Bitcoin accounting and crypto tax softwares help in filing your tax on Bitcoin and monitor your all crypto-related financial transactions at a single place.
In this article, we will discuss different Crypto accounting and tax softwares and their features.
I use crypto, do I need to pay taxes?
You need to pay taxes if you:
- Exchanged Bitcoin (or any altcoin) for any other coin for any product, service, or another coin.
- Used crypto to purchase goods or services.
- Obtained your crypto via mining, staking
- Trade or transact crypto after holding more than a year
- Accept salary in crypto
Also Read: Cryptocurrency Tax – 5 Questions You Need To Be Asking
What is Bitcoin Accounting and Taxation software?
Bitcoin accounting and crypto tax software aggregate all Bitcoin trades, payments, and other transactions by integrating with your exchanges, wallets, and other applications.
These softwares also allow you to classify transactions as specific events such as staking, lend, borrow, airdrops, trade, payment, etc.
Usually, these softwares support all mainstream cryptocurrencies. So we will call them crypto accounting and tax softwares throughout the article.
Crypto accounting and tax softwares analyze and track your portfolio. and you can print tax reports that calculate your taxable events.
You can also see all tax information such as profits, losses, and fees that are relevant for your countries tax rules.
In simple words, these software help you to file your tax on Bitcoin other crypto activity.
Features of Bitcoin Accounting and Crypto Tax softwares
Let’s discuss some important features of a Crypto tax softwares.
1. Tax Loss Harvesting
Tax Loss Harvesting is a practice that helps you see your unrealized gains and losses are. So you can strategically sell off assets at a loss to reduce your taxable gains.
2. Tax methods support
Government tax agencies require taxpayers to choose an accounting method that accurately reflects their income and to be consistent in their choice of accounting method from year to year.
While selecting a crypto tax software, you need to check if it supports the accounting method of your need. A few examples of these accounting methods are FIFO, LIFO, AVCO, and ACB.
Reporting is one of the essential features. Accounting and tax softwares provide extensive reporting on your trades, current assets, capital gain, and losses.
4. Tax reports
The goal of using tax software is to generate tax reports to file your tax on Bitcoin and other altcoins. These reports should be generated based on your country’s tax rules. Most of the accounting and tax softwares support multiple counties.
5. Tax professional suite
Some crypto tax softwares allow you to track multiple accounts. It is best suited for CPAs and accounting firms with many customers.
6. Accounting software integration
Crypto tax software also integrates with traditional tax softwares such as TurboTax so that you can analyze all your crypto and fiat transactional in one place.
7. Tax Optimizer
Tax optimizer provides suggestions to save money in taxes by letting you change tax methods on the fly to optimize your capital gains and losses.
These softwares integrate with cryptocurrency exchanges, wallets, and other applications to import your financial transactions and trades.
You can also import your transactions using a CSV file or manually add other types of transactions.
9. Portfolio Tracking
Crypto tax softwares tracks your complete portfolio to display, analyze, and monitor all your financial transactions in one place.
Here are different types of crypto transactions.
- Fee tracking
- Margin trading
- Defi transactions (ex- Lending, borrowing or capital gains)
- Mining and staking profits
- Standard trades and wallet transactions
- Payments and Donations
Top 6 Crypto Tax Softwares
Accointing integrates with multiple cryptocurrency exchanges, wallets and supports more than 6000 currencies (crypto and fiat). It has both a desktop and mobile versions.
Accointing tracks your crypto portfolio and provides an extra feature to see holding periods of different cryptocurrencies. It also has a tax optimizer, and you can generate tax reports using accointing with one click.
Also read our Accointing review.
CoinTracker integrates with more than 300 exchanges and wallets and supports 2500 cryptocurrencies. It can also track Defi, margin trading, and other complex crypto transactions.
The software automatically tracks your portfolio in real-time, and you can generate tax reports based on your country’s tax laws.
Also read CoinTracker customer reviews.
TokenTax supports all mainstream cryptocurrency exchanges and integrates with TurboTax. It is built for professional accountants, which means it can track multiple accounts for different entities or individuals.
The software allows portfolio tracking and country-wise tax reports. It has a Tax Loss Harvesting Dashboard, which shows your unrealized gains and losses are so you can sell off assets at a loss to reduce your taxable gains.
Other than supporting standard trades and transactions, It is also capable of tracking Margin trading, Defi transactions, ICO, Crypto Mining.
Also read out TokenTax review.
CoinTracking is one of the most famous Bitcoin accounting and crypto taxation software out there. It supports 70+ cryptocurrency exchanges and wallets.
You can analyze your trades and generate profit/loss & audit reports. It supports more than 12 accounting methods and multiple countries. You can also see historical charts for more than 7000 cryptocurrencies and generate tax reports for them. CoinTracking also provides various balances and trade reports.
Also read our CoinTracking review.
CryptoTrader.Tax is a professional accounting and taxation software that allows trade imports from multiple cryptocurrency exchanges. It also integrates with TurboTax.
The software supports tax-loss harvesting and provides extensive trade reporting.
Also read CryptoTrader.Tax customer reviews
The only opensource cryptocurrency portfolio tracker, accounting, and analytics tool that enables you to take ownership of your financial data and respects your privacy.
Rotki’s mission is to bring transparency into the crypto and financial sectors through the use of open source. Unlike similar tools it’s a local application allowing users to own their financial data.
Rotki supports multiple exchanges, DeFi tax reporting and portfolio analysis.
Governments all over the world are monitoring crypto and creating regulations and laws. So if you are using crypto, it is best to consult an accountant to see if you have any tax liabilities
Nothing makes the government happy than a law-abiding citizen, and you don’t want to piss-off governments, or do you?
Let us know your thoughts in the comment section and if you are using any accounting softwares, write a review for it on CoinCodeCap.