Last year, the cryptocurrency market went insane and the sudden increase in cryptocurrency prices made a lot of people happy allowing them to amass fortunes overnight. Obviously, this also attracted the government’s attention as since then, authorities are focused on taxing profits and activities related to crypto trading.
Financial authorities have made an effort to find the proper tax bracket for cryptocurrencies and it’s safe to say the related tax regulations are still rough around the edges. Nevertheless, currencies are seen as a form of abstract property at the moment which is taxable.
Presently, identifying the owners is very difficult thanks to the anonymous crypto addresses. Even so, according to IRS reports between 2013 and 2015, there have been 800-900 Americans that filed taxes on property “likely related to Bitcoin”.
The number may have been small during those years but that was just the beginning and the truth is crypto taxation will become more regulated sooner rather than later.
There are already many crypto investors that would like to calculate and pay their taxes now and not wait until the IRS cracks down on them. For this reason, various online tax calculators have been launched.
Best Bitcoin tax calculators for this year
To make things easier, we’ve selected the best cryptocurrency tax calculators in the hopes it will make it easier to calculate your taxes for the cryptocurrency you own.
CoinTracking is one of the most appreciated online services for calculating crypto investment income. The web-based platform can provide an accurate tax estimate even if your portfolio is highly diversified.
The service lets you connect your exchange account using APIs or CSVs so it will be able to view your trading history as well as gains and losses and calculate your yearly total loss or profit. The result can be exported to various formats such as Excel, XML, CSV, and JSON.
CoinTracking will automatically retrieve current and past coin prices as it supports approximately 25 exchanges and more than 5,000 digital currencies which makes it an excellent option for advanced crypto traders.
It provides a free account option with a limited number of transactions and features. The premium subscription will give you a year with the complete set of features and includes a Capital Gains Report performed with LIFO, FIFO, HIFO or LOFO calculation. Interestingly, you can even purchase a subscription for lifetime use, assuming your budget allows it because it’s a pretty expensive one.
BitcoinTaxes is another popular tax calculator for cryptocurrencies that’s been around since 2014. The online platform allows you to import data regarding cryptocurrency transactions performed on supported trading exchanges such as Coinbase, Kraken, Bitstamp, Gemini…etc., and generate your tax reports.
You can also add income, mined coins, as well as donations and spending you might have made from your wallets. Once all the data is entered, the website can calculate your taxes.
The application can calculate a variety of reports, specifically:
- The Capital Gains report that includes the cost basis, sale proceeds, and gain for each transaction
- The Income report that also has all the mined values calculated
- The Donation report with data regarding your gifts and tips
- The Closing report that displays the net profit/loss and cost basis for advancing into the upcoming tax year
Keep in mind that you will need to manually enter coin pricing info on BitcoinTaxes for the calculated time frame. You can view the platform’s pricing only after you crete a free account and if you decide to purchase their service it remains usable only for a certain tax year.
For now, BitcoinTaxes can be used by residents of US, Canada, Australia, United Kingdom and Germany.
Coinbase tax calculator
The government has been pressuring Coinbase for quite some time and the platform created a tax calculator tool to encourage its users to file their taxes and also to tame the government a bit.
The tools they released are designed to simplify the tax reporting process for cryptocurrency investors and their tax professionals and they include a tax calculator.
Keep in mind the Coinbase tax calculator is designed to help you generate a single report with all transactions related to your Coinbase account. The report does not include transactions with payment reversals.
While there is no standard set by the IRS for calculating digital asset related taxes Coinbase does recommend using FIFO or SpecID which are two of the most popular methods.
Also, the Coinbase tax calculator doesn’t work for digital assets transacted on other exchanges, non-Coinbase wallets, digital assets stored on external storage devices or ICO transactions.
LibraTax is another excellent option many crypto enthusiasts are using to calculate their taxes. The web-based platform can track your crypto activity, establish cost basis for calculating capital gains and losses as well as report taxable ecents.
It can automatically sync with wallets from major exchanges such as Coinbase, BitStam, GDAX, and BitGo among others. The transactions are displayed in a spreadsheet layout and support is provided for numerous cryptocurrencies including Bitcoin, Ethereum, Monero, Bitcoin Cash, Litecoin, Ripple and Zcash.
You can rely on LibraTax to generate reports on acquisitions, disposals, balances, tax lots and US Tax Form 8949.
The free package supports up to 500 transactions and offers only totals, not the individual lines Form 8949 requires.
The Premium option lets you access a tax report that can be downloaded and supports up to 5,000 transactions for a $19 fee. Nevertheless, there are also plans for businesses and accountants, priced at $49 and $99, respectively.
What is your favourite tax calculator?