Up until a few years ago, tax agencies typically lacked the tools and expertise required to track cryptocurrency traders. This is no longer the case. In the United States, the IRS has actually signed contracts with a number of different companies that specialize in cryptocurrency forensics.
You need to keep detailed records of all your crypto transactions. The IRS (US) says taxpayers need to maintain records that are sufficient to establish the position taken on their tax returns. Therefore as a minimum, you should keep records of your crypto transactions including:
- The date of your transactions.
- The fair market value of your crypto in USD the day you acquired and disposed of it.
- The capital gain or loss you made from each transaction.
- What the transaction was and the parties involved.
- Receipts or other proof of transactions.
- Records of transfers and transactions from all your crypto wallets and exchanges.
Whether you are just entering the world of cryptocurrency or are already an active crypto holder, among the very first things you must do is get a crypto tax tool. CoinTracking is among the top 3 crypto portfolio tracking and tax reporting tools out there, and an outstanding choice due to the fact that it’s simple to use supports the most popular cryptocurrency exchanges and has stellar customer support.
What Does CoinTracking Do?
There are two primary ways to utilize CoinTracking:
- As a cryptocurrency portfolio tracker
- As a cryptocurrency tax calculator
CoinTracking as a crypto portfolio tracker
If you have accounts with several various cryptocurrency exchanges, you can connect them completely with CoinTracking. Once connected, you can view the worth of all your cryptocurrency assets in a single interface. In addition to exchanges, you can likewise connect several cryptocurrency wallets.
>> Check out CoinTracking here
CoinTracking as a crypto tax calculator
CoinTracking lets you import your trading information from all your wallets and DeFi exchanges like Coinbase and Binance, so that you can crunch all the numbers as soon as possible and discover just how much you lost or made in any provided tax year. Before software application options like CoinTracking, cryptocurrency traders had to utilize spreadsheets to track their purchases and sales.
CoinTracking’s Background
CoinTracking founder Dario Kachel shared some insights on the firm’s background and story of origin:
“I started trading with my own first bitcoins in 2013 at Mt. Gox along [with] others. After several trades I realized quickly that properly tracking all my trades was almost impossible. So I started off with an Excel spreadsheet like many others but I quickly grew tired of manually updating it. I met several traders at that time who had similar problems. So I realized that the need for a professional cryptocurrency portfolio tracking tool is huge and started developing CoinTracking, which initially launched in April of 2013.”
CoinTracking filled an essential niche due to the fact that it can import trading information from exchanges instantly. This removed the requirement to use spreadsheets to identify yearly gains and losses. Early cryptocurrency traders took notice and started joining the service, with CoinTracking now having over 1 Million active users.
At the time of writing, CoinTracking has:
Over the last few years, CoinTracking’s developers have added a number of novel functions and cool features. Features like for instance “permissioned accounts”, which allow accounting service providers to share CoinTracking’s features among their staff. Additionally, a vast database lets CoinTracking users look up cryptocurrency tax laws and find CPAs that have cryptocurrency expertise.
CoinTracking displays an outstanding list of team members on their site. Considering its maturity and user base, CoinTracking appears safe to utilize for any cryptocurrency investor, novices and advanced alike.
>> Have a look at CoinTracking here
CoinTracking’s Top Features
Let’s evaluate CoinTracking’s prime features:
1. Best-in-class API support
One of the best things about CoinTracking is that it has better API assistance than any other cryptocurrency tax calculator. A lot of cryptocurrency exchanges like Binance and Coinbase with openly available APIs can be quickly linked into CoinTracking. As soon as you link your exchange account to CoinTracking, it can import your trading information and update it in real-time.
2. Tax form generator
IRS Form 8949 (US) is the main tax form that you’ll be required to file when you do your taxes. The form generator offers you a variety of options on how to list out your cryptocurrency transactions on the form.
3. Tax software application integration
As soon as you generate a tax report with CoinTracking, you can export your trading information to a variety of various tax software applications. CoinTracking works with TaxAct, TurboTax, Microsoft Excel, Drake Software and continues to add more integration options. You can download your reports as a CSV or PDF file.
4. CoinTracking vs. “Others” (The Competition)
The highlight that sets CoinTracking apart is the reality that it has far better API support compared to competing crypto tax calculators. Most of other crypto tax calculators require you to download a CSV file of your trading information, then upload it to your account by hand. Crypto tax calculators that do use API integration normally just support a handful of the most popular exchanges..
Another good aspect of CoinTracking is that many tax specialists utilize it. If you deal with a CPA firm that utilizes CoinTracking, you can share your cryptocurrency trading data with them in just a few clicks..
Other cryptocurrency tax calculators might offer slightly more economic plans for intermediate-level traders. On the other hand, CoinTracking’s Unlimited plan is in fact low-cost compared to competing crypto tax calculators’ unlimited offers, a few of which charge $1,000/year.
In addition, most crypto tax calculators lack a no-cost option for users. The fact that you do not have to pay anything if you have 200 transactions or less to process makes CoinTracking a sensible choice for newbie traders.
5. CoinTracking Direct Imports
CoinTracking supports numerous direct imports from exchanges in the DeFi space. To name a few:
- Binance
- Coinbase
- Kraken
- Bitfinex
- Bitpanda
- Bitstamp
- CEX
- YouHodler
- BlockFi
- Gemini
- Kucoin
- Huobi,
- and many more (list is updated regularly here)
CoinTracking Fees
Many novice cryptocurrency traders will be able to use CoinTracking free of charge. However, if you end up having more than 200 trades prior to tax filing season rolls around, you’ll need to upgrade to a paid account..
There are 3+ alternatives to think about: CoinTracking Pro, CoinTracking Expert (offering three different levels – ie number of transactions) and CoinTracking Unlimited. CoinTracking Pro will process approximately 3,500 deals, which is a sufficient capability for most intermediate level crypto traders..
CoinTracking Unlimited is created for professional crypto traders who might use trading bots to place lots of trades automatically.
Here’s what Cointracking’s plans and fees look like at the time of writing:
- Free Plan: Users can produce tax reports, however they have to submit their trading data by hand utilizing CSV files. Here are the features that come with the free version:
- Tax reports downloadable in CSV, XLS, PDF and HTML formats
- Up to 5 MB per CSV file
- 2 manual imports of up to 100 entries each.
- No auto imports
>> Check out CoinTracking here
- Pro Plan at $10.99/ month (billed yearly).
Here are the key features that come with the Pro Plan:- Portfolio tracking
- Up to 3,500 transactions
- 20 MB per CSV file
- 5 auto imports per coin
- Unlimited manual imports
- Expert Plan at $16.99/ month (billed yearly).
The key features are:- Access to full features of portfolio tracking
- 20,000 / 50,000 / 100,000 transactions
- 20 MB per CSV file
- 10 auto imports per coin
- 10 backups
- Unlimited manual imports
- Unlimited Plan at $54.99/ month (billed yearly).
The key features are:- Access to full features of portfolio tracking
- Unlimited transactions
- 200 MB per CSV file
- 50 auto imports per coin
- 20 backups
- Unlimited manual imports
Additionally, CoinTracking.info offers Corporate Accounts that are specifically designed for those who want to manage multiple clients. For instance, CPAs, accountants, tax attorneys, and investment companies can benefit from this feature. The base pricing for these accounts starts at $499 per year. You can add more by paying extra fees.
- With a Corporate Account, you will have access to:
- Unlimited transactions
- 10 unlimited accounts
- Branded accounts with your logo
- Backup and restoration of data across all accounts
- Manage user permissions
- Add admins to each account
>> Check out CoinTracking’s pricing details here.
CoinTracking Tutorial For Beginners
Now, let’s see how you can utilize CoinTracking to get your crypto tax report all set in no time.
Step 1: Create your account
To start this CoinTracking tutorial, you must create an account. You can use the free account of CoinTracking to create a tax report, but only if you have 200 transactions or less to process.
Step 2: Transfer your data
The initial step of using CoinTracking involves copying all your trading information to your CoinTracking account. There are 2 primary methods to do this: with CSV files or by syncing CoinTracking to all your cryptocurrency exchanges and wallets.
- CSV Files: Practically all cryptocurrency wallets and exchanges supply the ability to export your data to a CSV file.
- API Sync: The easiest way to utilize CoinTracking is to sync all your wallets and exchanges to it. To do this, you should visit each of your exchanges or wallets that you wish to connect and produce an API key. You can copy and paste your API information into CoinTracking. As soon as this has been completed it will let CoinTracking fetch your trading information and update it immediately. To utilize this function, you’ll be required a paid CoinTracking subscription.
You can start importing your data through the Enter Coins drop-down menu. Select either Exchange Imports (CSV) or Exchange Imports (API). Then, follow the guidelines to complete the process.
Step 3: Generate your tax report
After you’ve imported all relevant trading information that you wish to analyze, you can create a tax report. CoinTracking offers very helpful tutorials on YouTube to guide you through the process.
To start, choose Tax Report from the main menu, then click the Open settings and create a brand-new Tax Report button.
For the most part, the fields you require to submit here are obvious.
If you’re a beginner and you just have accounts with a couple of crypto exchanges, you may wish to turn the Group by day toggle switch to the off position. This will let you develop a more comprehensive tax report that consists of all the trades that you put in on any offered day. If you utilize exchanges that are located in different time zones, you’ll most likely wish to leave this feature switched on.
There are several ways of doing this, and they all have their benefits and drawbacks. Most tax authorities let traders select from several different accounting techniques.
Additional Tips: If you’re having difficulty choosing which accounting approach to utilize, you can use CoinTracking’s free database of tax professionals to contact a crypto tax specialist near you.
The Tax short-term and Tax long-term fields let you learn just how much you’ll require to pay at tax time. To fill those in, you’ll need to find out which tax bracket you’re in. If you’re unsure or if you simply desire to see just how much you made from trading crypto, you can alter the Tax computation mode from Calculate tax and gain to just Calculate gain.
Additional CoinTracking Functions
Last but not least, this CoinTracking review would not be exhaustive if we didn’t point out that additional features that it offers:
Export IRS form 8949
If you reside in the United States, you can utilize CoinTracking to generate IRS form 8949. This is the form you’re required to file to report your crypto gains or losses. CoinTracking will populate the form with data from your CoinTracking tax report.
>> Have a look at CoinTracking here
Export your trading data to other tax programs
If you utilize TaxACT, TurboTax or Drake, you can export your trading details to those programs after you create your CoinTracking tax report. Simply click the correct button and you’ll be able to download the file you need to carry out the import.
Track your crypto portfolio on the go with CoinTracking’s mobile apps
If you’ve synced all your wallets and exchanges, CoinTracking’s Android and iOS apps let you inspect your crypto accounts from anywhere.
Projection Bitcoin rate changes
The experimental Bitcoin Analysis feature utilizes technical analysis to forecast if Bitcoin rates will rise or fall 3 hours from the time of computation. With this feature you can also view a selection of additional Bitcoin charts.
Wallet transactions
Incoming and outgoing wallet transactions from Blockchain, Electrum, Exodus, Gatehub, Mycelium, Ledger, and Trezor wallets can be manually imported. This process is straightforward, quick and easy. More wallets are added on a pretty regular basis. Check CoinTracking for latest updates on wallet integrations.
Final Verdict
CoinTracking is for sure among the top DeFi tax reporting and portfolio tracking tools utilized by cryptocurrency investors and tax professionals alike. You might want to have it in your arsenal too.
Thanks to CoinTracking’s features, it will enable you to get your crypto tax calculations completed in a time-saving and user-friendly way. The company’s history and user base make CoinTracking safe to use for crypto beginners and veterans alike.
You may want to try it out at zero cost with their free base plan.
