Best Crypto Tax Softwares To Make Your Life Easy In 2020

I know ‘Tax’ is not your favorite subject and neither of mine.

But Benjamin Franklin said:

In this world, nothing can be said to be certain, except death and taxes

And I believe you agree with him.

But whether you agree or disagree taxes are a reality and in almost every country on this planet, we need to comply with the taxmen.

Cryptocurrencies are no different, and you have to pay some or other sort of tax forms on buying or selling of cryptocurrencies.

Also, if you’re involved in cryptocurrency mining then also you have to pay the tax forms. In some countries, file tax returns just because you’re involved in mining activity and some country’s tax return are only applicable when you sell the currency which you obtained through the mining activity.

This is more so in developed countries like the United States, the United Kingdom, Canada, Australia, etc. where most of the cryptocurrency users like you reside.

You might have realized by now how cumbersome and challenging the process is to calculate and file your cryptocurrency tax forms.

So many coins to take care of, n-number of trading history made in the last financial tax year and the number of cryptocurrency margin trading exchanges accounts on various cryptocurrency exchanges only make the matter more complicated.

So without further beating around the bush, I urge you to look at some of the best crypto tax software to use in this tax season and get your crypto tax reporting sorted:

Best Cryptocurrency Tax Software in 2020

There are both free and paid bitcoin tax softwares available in the market.

But for this guide, I will touch only upon paid best crypto tax softwares because no one would want to get in trouble later due to seen/unseen mistakes committed by free softwares.

#1. CryptoTrader.Tax

CryptoTrader Tax Software is a smart taxation software that lets you calculate your crypto income and crypto taxes painlessly. They are doing crypto taxation since 2017- the holly great bull run of Bitcoin.

This is automation software that can help your cryptocurrency tax preparation yourself using the same methods which tax professional use (like FIFO, LIFO, etc.).

The best part is, CryptoTrade goes through your trade level date to accurately calculate the right amount of taxes you need to file and pay to the IRS (or any tax authority).

It gets better:

You can now connect CryptoTrader Tax software with 25 cryptocurrency and bitcoin exchanges using their API integrations which I think is the most number of crypto exchanges supported by any crypto tax software.

Lastly, you get all sorts of autogenerated reports such as cryptocurrency income report, short & long term sales report, IRS Form 8949, Audit trail report, End of Tax Year positions report, TurboTax online direct import, etc.

Pricing: Varies on number of Transactions Per Year

Check Out CryptoTrader Tax Now

#2. Token Tax

Token Tax is another easy and reliable crypto tax software to help you with your cryptocurrency tax returns to dodge the taxmen.

They have a reliable team based out of the US who has been doing this for cryptocurrency lovers like you since 2017. So whether you are based out of the US, UK or Japan, Token Tax helps you in your tax return on crypto income in a compliant way.

Token Tax support with 50+ cryptocurrency exchanges to generate all sorts of compliance tax reports such as Schedule C, 8938, FBAR, and 8949, etc

For international crypto taxes, Token Tax is one of the few taxation tools which connect and handles tax liabilities of margin trades from margin exchanges like Poloniex, BitMex, Bitfinex, etc. correctly.

Lastly, if you want a human touch and want to interact and get support with the staff of accountants and crypto tax professionals to get rid of your crypto tax liabilities and audit, Token Tax is the way to go !!

Pricing: Varies on number of Transactions Per Year

Try Token Tax Now

#3. CoinTracking

CoinTracking provides the easiest means to track as well as calculate taxes on your cryptocurrency portfolio.

CoinTracking is based out of Germany, Europe and started catering to cryptocurrency users in 2013. At the start, it was only a cryptocurrency portfolio tracking service to calculate your profits statements.

However, now as a natural recourse, CoinTracking provides full tracking of crypto portfolios as well as support tax calculation using advanced calculation techniques such as FIFO, LIFO, AVCO, HIFO, and LOFO, etc

You also get the liberty to download capital gains report and other tax reports based on several tax parameters for your tax accountants or yourself so that you can DIY the tax liabilities.

Lastly, CoinTracking provides support for imports and integration from all the major exchanges and popular wallets to give you the complete picture if your cryptocurrency portfolio and tax liability.

Pricing: Varies on number of Transactions Per Year

Check Out CoinTracking Now

#4. ZenLedger

ZenLedger another DIY crypto taxation tool on which you can trust to calculate your crypto liabilities accurately.

Established in 2017, ZenLedger is based out of the US and has been helping crypto traders, miners, and crypto holders to ensure they never pay more taxes than required in their tax season.

Using ZenLedger, you can import your trade level data from all the major exchanges to produce income and profit/loss statements for you or your CPA.

Apart from that, you can audit and download tax reports and other reports like capital gains, income reports, donation Reports, and closing reports by using the best of the calculations techniques such as FIFO, LIFO, etc.

Lastly, ZenLedger doesn’t forget to account for your ICO investments and airdrops that you have received in your exchange accounts for the taxation purpose to give you the holistic picture of your crypto portfolio.

Pricing: Varies on number of Transactions Per Year

Try ZenLedger Now

#5. CoinTracker

Another reliable and easy to use cryptocurrency tax tool is CoinTracker. It is based out of the US and serving customers since 2017.

As its name also suggests. It is capable of tracking your coins on more than 50+ crypto exchanges worldwide to generate actional gains and loss statements on your crypto portfolio.

Additionally, CoinTracker also supports integration with your cryptocurrency wallets as well as various crypto lending platforms for ease of calculations. Moreover, CoinTracker is also one of the few exchanges capable of calculating taxes on margin trades by integrating with margin trading exchanges.

Lastly, you can pay the lowest taxes by calculating your taxes on your desired cost basis method, including FIFO, LIFO, HIFO, adjusted cost basis, share pool, tax-loss harvesting, etc.

Pricing: Varies on number of Transactions Per Year

Try CoinTracker Now

So now I hope you have a clear picture of how to cryptocurrency tax softwares support your Tax filling and make your life easy.

In my opinion, you should go CoinTracking or CryptoTrader Tax software as they seem to be providing a comprehensive set of features to give you relief of your crypto tax liabilities.

I will leave the final call on to you, but before departing, I would like to highlight some of the most commonly asked questions by crypto taxpayers.

So here I go:

What Is Bitcoin & Crypto Tax?

Bitcoin or crypto tax is simply an additional tax that your government expects you to pay when you buy or sell cryptocurrencies. This so because, Bitcoin and other cryptocurrencies keep appreciating in value and governments around the world want to cream off some of your profits the moment you enter fiat territory.

Meaning the moment, you convert the cryptos in fiat currencies like USD or EUR, etc.

How To Calculate Bitcoin & Cryptocurrency Taxes

As I shared with you, calculating crypto taxes is as cumbersome as it gets.

There unlimited exchanges on which allows users to trade crypto and there are different wallets for each cryptocurrency.

On an all, the infrastructure is hugely fragmented in terms of trading as well storage of so many cryptocurrencies which makes the matter impossible to audit and calculate taxes manually.

That’s it is wise to spend a few bucks to save you the time and make you compliant with your tax authorities by option for a cryptocurrency tax software like CryptoTrader Tax or CoinTracking which support integration with your favorite exchanges and wallets.

How To File Crypto Taxes?

If you do your taxes yourself, it would be wise for you to subscribe to a DIY crypto tax software like CryptoTrader Tax so that you can generate a custom tax report which is compliant and acceptable by tax authorities like the IRS form 8949

On the other hand, if you want something that is completely automated and managed via some human interaction and gets some personal support from expert tax consultants or CPAs, it is wise to get a detailed tax report and file your taxes through Token Tax.

How Is Bitcoin & Crypto Taxed?

Bitcoin and other similar cryptocurrencies are taxed as per your national taxation authority. In the US, the body is IRS, and they classify Bitcoin and another cryptocurrency as assets and property.

Hence property tax is applicable to it as per the different tax slabs and different time durations for which one holds these currencies and crypto assets.

There are some countries which classify cryptocurrencies as a commodity and some as legal tender but taxation rates range from 10-30% depending upon the slab of taxation and the period of your holding (like short term capital gains tax or long term capital gains tax)

How To Tax Bitcoin Gains/Income?

Bitcoin and other currencies are taxed based on capital gains.

Capital gains tax works like this:

For example, you bought 1 BTC for $10,000 from any of the popular trading exchanges, and now after a price spike BTC is trading at $15,000 and you decide to sell. Now with these cryptocurrency transactions, you made an extra income of $5000 here which your gained capital and this is taxable.

On the other hand, there are other types of taxes too on cryptocurrencies like VAT or service tax, etc. But this differs from country to country.

How Much Tax Do You Need To Pay On Bitcoin Profit?

The amount of tax you are liable to pay depends upon your country.

In some countries, there is no tax on cryptocurrencies whereas, in countries like France, crypto-to-fiat transactions are taxed at a 19% flat rate.

In-country like the US, cryptocurrency taxes rate can vary 0% to 20% based on the way you are filing taxes and the time you are holding your cryptos for

So now you tell us:

Are you filing cryptocurrency taxes? If you are, how are you calculating it? Which cryptocurrency tax software are you using and which country do you reside?

Let us know and if you have any questions feel free to shoot those in the comments below πŸ™‚

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