Crypto traders often make hundreds or even thousands of trades each year. Whether traders exchange fiat for tokens or tokens for tokens, each trade results in a taxable event.
TaxBit recognizes that traders often fail to track the taxes on each trade. As a result, traders may get hit with huge tax bills at the end of the year.
TaxBit tries to prevent this problem by providing traders with real-time tracking of profits. It also creates free tax-optimized tax forms for crypto traders filing in the United States. Here’s how the software works.
- Get free automated tax forms across 500+ platforms
- Above-average security measures
- Paid plans offer advanced features for $50-$500/yr
Cryptocurrency Tax Reports
$0 to $500/yr
Tax Filing Included
What Is TaxBit?
Launched in 2018, TaxBit is a crypto tax software designed to take the mystery out of crypto taxes. The company, located in Salt Lake City, UT provides real-time insights into the tax implications of crypto trades. It also generates IRS Form 8949 or IRS Form 1099 for crypto traders.
While TaxBit isn’t the oldest crypto tax filing service, it's one of the best-funded. Its backers include PayPal Ventures, Winklevoss Capital, and other big-name investors.
In 2022, we named TaxBit the best tax software for Ongoing Support in our annual rankings of the Best Crypto and NFT Tax Software.
TaxBit - Is It Really Free?
Yes, TaxBit is free if you're a user of one of the 500+ exchanges, wallets, and DeFi protocols that are part of the TaxBit Network. Paid plans, which provide advanced features, come with a 14-day free trial.
What’s New In 2022?
The College Investor has not reviewed TaxBit before 2022. The company’s most recent round of funding was in March 2021. In January 2022, the company announced the launch of the TaxBit Network, which could mean that you can now use the software free if you use one of over 500+ supported platforms.
Does TaxBit Make Tax Filing Easy In 2022?
TaxBit is designed to make tax filing easy before and during the tax season. The company generates forms 1099-B and IRS form 8949 for each software user. While TaxBit can't actually file your taxes for you, these forms can be imported into mainstream software programs like TaxAct or TurboTax.
And TaxBit’s efforts at easing tax time don’t stop there. The company provides real-time reports that show a user’s estimated tax burden. This proactive reporting will help users properly withhold taxes
TaxBit Notable Features
While TaxBit is relatively new to the crypto tax game (founded in 2018 rather than 2017 like most of its competitors), it boasts advanced software that competes on nearly every level. Here's a quick look at what it offers.
Free Tax Forms Via The The TaxBit Network
The recently-announced TaxBit Network includes 500+ crypto exchanges. That's one of the largest list of supported platforms that we've seen from a crypto tax software company.
But it's even more impressive is that if you use one of these platforms, you can generate basic crypto tax forms with TaxBit for free with no transaction limits. This is a huge update as most all other tax software right now have strict transaction limits on their free plans (if they have any at all).
Behind the scenes, the companies that are part of the TaxBit Network are paying so that they can give their users access to the company's software. This is similar to how health insurance networks works. But for the consumer, the software will be accessible for free.
Users who opt for the Plus+ or Pro tiers are eligible for tax-optimized reports. The reports, which take advantage of tax-loss harvesting rules to minimize the overall tax burden for active crypto traders.
TaxBit provides real-time reporting for crypto traders. This reporting shows more than just a portfolio's value. It also shows the taxable gains associated with each trade. With this reporting, traders can avoid huge tax bill surprises the next time they file.
Reviews And Audit Support From CPAs
If any user is audited, that user is entitled to audit support from a TaxBit CPA. Additionally, all Pro users can schedule an annual phone call with a CPA to review their forms before filing.
TaxBit Notable Drawbacks
TaxBit is a robust software that is both competitively priced and easy to use. However, it has a few drawbacks, which we break down below.
Tax-Loss Harvesting Not Available Until Plus+
Tax optimization strategies such as tax-loss harvesting aren’t available on the low-cost Basic tier. Traders need to upgrade to Plus+ to access this cost-saving option.
Plus+ Is More Expensive Than Comparable Levels
TaxBit’s Plus+ level costs $76 more than CryptoTrader’s Day Trader tier. Since both offer similar services (at least at tax time), the Plus+ tier may not be worth the money.
DeFi Is In Beta Mode
Most crypto traders start with Centralized Finance (CeFi) or trading through crypto exchanges. However, “smart” contracts and other forms of Decentralized Finance (DeFi) are becoming more popular. Support for DeFi transactions is still in Beta. This could be a significant drawback if you use a Decentralized Exchange (DeX).
How Much Does It Cost?
Providing that you used one of the exchanges that are part of the TaxBit Network, you can use the Free plan, regardless of the number of transactions you had last year. But this plan doesn't support historical tax forms or certain advanced features like NFT Suite and Tax-Loss Harvesting.
If you need any of those options, you'll want to upgrade to one of TaxBit's paid plans. Plus+ and Pro offer many robust features including and an annual review from a CPA (Pro only).
Number Of Trades
Notable Added Features
Support for platforms that are outside of the TaxBit Network
Support for tax-loss harvesting, DeFi, and prior years
Review from a CPA
How Does TaxBit Compare?
TaxBit’s Free level is one of the best values in the business. It's Pro level is a great deal too as it includes all previous years and an annual review from a CPA. People engaged in high-volume crypto trading should absolutely consider this option.
But traders with fewer than 2,500 transactions who need access to historical forms or tax-loss harvesting may find better value elsewhere. CryptoTrader.Tax, for example, offers a great deal for people with up to 1,500 Trades (Day Trader tier for $99). Here's a closer look at how TaxBit compares.
$0 to $500/yr
$49 to $299/yr
$0 to $399/yr
$0 to $199/yr
Tax Software Integrations
TurboTax & TaxAct
TurboTax & TaxAct
TurboTax & TaxAct
Is It Safe And Secure?
TaxBit boasts security measures that go beyond the accepted practices within the crypto community. The company has achieved an independent SOC 2 certification. That means it has better than typical security practices to keep user information safe.
Of course, the large number of capital investors will make TaxBit a valuable target for hackers. So this level of security may be required.
As with all software, TaxBit could suffer a security breach and user information could be leaked. While this is unlikely to cause users to lose their crypto, the loss of identifiable information could be a loss. Traders should do their own security assessments before using any tax software.
How Do I Contact TaxBit?
TaxBit doesn't publish a customer service phone number. However, it does have a robust Help Center and offers Live Chat and email support on all of its plans. The customer service email address is email@example.com.
If you subscribe to the Pro plan, you'll also get a one-on-one review of your tax report with a CPA. You can reach out to the customer support team via chat or email to schedule your appointment.
TaxBit has received mostly glowing customers reviews on Trustpilot. Out of more than 320 reviews, its average rating is currently 4.3/5.
Is It Worth It?
TaxBit offers plenty for crypto traders to love in 2022. The unlimited free tier is currently unmatched in the industry. And the real-time reporting and annual CPA review that available with the Pro plan are features that few other companies are offering.
Traders with fewer than 1,500 trades who want to take advantage of tax-loss harvesting are likely to prefer CryptoTrader.Tax which has better pricing and more DeFi support. However, TaxBit is a slam dunk for just about all other active crypto traders.
Let's answer a few of the most common questions that people ask about TaxBit:
Can TaxBit help me file my crypto investments?
TaxBit is designed to help users with CeFi (exchange-based) crypto investments. The company’s DeFi support is still in Beta, so NFT users may want to choose an alternative platform.
Can TaxBit steal my crypto?
No, TaxBit allows users to upload CSV information about their trading activity or users can connect to exchanges using a read-only key plus their secret. TaxBit does not store any information that would allow the company to steal your tokens. However, we continue to recommend that users opt for Hardware wallets to store their crypto.
Does TaxBit work with Coinbase?
Yes, Coinbase is one of the more than 480 crypto exchanges that TaxBit currently supports. Coinbase Pro is also supported and both platforms can be connected via API.
Can international traders use TaxBit?
TaxBit says that its tax engine is currently configured to help users who file returns with IRS, however users from outside the United States have reported that they've been able to use the software without issue.
Tax Filing Included
Tax Software Integrations
Cost Basis Methods
Audit Trail Report
On Plus+ and Pro plans
Margin Trading Support
IRS Audit Assistance
Yes, 14 days
Refunds can be requested at any time as long as you have not downloaded your tax form or exported 2,500+ transactions.
Customer Service Options
Live chat, Email, Help Center
Pro users receive a one-on-one review from a CPA
Customer Service Email Address
Mobile App Availability
Web/Desktop Account Access
Products & Services
TaxBit is a crypto tax software that is backed by PayPal Ventures and other big-name investors and places a heavy emphasis on security.
- Main feature are free for users of supported TaxBit Network companies
- Independent security certifications
- Pro users receive CPA review
- All users receive CPA support in the event of an audit
- DeFi support is still in Beta
- Tax-loss harvesting is not available on the Free or Basic plans
Hannah is a wife, mom, and described personal finance geek. She excels with spreadsheets (and puns)! She regularly explores in-depth financial topics and enjoys looking at the latest tools and trends with money.