If you sold, traded, earned, paid or staked cryptocurrency in 2021, whether it was bitcoin, ether, binance, cardano, or any other virtual currency. And you've just had a few days left to do it, and income tax returns must be filed by April 18, 2022.
Crypto taxes have been a way of life for those who sell or trade digital currencies since the on in 2014. As capital gains, profits from cryptocurrency sales are taxed. And crypto traders must document the value of every sale or trade on.
If you earned crypto as earnings or from airdrops, hard forks, mining or staking, you'll need to pay for it on your taxes. There are also different IRS forms depending on whether you're doing it as a "hobby" or as a business.
Consider a crypto tax software that connects to exchanges and assists in reporting crypto transactions on your tax return. They won't necessarily file your taxes for you, but they will sync up with popular tax filing tools like, and help you navigate the difficulties of crypto taxes.
Products related to the Crypto tax software
CoinTracker is one of the fastest growing cryptocurrency data tracking platforms in 2022. In January, CoinTracker announced that it would simplify tracking taxable cryptocurrency activity for CoinBase users. to allow its users to import crypto transactions.
CoinTracker is built on over 300 crypto exchanges and wallets to automatically track your cryptocurrency holdings, sales, and transfers. The CoinTracker site boasts that it has tracked 3% of the global cryptocurrency market, totaling $50 billion worth of crypto assets.
CoinTracker will process your IRS Form 8949 for you and will assist with several IRS schedules related to crypto income from airdrops or hard forks.
CoinTracker's pricing was based on your number of crypto transactions. If you have 25 or fewer transactions, it's free. A Hobbyist plan starts at $60 and includes up to 100 transitions. The Premium plan adds up to 1,000 transactions and starts at $200.
Koinly, a cryptocurrency tax calculator, works with 368 crypto exchanges, 78 wallets, and 20 other cryptocurrency services (like the products in this collection.) If Koinly does not include your cryptocurrency exchange, you may also import CSV files of cryptocurrency transactions.
Once connected to your accounts, it automatically tracks all your cryptocurrencies, records transfers, and can even combine multiple transactions.
Koinly offers a free crypto tracking service, but you'll need to upgrade to a paid version for the tax reports, including Form 8949. Similarly to CoinTracker, Koinly is pricing its tax service rates on your number of cryptocurrency transactions: $50 for 100 transactions per tax year, $100 for 1,000 transactions, $179 for 3,000, or $279 for 10,000.
ZenLedger, a cryptocurrency company founded in 2017, allows users to fulfill income tax obligations by aggregating crypto activity and converting it into the IRS forms and schedules used to file taxes. Schedule 1 (crypto income), Schedule D (crypto gains or losses) and Form 8949 (crypto sales and other dispositions).
In one easy-to-read spreadsheet, a comprehensive tax-loss harvesting tool analyzes your transaction history and offers tax saving opportunities. ZenLedger also has a "Grand Unified Accounting."
ZenLedger is available for 25 transactions per year, with the Starter plan for $50 increasing the transaction limit to 100, while the Premium plan for $150 provides you 1,000 transactions, including support for staking, NFTs, and interest from decentralized finance (DeFi) activities. The Executive plan at $400 gives you all that plus unlimited transactions, and the Platinum plan at $1,000 includes all of the above and two hours of premium support.
TaxBit, led by PayPal Ventures and other big investors, is offering an expansive free crypto tax software program that will not require tracking unlimited transactions if you use any of the almost 500 exchanges included in the TaxBit Network. A basic plan of $50 per year adds support for exchanges outside the network and historical records.
Plus Plus offer $175 per year in tax-loss harvesting capabilities and income from DeFi, while the top level -- Pro at $500 per year -- adds a tax review by a CPA.
TokenTax is a popular crypto tax software that allows you to either create tax reports for your taxes and enable TokenTax to file your taxes for you. It has 18 countries, including the United States.
There is no free plan at TokenTax. The entry level Basic plan costs $65 a year, provides support for up to 500 transactions, including support for Coinbase and Coinbase Pro. A higher level of money is used to improve cryptocurrency exchanges, NFT and DeFi income, a tax-loss harvesting dashboard, and 5,000 transactions. The $800 a year Pro level raises the transaction limit to 20,000, as well as support for the Foreign Bank Account Report and all margin exchanges.
After signing up for TokenTax, you'll have to pay a lot. The VIP package costs $3,500 per year, which includes up to 30,000 transactions and all the advantages of lower plans, plus advanced crypto reconciliation and two 30-minute consultations with a tax expert.
Accointing currently supports 105 crypto exchanges via direct API integration and more than 300 exchanges via CSV files. It allows you to track your crypto transactions and performance in real-time and claims to produce tax reports in five clicks.
Accounting charges for its service based on the number of taxable transactions you must report. It starts off with a free program that includes up to 25 transactions. You'll get 500 transactions a year for $80, 5,000 transactions for $200, or up to 50,000 transactions for $300. All levels include a tax-loss harvesting option.
Blockpit claims it supports "all top exchanges" of crypto, but only displays logos for 17 of them on its product page. Coinbase, Kraken, Binance, and Crypto.com are among the names, but there is no mention of Gemini or BlockFi.
Blockpit has a free service for up to 25 transactions per year. It will also include email support and up to 25,000 transactions for $200 per year. If you're looking for unlimited transactions, you'll need to upgrade to the Professional level, which is valued at 600 euros per year (about $660 as of March 11).
CryptoTrader.Tax, which will soon be rebranded as, allows you to import all your trades, add income information from mining or airdrops, generate tax reports, and then import those reports into popular tax software such as or. The site currently enables integration with 100 crypto exchanges.
The downside of CryptoTrader.Tax is that every tier has the same features. The only restrictions are based on trading volume. For $50 a year, you get 1,500 trades for $100. The High Volume level receives 5,000 trades for $200, and the Unlimited plan allows you to track as many transactions as you like for $300 a year.
Bitcoin.tax is a cost-conscious approach for managing crypto taxes. Import your trading, income, and spending data, and Bitcoin.tax will calculate your capital gains and losses, and send the IRS forms you need to complete your tax return.
The service lists 21 cryptocurrency exchanges, including Binance, Kraken, Coinbase, and Gemini, that it specifically supports in automatic syncing your accounts. Trades from other exchanges can be imported with CVS files.
Bitcoin.tax is known for its pricing, which is generally lower than most other crypto tax software. The only limitations are on the number of trades, but the Free tier allows up to 20 trades, and the Premium tier allows up to 1,000 transactions for $40; the Premium Extra at $50 allows you up to 5,000 trades; and Deluxe discounts 10,000 transactions for $60.
Bitcoin.tax has also joined forces with Gordon Law to provide complete tax filing services. You may pay for a half-hour consultation with a crypto tax expert, or you may pay to have Bitcoin.tax file your taxes for you.
Bear.Tax offers integrated support for over 50 cryptocurrency exchanges and servers, as well as a generic CSV upload feature for any other crypto merchants. It provides the following information, including a useful "audit trail file" that shows every cryptocurrency transaction you've ever traded or sold, plus the fair market value at the time of any transactions.
Bear.Tax, along with every pricing strategy, has all of its features, with a maximum of 200 trades. For $150 a year, you'll get up to 2,500 transactions, and for $500, up to one million (!!!) transactions per year.
What is the basis of the IRS's terms of cryptocurrency and virtual currency?
Cryptocurrency is a subset of virtual currency, and all of the IRS's rules for virtual currency are equally applicable to crypto. Virtual currency is defined as money that is not stored in US dollars or official foreign currency, yet functions as a and as a medium of exchange.
The IRS defines a "convertible" virtual currency like Bitcoin or Ethereum as a form of virtual currency capable of substituting "real" or "fat currency."
Is there any way to do so in response to the IRS question on Form 1040?
The IRS has no doubt wanted tax filers to forget about the virtual currency problem that was included to the main 1040 and 1040-SR tax return forms last year, but it's right there:
"At any time in 2021, did you receive, sell, exchange, or otherwise dispose of any financial interest in any virtual currency?"
If you purchased cryptocurrency with a fiat currency - US dollars or official foreign currencies - in 2021, you do not have to check "Yes."
- Received cryptocurrency as payment for goods or services
- Received crypto for free that wasn't a bona fide gift (e.g. airdrops)
- Received crypto by mining, staking or hard forks
- Exchanged crypto for property, goods or services
- Bought crypto by using cryptocurrency
- Sold cryptocurrency for US dollars or foreign currency
How does the IRS tax cryptocurrency?
Virtual currency is described as a property, according to federal tax rules. Property transactions using virtual currency are subject to general tax principles.
If you purchased and sold crypto, you'll need to disclose costs and dates when you purchased and sold it. If you earned cryptocurrency as a income or from mining (as a hobby), that money is on Schedule 1 (Additional Income and Adjustments to Income).
There are a variety of crypto situations and IRS forms you'll need to complete.
Crypto tax situation and forms
|Cryptocurrency Situation||IRS Tax Form|
|You sold crypto or exchanged one cryptocurrency for another||Form 8949 and Schedule D (Form 1040)|
|You earned crypto from wages, airdrops, forks or mining as a hobby||Schedule 1 (Form 1040)|
|You donated cryptocurrency||Schedule A (Form 1040)|
|You earned DeFi or crypto interest or staking income||Schedule B (Form 1040)|
|You earned mining income as a business or earned other business crypto income||Schedule C (Form 1040)|
What is the cost of cryptocurrency tax software?
Crypto tax software assists you file your tax return with the IRS. In general, crypto exchanges and wallets are sync to track your purchases, sales, and other transactions.
Most crypto tax software will use the various forms you need to keep track of all of your crypto transactions and completed manually. Most crypto tax software will pay for their assistance in tax preparation. The amount depends usually on how many crypto transactions you make per tax year.
More information on taxes and crypto
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