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 grows 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 CoinLedger can save hours at a modest price. The service integrates with all the major cryptocurrency exchanges and multiple tax software companies including TurboTax, TaxSlayer, H&R Block, and more. 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 tax software platforms for easy filing
Cryptocurrency Tax Reports
$49 to $199+
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 token's value (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, let’s say a trader purchased 10 BTC on Jan. 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 sold 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 currency's value is taxed as ordinary income. Additionally, interest earned on cryptocurrency is taxed as ordinary income.
What Is CoinLedger?
Founded in 2018, CoinLedger is designed to make crypto tax calculations easy. It allows users to import transactions from hundreds of crypto exchanges. Then it calculates the capital gains for all the transactions using IRS-acceptable accounting practices.
In 2022, we named CoinLedger the best software for Everyday Traders in our annual rankings of the best crypto tax apps. Be sure to check out this year’s list of the Best Crypto and NFT Tax Software to compare.
CoinLedger - Is It Really Free?
CoinLedger 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 or integrate the reports with tax filing software.
What’s New In 2023?
The biggest change for 2023 is a new name. Formerly CryptoTrader.tax, this program now uses the name CoinLedger. For our two satoshis (which is the smallest unit in a single Bitcoin), that’s a nice little improvement.
In 2023, CoinLedger is still an easy-to-use software with API integrations with many crypto exchanges. This year, CoinLedger has created new integrations with blockchains like Solana and Polygon.
CoinLedger has also expanded the number of exchanges it supports. The complete list of exchanges supported is here. If the exchange supports a trading pair, CoinLedger will calculate its taxes.
In 2022, the IRS announced that NFTs would be considered taxable digital assets like cryptocurrencies. CoinLedger now offers NFT tax software that connects to your wallet, meaning you can track and report NFT transactions without uploading them manually.
Does CoinLedger Make Tax Filing Easy In 2023?
CoinLedger dramatically simplifies tax filing for active crypto traders. The software supports API integrations from hundreds of exchanges and 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 CoinLedger for tax filing. It is an added cost on top of typical tax software, but it will save many headaches, especially if you use multiple exchanges.
No matter which crypto exchange you use, you should be able to connect it and import your trading data.
Once CoinLedger imports your data, it helps to classify transactions as either capital gains or ordinary income transactions.
Then it establishes the Fair Market Value for each relevant transaction, meaning it converts the value of the transaction from cryptocurrency to US Dollars.
Finally, it transfers the income to forms you can report on your tax software. Here's what else the software offers:
CoinLedger allows users to connect to APIs using an API key in many cases. Where supported, API integrations makes it easy to download your account history with minimal effort.
API keys are like a secret password just for your crypto account. Once linked, CoinLedger can stay updated with your latest transactions.
CoinLedger 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 Tax Filing Software
CoinLedger allows users to integrate directly with several tax filing platforms, including TurboTax and TaxAct. No need to fill out the information twice. Simply connect the tax software to CoinLedger to save time.
Limited Free Trial
All users can try out CoinLedger 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 surprisingly high if you buy, sell, trade, and use crypto.
For example, if you’re staking three currencies with daily staking rewards payouts, you’re already at about 1,000 transactions per year from that alone. Adding active trading accounts, it’s easy to see how you could wind up with many thousands of transactions per year.
CoinLedger has only a few drawbacks for crypto traders seeking easy tax solutions.
No Free Tier for Taxes
CoinLedger offers free trials, but all users must pay to receive downloadable tax reports. ZenLedger and CoinTracker offer free reports for filers with fewer than 25 transactions.
Even if you’re not using the tax features, some may find the free crypto portfolio tracking useful as well. If you use CoinLedger for tracking your crypto wallets and exchange accounts, generating tax reports requires just a few clicks, and a payment.
Some Exchanges Have Messy Integrations
CoinLedger provides clear guidance on how users should connect to APIs or import files from the various supported exchanges. However, some require workarounds, such as downloading a .CSV file with your transaction records and then uploading to CoinLedger. The major exchange Crypto.com is among those requiring a .CSV file for crypto taxes.
How Much Does CoinLedger Cost?CoinLedger 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 1,000
You can import your data and track your portfolio with CoinLedger for free. You only have to pay once you're ready to view and download your full tax 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 unsatisfied with your report.
How Does CoinLedger Compare?
CoinLedger is the original crypto tax software and a leader in user experience. Most traders can dramatically simplify their tax filing thanks to CoinLedger.
CoinLedger is also priced competitively. TaxBit supports more exchanges than CoinLedger, but both support the major exchanges. Although TaxBit’s software is now free to individual investors, the company cut out many features and supported exchanges so that CoinLedger may be the better option for those needing more support. ZenLedger and CoinTracker both have a free tier with a 25 trade limit but are otherwise similar.
CoinLedger users who only use more popular exchanges like CoinBase, Binance, Gemini, or Robinhood may not need a standalone service like CoinLedger. TurboTax can already integrate directly with some of these exchanges to calculate your owed taxes.
High Volume $199+
Unlimited Priced Individually
Is It Safe And Secure?
CoinLedger is built with security in mind. The company never stores personal information in its databases and processes all payments through a third party, Stripe. The read-only APIs that CoinLedger 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 suffered a data breach in 2020 in which over 1,000 email addresses were stolen. The hacker did not steal specific information beyond that.
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, CoinLedger 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 CoinLedger?
For 2023, CoinLedger offers 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.
CoinLedger has received overwhelmingly positive reviews on Trustpilot. Its average rating is currently 4.8/5 from around 650 customer reviews. Most positive reviews share an easy experience putting crypto taxes together, while complaints tell horror stories of being charged more than expected and poor customer service. With far more good reviews, those who had negative experiences were in the minority.
Is CoinLedger Worth It?
CoinLedger 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 CoinLedger offers a simple tax solution for crypto traders in 2023.
Let's answer a few of the most common questions people ask about CoinLedger:
Can CoinLedger help me file my crypto investments?
CoinLedger can help crypto traders prepare their crypto taxes quickly and easily. However, unlike tax software companies like TurboTax or H&R Block, CoinLedger cannot file taxes on your behalf with the IRS.
Can CoinLedger steal my crypto?
No, CoinLedger 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?
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 CoinLedger?
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 Support
Tax Loss Harvesting
Customer Service Options
Chat or email
Customer Service Email Address
Mobile App Availability
Web Desktop Account Access
CoinLedger Review: Fast Crypto Tax Reports
Products and Services
If you’ve made dozens or even hundreds of crypto transactions and trades, you may consider CoinLedger to help during tax time.
- Seamless integration with the leading wallets and exchanges
- Secure API connections
- Robust directions and how-to guides
- Tax filing software “Direct Import”
- You’ll still need to pay for another tax software to file your return
- Some information (like gifts) must be manually entered
Eric Rosenberg is a financial writer, speaker, and consultant based in Ventura, California. He holds an undergraduate finance degree from the University of Colorado and an MBA in finance from the University of Denver. After working as a bank manager and then nearly a decade in corporate finance and accounting, Eric left the corporate world for full-time online self-employment.
His work has been featured in online publications including Business Insider, Nerdwallet, Investopedia, The Balance, Huffington Post, and other financial publications. When away from the computer, he enjoys spending time with his wife and three children, traveling the world, and tinkering with technology. Connect with him and learn more at EricRosenberg.com.