Calculating cryptocurrency tax can prove to be a stressful task for the everyday crypto trader. It is a time-consuming process that involves many aspects, like the number of cryptocurrency coins or lots in your possession, the number of trades you were involved in, and the number of cryptocurrency exchanges or platforms you are using.
What makes things even harder, is the fact that each cryptocurrency exchange uses different output methods to track your trading activity. Some exchanges don’t use output methods, which makes it even harder for the crypto trader to precisely determine their cost basis and capital gains or capital losses. Each trade or transaction needs to be individually recorded along with its cost during the time of the trade. The level of data recording and calculation is on a very large scale, making it difficult for a trader to manually be on top of his books. In order to meet this demand, Bitcoin Tax Softwares has been made available to the public. Don’t forget to use a bitcoin tax discount code to avail discounted rates for the service.
IRS involvement in cryptocurrency taxation
The Internal Revenue Service(IRS) is cracking down on cryptocurrency exchanges and asking for transparency of records in a market that is founded on its high level of encryption and security. Although the IRS does not have full transparency of the trade that occurs in a cryptocurrency exchange, they still expect people to come forward and apply for taxes as cryptocurrency itself is identified as property, which is taxable. This has lead to the creation of many bitcoin tax softwares, promoted with bitcoin tax discount codes which you can enter to avail on discount on your subscription. Tax calculators help you during that time of the year when it comes to filing your cryptocurrency tax.
Top Bitcoin Tax Calculator Softwares
BearTax is known to be one of the most user-friendly cryptocurrency tax calculator out there.
This calculator imports the data from all your crypto transactions from over 25 of the major currency exchanges and then calculates your capital gains and capital losses. BearTax can also generate financial reports, filling in the columns automatically so you won’t have to go through all those complicated jargons and flip through several pages of transactions to see if everything is on point. You can export these automatically generated tax statements and file them, as well as keep them for future reference and analysis.
With an array of useful features, BearTax provides a clean and navigable interface that is easy even for the most inexperienced crypto trader to understand. There is a ‘smart matching’ algorithm that lists out all your withdrawals and deposits made on any of their software-supported currency exchanges and is displayed on their interface. You can go through each and every trade and verify if you have any negative balances.
They also have a section dedicated to calculating capital gains and losses. Using this, you can review the trade history of every exchange you have cryptocurrency in. Everything from the date and time you bought, sold, or traded currency will be displayed along with your tax liabilities.
BearTax is compatible with centralized and decentralized cryptocurrency exchanges. And if the currency exchange that you are using is not compatible directly with BearTax, you can import your crypto trading data into BearTax’s software by using a CSV format.
BearTax has pricing options that range from 99 cents to 199 dollars per annum, and all their packages are inclusive of the following features.
- Capital Gains and Capital Loss Statement
- Auto-generated Taxation Forms
- Compatability with Top Cryptocurrency exchanges
The main difference between free and premium subscriptions is the number of transactions or trades that you can input for computing tax. In BearTax, this ranges from 20 to an unlimited number of transactions. Any moderate to high-level cryptocurrency trader dealing with a certain dollar amount of investment will have to go for a premium package in order to accommodate the scale of the trade he or she is dealing with. You can search for bitcoin tax discount codes for BearTax online and get 20% off. There are festive offers as well such as the Black Friday sale discount, where you can avail discounts at a higher percentage.
CryptoTrader.Tax is another bitcoin tax calculator software that helps in calculating a crypto trader’s capital gains and capital losses within a few minutes. The user interface is designed to make the importing process of crypto data easy and hassle-free and ensures that there is no overestimation of tax, meaning the figures generated are extremely accurate and you won’t ever end up overpaying on your taxes.
The completed tax reports can be uploaded onto TurboTax for an easier tax filing process. TurboTax is an add-on tool built into the CryptoTrader.Tax software.
CryptoTrader.Tax is directly compatible with over 20 of the top cryptocurrency exchanges, such as Binance, Coinbase, Gemini, Bittrex and Poloniex. If your exchange is not compatible with the CryptoTrader.Tax software, you can still upload your trading data onto the software using CryptoTrader.Tax’s generic exchange template.
Once your trading data is imported, the tool will automatically calculate your tax liability using the FIFO(First In, First Out) method, which is what Certified Public Accountants(CPAs) and tax authorities use throughout the industry. After the calculations are done, the trader can export the tax documents for tax filing purposes. This includes the IRS Form 8949.
CryptoTrader.Tax offers a variety of subscription-based packages. The lowest tier is free to use and has the function to allow traders to import their crypto data and process your tax. But in order to download the reports offered by the software, you will have to pay a one time fee.
There are bitcoin tax discount codes available online for this software as well.
ZenLedger is another bitcoin tax calculator. It is relatively new but it can be your one-stop tax software for all your crypto taxation needs. ZenLedger’s software is also integrated with the cryptocurrency market’s top exchanges and supports all major crypto and fiat currencies.
Through ZenLedger’s platform, they can import all your data from your different exchanges into their software and calculate your tax position. Once this is done, you can then generate your tax-related documents. These include your donation report, income report, report for capital gain and loss, and the closing report. If needed, you can also generate profit and loss statements. These reports may be requested by your CPA or tax practitioner.
ZenLedger’s pricing scheme ranges from 99 – 299 dollars per annum. This is inclusive of crypto exchange support, tax report generation, and the CPA’s access to the software.
All of ZenLedger’s documents are compliant to the IRS’s requirements, which means you will have the final form prepared for tax returns. All you have to do is file for it and you won’t face any issues with your returns. The USP of ZenLedger is that it caters to the newbies and the veterans of crypto trade. There are bitcoin tax discount codes available online for this software as well.
Whatever tax calculator you choose, you can search for bitcoin tax discount codes by simply typing the name of the tax computing software you are using, along with bitcoin tax discount code or discount code or discount coupons. There are lots of websites offering discounts so look around and make sure you get the best offer.