What is the best crypto tax software?
In this guide we will provide some ideas to help you figure out what is the best crypto tax software.
Generally, there is no one solution that fits all. What crypto tax software fits your needs depends on a variety of details that only you can answer.
Figuring those out can help you find the tool you need, obtain all the forms you need to provide the tax agency and even save good money!
Best tax software for whom and where?
The first question you should answer is on which country you should report your taxes. This is one of the key factors because depending on it, there might be more or less options available. For example, countries like United States and Australia are generally well supported having most of the tools providing the forms the tax authorities would be expecting. If you are to report taxes to less supported countries you might fall under the “international support” that many tools provide varying in options available.
The second question is whether you are a business or a individual person. Countries have different tax regulation based on this and there’s very different tools. In case of being an individual person, you can likely find many tools available for using yourself. If you are a business, you likely will have to find a tool with good certified public accountant (CPA) support.
What sort of trading have you done?
To understand which tool would provide the features that better meet your needs, you first have to ask what sort of trading have you done and what are the particular conditions of your tax declaration. Questions like the ones listed below could be a great start.
- How many trades have you done in the taxable year? Do you have a rough estimate? Each buy/sell is consider a trade and will be counted towards a limit most services use for pricing. Knowing if you are in the 10s, 100s or 1000s of transactions will be useful.
- Where do you have your transaction history? Is it in an exchange, wallet, or decentralized exchange? Depending on this and your trade volume, you might need services that automatically import everything or you might be good by adding trades manually.
- Have you participated in an initial coin offering (ICO) and/or sold cryptocurrencies from an ICO? This is quite important because some services support better the reporting of ICO investments.
- Has any of your cryptocurrency holdings gone through a hard fork? This situation makes you suddenly holder of both cryptocurrencies as a result of the hard fork. Depending on the regulation of your country, this might be taxed in different ways and some services have better support for it.
- Have you received any airdrop? Airdrops are taxed different in different countries. Some countries even differentiate if you have actively requested the airdrop or if it was gifted to you without you doing anything.
- Have you participated in staking? Depending on the staking method you have used you might be taxed differently.
- Have you done margin trading? Some services have better support for this type of practices.
How are you reporting your taxes?
In many countries, it is a common practice to use web or desktop applications for reporting your taxes. Examples could be TurboTax, TaxAct, Drake Software, WiSo or smartsteuer among many others.
If this is the case, you might be interested in finding the crypto tax service that better supports your use case and allows you to export your trades in the format required. If you are filing yourself without any specialized software or through a certified public accountant, you might want to look for services that provide the specific forms the tax authorities are looking for.
What level of support are you expecting?
Different services have different levels of support. From simple chat/email interactions with the support team, to the possibility to have a certified public accountant handle your case specifically helping you complete your reporting and filing the taxes for you.
Once again, what is important for you would guide you through the sea of tools available.
Once you have gather some of this information, take a look at Crypto.Tax to find out which of the many tools available would be best for you and even obtain discounts through referral links.