Since 2014, the IRS has required all cryptocurrency traders (and miners) to report and pay taxes on their income.
For the casual trader, figuring out the value of a few Bitcoin transactions may not be a big deal. However, frequent crypto traders and miners may want to look for a software solution to keep their tax returns accurate.
CryptoTrader.Tax is one of the first bookkeeping companies to specialize in crypto trading taxes. 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 all major exchanges and wallets
- Integrates with TurboTax and TaxAct for easy tax filing
Cryptocurrency Tax Reports
$49 to $299
Tax Filing Included
Cryptocurrency Tax Basics
Cryptocurrency is an asset that is treated as property by the IRS (even though it refers to it as "virtual currency"). Each time you trade cryptocurrency (including selling one currency for another), the transaction is a potentially taxable event.
If the value (in US Dollars) of the cryptocurrency increased between the time you bought and sold the cryptocurrency, you’re expected to pay capital gains taxes on the currency. 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.
One wrinkle to this puzzle is that taxation depends on the US Dollar value of the calculation. Traders need to hunt down the US Dollar value of each transaction at the time of the transaction. Hunting down all these valuations can be time-consuming, especially if you buy and sell on multiple exchanges or have multiple wallets.
What Is CryptoTrader.Tax?
CryptoTrader.Tax is a niche tax product that makes it easy to calculate the taxable burden of all cryptocurrency transactions. And it doesn’t just support crypto trading. It calculates taxes for mining, interest, airdrops, forks, staking along with the trading activity.
The company was founded in 2017 by David Kemmerer, Lucas Wyland, and Mitchell Cookson and is headquartered in Kansas City, Missouri. CryptoTrader.Tax has quickly grow in popularity and is already used by over 50,000 traders to report their crypto taxes.
How It Works
If you’re someone who only sold one coin, on one exchange, one-time last year, you probably don’t need software like CryptoTrader.Tax. In fact, CryptoTrader.Tax has a great guide that shows readers how to calculate crypto taxes on their own. You can look up the US Dollar value of that transaction and add it to a Schedule D on your own.
By contrast, someone who had dozens of trades, earned interest, and received a few airdrops will face difficulties calculating their taxable burden by hand. This is where CryptoTrader.Tax comes in.
First, the software allows you to connect to dozens of crypto exchanges and wallets.
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.
How Much Does CryptoTrader.Tax Cost?
CryptoTrader.Tax has four pricing tiers. The primary difference in pricing is the number of transactions each tier supports. Each level creates a Form 8949 for users, capital gains reports, minimizes taxes through tax-loss harvesting, and can be directly exported to TurboTax and TaxAct.
Number Of Trades
Up to 100
Live chat support
Up to 1,500
Live chat support
High Volume Trader
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.
Is It Worth It?
CryptoTrader.Tax costs as much or more than most tax-filing software, even though it doesn't actually file taxes for you. It does integrate with TurboTax and TaxAct, but may still have to pay $100 or more to file your taxes using those services. So is it worth the money?
For active cryptocurrency traders, the answer will often be, “Yes!” Many traders don’t keep detailed records that allow them to generate these reports on their own. If you do, that’s great. You can easily file using any tax software.
But if you've been trading crypto all year and just now (at tax time) are realizing that you should have been tracking your losses and gains, you'll need a service like this to help you file an accurate return. And while CryptoTrader.Tax isn't cheap, its price tiers are in line or lower than competitors like TokenTax.Co and ZenLedger.Io.
Tax Filing Included
Tax Software Integrations
Audit Trail Report
Customer Service Options
Chat or email
Customer Service Email Address
Mobile App Availability
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 wallets and exchanges
- Slightly less expensive than alternatives
- TurboTax and TaxAct “Direct Import”
- Doesn’t include actual tax filing
- No priority support for lower price tiers
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.