone support for this service.
TokenTax is both a crypto tax calculator service platform and a full-service crypto tax accounting firm, unlike other companies which just offer calculators and DIY products. Unlike many other crypto tax calculator platforms, TokenTax supports taxes for all countries worldwide, with specific attention focused on providing accurate tax calculations in countries including Japan, Canada, South Africa, Australia, Sweden, and the U.K.
TokenTax claims to be the only crypto tax calculator that connects to every exchange, though several other calculators have made this claim. In addition to its calculator service, TokenTax offers a live dashboard that permits users to track their tax liability, as well as capital gains and capital losses for all their transactions.
It also provides an interactive Tax Loss Harvesting Dashboard to help users understand their unrealized gains and losses, making it easier for users to know when and how much of their crypto assets to sell to reduce their overall tax burden. Like ZenLedger and the Crypto Tax Calculator, TokenTax offers easy import into TurboTax.
TokenTax offers three levels of pricing, including:
CoinTracker is another quality cryptocurrency tax calculator and tax platform. Like TokenTax, it offers an automated portfolio tracking service, which allows users to view their portfolio allocation, market value, and investment performance in real-time, across a variety of exchanges and platforms. The platform currently integrates with more than 8,000 cryptocurrencies and more than 300 exchanges.
It should be noted that CoinTracker is more of an investment tracking platform and is somewhat less focused on tax reporting than the other products we’ve reviewed.
Like many other paid crypto tax platforms, CoinTracker offers Support for CPAs, which allows them to easily create tax reports based on their client’s transactions via forms including their Schedule 1, Schedule D, capital gains forms, and IRS Form 8949. All CoinTrakcer products have a 30-day money-back guarantee.
CoinTracker offers pricing options including:
Below, we’ve provided a few links for crypto tax calculators and guides for those living outside the United States:
In addition to Canada, Australia, and New Zealand, Koinly provides crypto tax calculators and advice for a variety of other countries, including France and Spain. For those who are citizens or residents of countries not mentioned here, there are a wide variety of online guides that may address your crypto tax situation in your country.
If your status is in question, contact a qualified and licensed tax professional in your area and look up the local and national tax regulations on the website of your country’s taxation or revenue service.
As a note, the authors of this article are not tax professionals, and nothing written within should be considered to be tax or financial advice. This article is for informational purposes only. For advice on your specific tax situation, contact a licensed tax professional in your jurisdiction.
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