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Cryptocurrency has become popular quickly because of its high-profit potential and frequently appreciated values. Regardless of how interesting and lucrative cryptocurrency trading can be, calculating your profits and loss and recording transactions for tax payment can be nerve-racking.
However, using crypto tax software as your crypto tax calculator relieves you from errors and time consumption associated with the manual calculation of crypto tax.
This article will enlighten you on the 10 best crypto tax software to calculate your profit and loss and avoid calculation errors.
Tax software allows you to manage, track and calculate the profits of your exchange operation and crypto transaction for tax payments. Without cryoto tax software, completing your crypto taxes yourself may be a long and arduous process.
Every time you sell, trade, or otherwise dispose of cryptocurrency, you are realizing a taxable event. For many investors and traders, especially high volume traders, this makes reporting crypto taxes a challenge. However, crypto tax software helps in three major ways:
Every exchange reports purchases, trades, and sales in different formats. But for your tax reporting, this data needs to be standardized, organized, and sorted.
This can be tedious if you need to track hundreds or even thousands of trades from multiple exchanges. Crypto accounting software automatically imports data from exchanges and keeps them in one ongoing record.
To report your crypto taxes, you need to establish the fiat cost basis of each asset, as well as the fiat value equivalent of all sales, trades, or other transactions.
Cryptocurrency accounting software can handle this process automatically by tracking down the fiat value prices per coin on the date of each transaction.
After standardizing your tax data, purchases and sales need to be paired via an accounting method like FIFO or LIFO to calculate your capital gains or losses. More complicated situations, like DeFi loans or margin trading, will require special attention.
Crypto and bitcoin tax software will automatically use all the IRS-accepted accounting methods to link your cost basis with corresponding trades to calculate the capital gains or losses for the current tax year. It can also reconcile previous years’ data if your tax professsional determines it needs to be amended.
Capital gains and losses and their associated dates and cost basis must be formatted into a tax report. Crypto tax tools take the data and calculations and automatically construct standardized tax forms, like Form 8949 for U.S. filers or international tax reports for filers in many other countries.
It’s important to keep track of your gains and losses throughout the year to prepare to pay your taxes come tax season. You’ll want to know what tax liability you have incurred and what unrealized gains or losses may occur by the end of the tax year. You can also use crypto accounting software to harvest your losses to reduce your taxes.
Many tax software has been invented, but users’ best Crypto software reviews have been collated for our readers.
Here is the list of the best crypto tax software in 2023.
List of the Best Crypto Tax Software in 2023:
This is one of the best crypto tax software that offers incredible value. It is a crypto tax calculator trusted by over a hundred traders and supports over ten thousand cryptocurrencies. When using CryptoTrader.tax, you will be given stepwise assistance when making transactions and importation that may attract a tax charge.
After each crypto transaction or importation, your tax form will automatically be published on a professional dashboard where you can view and download it.
Its features are unique; therefore, it’s the first on our list
CryptoTrader.tax has one of the best crypto tax software reviews. Therefore, earning interest, staking and trading have gotten better by the use of CryptoTrader.tax to calculate your taxes with relief.
Price: Price ranges from $49 to $299. And they offer a 14-day refund guarantee.
if you are looking for the best crypto tax software to engage easily with your exchanges and wallets, go for Koinly. With this software, you can vividly see an account for your invested money across various platforms.
Affirming taxes can be stressful and painstaking if you have multiple exchange accounts and wallets. But when you use Koinly as your crypto tax calculator, your exchange account will be connected and Koinly will figure out your capital profits. Then, your tax will be presented in a format that is acceptable by all tax agencies.
Price: Price ranges from $49 to $279
TokenTax is popular for its accounting, offering an easy integration significance. It is a crypto tax calculator perfect for calculating complicated taxes for your tax filing with an automation feature that makes reporting easy to handle and very simple.
This software allows the collection of crypto trading data easily while making crypto tax returns very easy to file.
It is important to note that TokenTax enables connection to all major crypto exchanges, and it is the best crypto tax calculator that can perform this function.
Here are the features of TokenTax software:
TokenTax is the best tax software geared for crypto tax liabilities, particularly working with the current popular exchange in the market.
Price: Price ranges from $65 to $2500 tax per year
Accointing is the best crypto software to get a summary of the market and trail coins on your watchlist. It has a remarkable user experience and an insightful dashboard accessible on both desktop and mobile to enable you to trail your transactions and performance.
It has one of the best crypto software reviews, and its free version is useful for novice traders, with only 25 transactions report.
Price: Price ranges from $199 to $299, with $79 for a year license
ZenLedger is the best crypto tax software focusing on tax accounting and Management. It assists tax professionals and crypto investors file crypto tax and financial analysis. This is done by delivering a digital workflow to automate, optimize, and simplify accounting and tax processes.
With ZenLedger crypto tax software, you can aggregate trade information across many tokens, wallets, and exchanges into a single dashboard. And its crypto tax calculator functions with the task of finalizing tax.
ZenLedger is a unique crypto tax calculator and has one of the best crypto tax reviews
Price: Price ranges from $0 to $399 per year
CoinTracking is the best crypto software to track your real realized and unrealized profits, account taxes and generate reports on profit and loss. If you’re either a novice in trading or a professional trader, CoinTracking will track all your transactions.
It has almost 1000 users with one of the best crypto software reviews. Its tax reporting software is top-notch, giving users the utmost satisfaction.
Price: Price ranges between $10 per month to $54.99
If you’re looking for the best crypto software that is easy to use and can efficiently evaluate profits and file taxes on capital gains, Bear.Tax software is worth considering.
Its cryptocurrency exchange is incorporated through API exchange and the upload of files. It can correspond buys and sells, survey missing sources, estimate your gain-loss information, and strengthen trades.
This crypto software is endorsed and affordable.
Price: Price ranges from $10 to $200 for a year
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TaxBit relates the tax experience of the enterprise and consumer. It is the best crypto tax software for unifying tax reports and issuing 1099s. There is an interaction between the TaxBit Enterprise and TaxBit consumers to ensure you have a suitable experience across the platforms you use.
When using TaxBit, you wouldn’t have to do anything because TaxBit gives automation technology that automatically synchronizes your data and gives you a decisive tax report.
When making a crypto tax software comparison, note that TaxBit offers a unified experience.
Price: Price ranges from $50 to $500 each year.
Blox can manage and track your crypto portfolio in a precise and automated way. It is the best crypto tax software for multi-purpose functions. You can enjoy a lot of special features on this software some of which are;
Pricing ranges from $40 to $450
This is one of the crypto tax software that can trail your portfolio, saving you money through a tax-loss harvesting tool.
Your tax report can be exported to TaxAct or TurboTax
Price: The price range is between $59 to $199
Yes, it is taxable.
Taxes on long-term gains range from 0% to 20%, while taxes on short-term gain ranges from 10% to 37%.
Yes, because cryptocurrencies are considered property for federal income tax.
You can avoid paying taxes on your cryptocurrency by not selling crypto in a year.
Yes, it is recommended.
People are getting richer by simply trading and investing in cryptocurrencies. However, cryptocurrency is considered property by the federal government, thus attracting tax. Selecting suitable tax software can be tricky, so we collected the best crypto tax software in 2023 so that you can choose the appropriate tax software that suits your purpose.