Crypto traders often start buying and selling crypto casually. They may have a handful of transactions from a single exchange. At this phase, most people can do their crypto taxes by hand.
However, the complexity of crypto taxes mushrooms as you add in token-to-token transactions and trades across multiple exchanges. People with dozens or hundreds of buy-sell transactions may spend hours just looking up the cost basis for their transactions.
If you’re a Crypto trader, a tool like CryptoTrader.Tax can save hours at a modest price point. Here’s what you need to know about this crypto tax software.The service integrates with all the major cryptocurrency exchanges and with two tax software companies as well. Here’s what traders need to know about this service.
- Calculate taxes due on all cryptocurrency transactions
- Works with 45+ exchanges and wallets
- Integrates with TurboTax and TaxAct for easy tax filing
Cryptocurrency Tax Reports
$49 to $299
Tax Filing Included
Some Crypto Tax Basics
For the sake of the IRS, crypto tokens and NFT are treated as securities (think stocks). Each token has a cost basis which is the value of the token (in $USD) at the time of purchase. You realize gains or losses (called capital gains or capital losses) when you sell the token (or NFT).
The gain or loss realized depends on the value of the token at the time you sell it. For example, a trader purchased 10 BTC on January 1, 2019. At the time, BTC was worth $7,175.50. The trader’s cost basis in this transaction is $71,755. This is the cost basis, even if the trader paid using another token.
This trader sells all 10 BTC on July 20, 2021, for $29,789.94 per token. The amount realized is $297,899.40. The IRS considers this amount realized, even if the trader receives payment in the form of another crypto token. On this transaction, the trader incurs a long-term capital gain of $226,144.40. The IRS will tax the trader on this basis.
If you received cryptocurrency for work you did (including mining for cryptocurrency), the value of the currency is taxed as ordinary income. Additionally, interest earned on cryptocurrency is taxed as ordinary income.
What Is CryptoTrader.Tax?
Founded in 2017, CryptoTrader.Tax is the original flagship product of CoinLedger, a Kansas City company.
The product is designed to make crypto tax calculations easy. It allows users to import transactions from dozens of crypto exchanges. Then it calculates the capital gains for all the transactions, using IRS-acceptable accounting practices.
The company generates Form 8949 for cryptocurrency and it offers custom integrations with TaxAct and TurboTax.
In 2022, we named CryptoTrader.Tax the best software for Everyday Traders in our annual ranking of the Best Crypto and NFT Tax Software.
CryptoTrader.Tax - Is It Really Free?
CryptoTrader.Tax has a free start option for all of its pricing tiers. As a user, you can ensure that the product will work for you before you pay for it. The free pricing also includes report previews. However, users must pay to download the reports or to integrate with TurboTax or TaxAct.
What’s New In 2022?
In 2022, CryptoTrader.Tax is still an easy-to-use software with API integrations with many crypto exchanges. This year, CryptoTrader has cleaned up many API integrations, making the software easier to use for the average trader. The company still supports manual uploads as well.
CryptoTrader has also expanded the number of exchanges it supports. The full list of exchanges supported is here. If a trading pair is supported by the exchange, CryptoTrader will calculate the taxes for it.
CryptoTrader.Tax is also launching a rebrand as CoinLedger. CoinLedger intends to unveil several new crypto products, but the new site is not yet open.
Does CryptoTrader.Tax Make Tax Filing Easy In 2022?
CryptoTrader.Tax dramatically simplifies tax filing for active crypto traders. The software supports API integrations from dozens of exchanges and it has clear workarounds for things like mining income, interest income, airdrops, and gifts.
If you have more than a dozen sell-side transactions this year, it makes sense to consider CryptoTrader.tax for tax filing. It is an added cost on top of typical tax software, but it will save a ton of headache, especially if you use multiple exchanges.
CryptoTrader.Tax Notable Features
No matter which crypto exchange you use, you should be able to connect it and import your trading data.
Once your data has been imported, CryptoTrader.Tax helps to classify transactions as either capital gains or ordinary income transactions.
Then it establishes the Fair Market Value for each relevant transaction. That means it converts the value of the transaction from cryptocurrency to US Dollars. Finally, it transfers the income to forms that can be reported on your tax software. Here's what else the software offers:
CryptoTrader.Tax allows users to connect to APIs using an API secret in most cases. This makes it easy to download tons of history with minimal effort by users.
CryptoTrader.Tax has dozens of articles that explain exactly how to connect to the exchange API or import files from the exchanges. The site outlines “gotchas”, so users won’t make common errors.
Integrates With TurboTax And TaxAct
All users can try out CryptoTrader.Tax for free. Users only pay when they want to download their reports.
However, we've found that you quickly escalate to a high tier, simply because transaction volume can be suprisingly high if you're buying, selling, trading, and using crypto.
CryptoTrader.Tax Notable Drawbacks
CryptoTrader.Tax has only a few drawbacks for crypto traders seeking easy tax solutions.
No Free Tier
CryptoTrader offers free trials, but all users have to pay. ZenLedger and CoinTracker both offer free reports for filers with fewer than 25 transactions.
Some Exchanges Have Messy Integrations
CryptoTrader.Tax provides clear guidance on how users should connect to APIs or import files from the various supported exchanges. However, some exchanges (particularly Binance) require “workarounds” that can be frustrating to use.
We also found that Gemini has issues in connecting accurately with CryptoTrader.tax.
How Much Does CryptoTrader.Tax Cost?
CryptoTrader.Tax prices are based on the number of trades you place. A trade includes buying, selling, or making coin-to-coin transfers. These fees are paid annually, once per tax season.
Number Of Trades
Up to 100
Up to 1,500
Up to 5,000
You can import your data to CryptoTrader.Tax for free. You only have to pay once you're ready to view and download your full report. The company also offers a 14-day money back guarantee. Within that period, you'll be eligible for a full reimbursement if you're not satisfied with your report.
How Does CryptoTrader.Tax Compare?
CryptoTrader.Tax is the original crypto tax software and it's a leader in user experience. Most traders will be able to dramatically simplify their tax filing thanks to CryptoTrader.
CryptoTrader.Tax is also priced competitively. TaxBit supports a few more exchanges than CryptoTrader, but both support the major exchanges. TaxBit’s lowest pricing tier allows for up to 250 trades compared to CryptoTrader’s 100 trade limit, but they're otherwise comparable in price. ZenLedger and CoinTracker both have a free tier with a 25 trade limit but are otherwise comparable.
CryptoTraders who only use CoinBase, Cash App, or Robinhood may not need a standalone service like CryptoTrader.Tax. TurboTax can already integrate directly with these exchanges to calculate your owed taxes.
Day Trader $99
High Volume $199
Is It Safe And Secure?
CryptoTrader.Tax is built with security in mind. The company never stores personal information in its databases, and it processes all payments through a third-party, Stripe. The read-only APIs that CryptoTrader uses do not give it access to private keys or other personal information. Additionally, the software encrypts all information in transit and at rest.
However, the company did suffer a data breach in 2020 in which 1,000 email addresses were stolen. Specific information beyond that was not stolen.
Crypto traders are used to dealing with a certain level of security risk. It's never perfectly safe to use a third-party tool. However, CryptoTrader.Tax has all the systems and measures in place to reduce the likelihood that your information will be stolen or end up in the wrong hands.
How Do I Contact CryptoTrader.Tax?
For 2022, CryptoTrader.Tax is offering live chat support on all of its tiers. You can also email them at email@example.com. The company does not publish a customer service phone number.
CryptoTrader.Tax has received overwhelmingly positive reviews on Trustpilot. Its average rating is currently 4.8/5 from over 200 customer reviews.
Is It Worth It?
CryptoTrader.Tax is the leading crypto tax software for a reason. It's easy-to-use, robust, and priced competitively. Filers who want explicit support for margin trading may want to choose another platform, but CryptoTrader.Tax offers a simple tax solution for crypto traders in 2022.
Let's answer a few of the most common questions that people ask about CryptoTrader.Tax:
Can CryptoTrader.Tax help me file my crypto investments?
CryptoTrader.Tax can help crypto traders prepare their crypto taxes quickly and easily. However, unlike tax software companies like TurboTax or H&R Block, CryptoTrader.Tax cannot actually file your taxes on your behalf with the IRS.
Can CryptoTrader.Tax steal my crypto?
No, CryptoTrader.Tax uses a read-only API to collect information about your crypto exchanges. It does not gain access to your private keys. For an added layer of security, you can transfer your keys to a hardware wallet before filing taxes.
Do I need to report my crypto wallet transfer data to the IRS?
Simply transferring cryptocurrencies from one wallet to another does not trigger a taxable event. However, if you made trades, earned interest or staking rewards, or incurred any other type of taxable event inside your wallet, these events will need to be reported.
Can international traders use CryptoTrader.Tax?
Yes, the company says that it can generate crypto gains, losses, and income reports in any currency.
DeFi Protocols Supported
Tax Filing Included
Tax Software Integrations
Audit Trail Report
Customer Service Options
Chat or email
Customer Service Email Address
Mobile App Availability
Web/Desktop Account Access
Products and Services
Ease of Use
CryptoTrader.Tax is a crypto tax software platform that imports trade data from exchanges to create downloadable tax reports.
- Seamless integration with the leading wallets and exchanges
- Secure API connections
- Robust directions and how-to guides
- TurboTax and TaxAct “Direct Import”
- You’ll still need to pay for another tax software to file your return
- Some information (like gifts) must be manually entered
Robert Farrington is America’s Millennial Money Expert® and America’s Student Loan Debt Expert™, and the founder of The College Investor, a personal finance site dedicated to helping millennials escape student loan debt to start investing and building wealth for the future. You can learn more about him on the About Page, or on his personal site RobertFarrington.com.
He regularly writes about investing, student loan debt, and general personal finance topics geared towards anyone wanting to earn more, get out of debt, and start building wealth for the future.
He has been quoted in major publications including the New York Times, Washington Post, Fox, ABC, NBC, and more. He is also a regular contributor to Forbes.