Key Highlights:
- Integrations with more than 400 cryptocurrency exchanges as well as wallets.
- Real-time monitoring of cryptocurrency transactions as well as losses/gains.
- Tax reports for more than a hundred countries, including Australia, Canada, UK, and the USA.
- Supports several accounting methods, including Average Cost Basis, Highest Cost, LIFO, and FIFO.
- Supports multiple tax formats like Form 8949.
- Classifies income from various sources like lending, minding, staking, and more.
- Integration with well-known tax software such as TaxAct and TurboTax.
- Cryptocurrency portfolio analytics and tracking.
- User-friendly interface.
It is a tale as old as time (okay, maybe not that old), but come on, taxes have been a solid pain in the back forever. Crypto gives and gives, but the tax man takes it all away! While plenty of taxes have been paid over the last few centuries, crypto is a relatively new space. But that doesn’t mean crypto users are spared of this burden in any way!
But worry not – it’s 2024, and we are living in a world where tax software tools are a reality, equipped to make your life easier.
Meet Koinly – a crypto tax calculator and portfolio tracker that imports transactions automatically while monitoring all wallet transfers and market prices. Not just that, it also calculates the user’s crypto losses/gains and generates accurate tax reports. The reports are based on the user’s airdrop, staking, mining, and trading activities.
That does sound great, doesn’t it? The only question is – is Koinly able to deliver what it promises? Is it legit? Let’s find out!
| Pros | Cons |
| 1. Koinly is simple to use and comes with a free version. | 1. It is not entirely automated. In fact, some transactions still ask for manual inputs. |
| 2. Koinly offers generalized and localized tax reports for over 100 & 20 countries, respectively. | 2. Only users with paid plans can access IRS-compliant tax forms. |
| 3. Supports more than 170 blockchains, 20,000 crypto assets, 100 wallets, & 400 exchanges. | 3. Some users have reported encountering issues while importing their transaction histories. |
| 4. Groups small trades into single transactions. | |
| 5. Accept payments via crypto for using the software. | |
| 6. Detects transactions that must be removed from tax reports, including duplicate transactions. |
But First, Let’s Address The Problem With Crypto Taxes:
If you have recently entered the crypto space and are still unfamiliar with crypto taxes, then it must have been a complete minefield for you so far. To begin, there’s no single rule that should govern your transactions. Moreover, cryptocurrencies are classified differently in every country – a single rule would not make sense!
While some countries classify crypto as ‘miscellaneous,’ others classify it as property. And then there could be countries that consider crypto to be an ‘intangible property,’ a commodity.
So, how a country classifies crypto influences the related taxes. As a result, whether a jurisdiction treats this tax as income or capital gains depends on how they classify crypto.
Moreover, if you have a business interacting with crypto in any way (to accept payments, for trading, or as a service), then you have opened up an entirely new realm of a can of worms. Now, if that alone is not complex enough, just think about all the ways in which people can earn profits in some form from crypto – most of which are differently taxed.
Examples Of Taxable Events In Many Countries:
So here are some instances of taxable events in different countries:
- Earning income from P2E games and Blockchain.
- Crypto mining.
- Staking income.
- Selling cryptocurrencies for fiat money either at a loss or profit.
- Getting airdrops. (Yep, that’s income in some countries)
- Selling NFTs since these can end up triggering income tax or capital gains depending on the income’s nature.
- Yield farming or providing liquidity. In such cases, if you earn any APY, then that will become your income.
- Using cryptocurrency debit cards.
- Earning advertisement/rental income from renting NFTs or digital land.
- Using DeFi lending protocols such as Aave or Compound Finance and CeFi lending protocols such as Nexo.
- Exchanging any digital asset on a centralized exchange or DEX. (Yes! If you swap an altcoin for Bitcoin or even another altcoin, then it will become a tax event.)
What we are trying to point out is that the real issue with crypto taxation is that it is very complex. On top of that, there is so much to consider. These kinds of distinctions are vital. After all, they do determine the amount of taxes the trader has to pay per transaction.
To ensure that you are not doing all of this on your own while risking making mistakes that can lead to hefty fines or even some jail time, we would highly recommend an efficient crypto tax calculator like Koinly.
So, How Does Koinly Solve The Problem?
Yes – crypto taxes are complicated.
Enters Koinly – a crypto software tool that makes tax reports an easy affair. As we just said, crypto taxes are difficult and incredibly complex.
Without an accurate tool like Koinly, it will take you hours to organize all your transaction data in one place. Moreover, it will take you even longer to prepare report documents with so much data.
Due to such inherent complications associated with the various events that might or might not trigger any taxable event and the various ways in which these are classified, attempting to do your crypto taxes manually isn’t a good idea. It exposes you to a huge amount of risk related to overpaying taxes and making mistakes.
As a result, it is best to depend on an effective tool like Koinly that ensures compliance and accuracy in making tax reports.
Perhaps the absolute best thing about this tax software is that it can integrate directly with a huge number of crypto wallets and exchanges.
In fact, it can integrate with DEXs and self-custodials for automatically importing your crypto activities. That way, you can save so much time, even if not weeks of manual labor.
What’s So Great About Koinly? Top Features
Koinly imports as well as organizes your cryptocurrency transactions automatically. Moreover, the software is also updated for compliance reasons. As a result, it stays updated with the dynamic regulatory environment.
Thus, with the help of this tool, you can save yourself from overpaying taxes on your crypto investments or violating any tax obligation, for that matter.
Additionally, the software uses capital losses for offseting capital gains in order to obtain maximum tax efficiency. As a result, the tool can do tax loss harvesting automatically.
The tool has a lot to offer. Here’s what we loved most about this tool!
1. Portfolio Tracking:
With Koinly’s help, you can monitor your crypto assets and their subsequent performance, and that too across different platforms.
It’s normal for crypto users to keep their assets in different platforms – from different exchanges and wallets to platforms. As a result, it is difficult to monitor your crypto portfolio’s performance.
The platform offers a single dashboard that displays the position of all your crypto assets. Moreover, it also offers a complete overview of the user’s activities, including lending income, staking, mining, and more.
Additionally, it also calculates the user’s ROI across different holdings and subsequent growth over a time period.
2. Data Import:
Koinly would not actually be useful if it did not support mass data import and automation – would it? Instead of going back and forth between different platforms and entering every data point, you can just sync all your data to this software tool. In case you find data the tool can’t sync automatically, just mass upload those files.
The tool supports more than 400 exchanges, 170 chains, 200 tokens, and 100 wallets. Here’s how you can import your data to Koinly.
- Connect your accounts through API.
- Use ETH tokens and x/y/zpubs with the help of your public address and add your wallets.
- Monitor margin trading once you are on centralized exchanges.
- Tag ‘income’ automatically from imported sources that come from platforms such as Aave, Compound, Nexo, etc.
- Koinly comes with a killer AI detection feature that can detect all the transfers that you made with your different wallets. With the help of this smart transfer matching feature, you can exclude transactions between your own wallets from tax reports.
With the automated data input feature, the tool removes the manual job of recording the transaction’s price, data, and tokens involved.
3. Cryptocurrency Tax Reports:
Once the tool collects all the data, it will allow you to preview your capital losses and gains. Also, you will be able to access some taxation reports for free and generate tax documents when you are ready.
Here are some free tax reports that we came across:
- For users based in the United States, the tool can generate IRS tax forms that are filled out for you. For example, we found Form 8949, Schedule D.
- International tax reports for more than a hundred countries, including Brazil, Sweden, Germany, the United Kingdom, Canada, and the United States.
- Specific and localized tax reports for more than 20 countries.
- For users trying to declare taxes in countries using accountancy methods such as PFU, Shared Pool, Average Cost Basis, Highest Cost, Last In Fast Out (LIFO), or First In First Out (FIFO).
Moreover, Koinly also makes error reconciliation super easy, thanks to its killer double-entry ledger feature. A subsequent entry backs every single change in a user’s asset balance. As a result, the tool can identify and rectify any mistake quickly.
Additionally, the software also highlights and flags any errors or missing transactions arising from data importing. That way, you can double-check everything before it’s ready to go.
Also, the tool is so smart that it identifies and eliminates duplicate transactions. As a result, you don’t have to fret over duplications while importing your data from different sources.
Koinly Fees:
Koinly’s tiered fee structure ranges from free to 169 pounds a year, depending on your needs and usage. If you are new to the crypto space, then the free version is perfect for you since you will only need previews and portfolio tracking. In that case, since the user needs to become more complex, the prices increase.
Here’s an overview:
- Free version,
- Newbie version for 39 pounds per year,
- Holder version for 89 pounds per year, and
- Trader version for 169 pounds per year.
Is Koinly A Good Fit For You?
So, the question is – is Koinly a good fit for you?
YES! It is a tool that literally anyone who deals with crypto can depend on – from the newbies in the crypto space to the professional and advanced users who run businesses, trade frequently, or just dive into the intricacies of DeFi.
This software is a good fit for accountancy firms, businesses, accountants, and retail traders alike. Yep! There is nobody for whom the tool is not suitable. In fact, anyone who remotely finds such crypto taxes complex and overwhelming can depend on this tool safely.
Moreover, the tool has its own team of professional experts who can walk you through the tax procedures, ensuring that you feel confident with tax responsibilities.
So, Is Koinly Worth Your Trust?
So, is Koinly worth your time and trust? YES, IT VERY MUCH IS!
It is a fantastic tax software that makes managing your crypto taxes easy and simple. Moreover, it is one of the most detailed and comprehensive tax platforms that provides easy solutions. The tool also meets the needs of any kind of crypto user – from beginners to advanced users.
The tool’s team of experts comes with years of experience in both accounting and finance, not to mention crypto. This is very evident from the kind of platform the tool has managed to build – a platform that doesn’t fail to win the trust of new users and crypto professionals.
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