How To File Bitcoin Taxes The Right Way ?
Bitcoin Taxation – Know Your Cryptocurrency Income And Capital Gains !
DO YOU HAVE TO PAY TAX ON BITCOIN ?
Did you know that you have to pay taxes on your crypto gains? It’s true. It may be something no one wants to deal with, but we’ll help you understand how it works and why it matters.
Here we share the best cryptocurrency tax tools we have seen so far. For crypto traders the tax issue is something that can be stressful, especially if you don’t know much about tax on cryptocurrency trades, or you may be unsure whether you need to declare it. It is crucial to know your finances and to know all the factors that influence them so that you can truly understand how much you have.
WHY IS IT IMPORTANT ?
A trader has to keep a close eye on his expenses, tax, and turnover, just like a business owner would. Particularly when it comes to crypto trading, it is essential to be aware of how much money in fiat you will need at a certain point in time when taxes are due. Especially if you trade a lot, making sure everything is done legally can be a bit challenging or annoying to make those tax calculations on the side all the time. Assuming that you already know how it works in your country.
HOW IS BITCOIN TAX CALCULATED ?
Your cryptocurrency taxes are calculated based on the gains and losses you have from your digital asset holdings of cryptos such as bitcoins, ethereum, dogecoin and tokens such as NFTs. Crypto gains are taxable from the time they are acquired until they are sold or exchanged.
The easiest way to handle tax issues is to use a professional service or tool that specializes in that particular area. Due to the rise of crypto trading in the past few years, such services have been established, especially during the bullish run towards the parabolic bubble at the end of 2017. The internet is full of websites and services, but the crypto world is full of scams and shady services, so we try to identify those who can be trusted and legit.
Bitcoin is the future, and the future is looking bright. Making sure you’re compliant with your taxes doesn’t have to be difficult or tedious. These online tools makes paying your crypto taxes as easy as possible, and basically do all the job for you.
The Best Crypto Tax Report tools that we found :
# 1. Cryptotrader.com
CryptoTrader.Tax is a crypto tax calculator that allows users to import their crypto income and trades into the program where your gains and taxes will be automatically calculated for you in minutes.
CryptoTrader.Tax meets the needs of any cryptocurrency investor. However, this service will be more useful to serious traders rather than casual traders.
However, heavy traders with thousands of transactions will see more benefits than casual traders with only a few trades here and there.
CryptoTrader.Tax offers low-cost trading options, making its service accessible to new investors. Any crypto trader will find some utility in a service that reduces tax burdens and provides accurate paperwork.
However, CryptoTrader.tax lacks any additional features, so it is very basic compared to Cointracking.info, but it gets the job done.
Supported Exchanges / Brokers
#2. Koinly
Koinly provides a portfolio tracker and tax calculator tool designed to make the calculation of annual gains and losses easy for all users. Supporting hundreds of countries, thousands of cryptocurrencies, and seamless integration with some of the most popular exchanges, this platform is one of the best for tax season.
The Free and Newbie plans are perfect for new crypto traders and investors who want to calculate their bitcoin tax. The Koinly website has valuable crypto content that will suit any newcomer to cryptocurrency.
You can use the localized tax options as well as the crypto tax guides when you are still learning how crypto taxes work.Those who regularly trade crypto will find that the paid plans cover most of their crypto tax needs. The platform’s ability to integrate with leading exchanges, blockchains, and wallets will amaze you.
Supported Exchanges / Brokers
#3. Cointracking.info
When it comes to tracking cryptocurrency trading activities and the corresponding tax reports, CoinTracking.info is one of the most complex one available.
There are 54 trading platforms that traders can import data from, such as Cobinhood, KuCoin, HitBTC and cryptobridge. Cointracking.info does not only allow traders to track all their trades and give price trend overviews, but it also prepares all the trading and income data for tax reports.
Cointracking.info supports all cryptocurrencies, totaling over 6,000 altcoins.
We especially appreciate the fact that this cryptocurrency tracking tool has a fun user dashboard that shows high-resolution charts and graphs. The program made in Germany is literally able to handle everything for you when it comes to keeping track of where you stand financially in terms of digital currency.
Even special features like email alerts about rising or falling coin prices you own are available.
Supported Exchanges / Brokers
#4. Bitcoin.tax
The approach of this platform is a bit different from the previous ones. Generally, you can import your coin trades from a range of trading sites and let the program calculate your taxes. Furthermore, you can import your mining rewards from wallet addresses or CSV files using this crypto trader tax report tool. Also, you can monitor individual wallet addresses, and the program will handle the IRS form 8949 for you, so you won’t have to worry about it. The difference is that they allow you to locate a tax consultant or accountant directly through their website.
You should remember that all of those tax calculating platforms should not replace individual advice from a professional accountant. You may still need assistance with accounting or tax declaration, which is why Bitcoin.tax exists.
Supported Exchanges / Brokers
- Binance
- Bitfinex
- bitFlyer
- BitStamp
- Coinbase
- Coinbase Pro (GDAX)
- Cryptopia
- Gate.io
- Hitbtc
- Bittrex
- BTC-e / WEX
- CampBX
- Cex.io
- Circle
- Kraken
- KuCoin
- Liqui.io
- LocalBitcoins
- Payful
- Poloniex
- Uphold
- and others by manually prepared CSV
#5. Zenledger
Zenledeger is a cryptocurrency tax calculating tool that integrates with leading crypto exchanges and wallets to gather trading data and automatically calculate and create tax reports. Also, it seamlessly integrates with traditional tax calculators such as TurboTax, automating the whole filing process directly to the IRS.
In comparison to its main competitors: CryptoTrader.Tax and Cointracking.info, ZenLedger is a bit more expensive. In addition, it offers top notch customer service, including additions like “done for you taxes” as well as the opportunity to invite your own CPA. With more exchanges and wallets that are added to the tool constantly, it is an excellent contender for the best cryptocurrency tax software in 2021 and beyond.
Supported Exchanges / Brokers
Zenledger integrates with anything relevant in the world of cryptocurrency exchanges and wallets. And they keep adding more integrations by week. They currently support over 400 wallets including:
- Coinbase
- Kraken
- Gemini
- Exodus
- Jaxx
- BitPay
- Electrum
- Copay
- Bitcoin Expert
- MyEtherWallet (MEW)
- and others on supported blockchains
- Trezor
- Ledger Nano
- Keep Key
- Ledger Blue
- Ledger HW
- Bitlox
- Bitlox Digital
- and others on supported blockchains
- Abra
- Airbitz
- BRD
- Copay
- Mycelium
- and way more
Cryptocurrency-tax.info – Find Out Your Country’s Crypto Tax Rate
CLICK ON THE MAP TO LEARN ABOUT CRYPTO TAXES IN YOUR AREA (FREE TO USE)
TAX RATES ARE DIFFERENT EVERYWHERE !
This is a great website to find tax information and services relating to crypto trading in your area. You can click on the map to find the tax rates of your country.
After clicking on a country, the map zooms in and an information box appears answering questions such as “What is the tax category? “How much is the tax rate?”, “Which tax events are taxable?”, as well as if there are any special tax rules and more. In cases where you do not reside in a country supported by one of the services above, you might need this map.
This map is completely free to use. The website also offers a free service that allows you to subscribe to their email list for regulatory updates that may be useful to you.
These are the four websites we can recommend. Hopefully, either of these will be useful to you. The good news is that you can sign up for free and check them out.
