ZenLedger calls itself the number 1 crypto tax software provider.
If you are a crypto enthusiast or investor, then you know that filling up your taxes accurately can be difficult because capital losses or gains from your different trades, staking rewards, gas fees, and mining income are all very relevant for taxes.
Moreover, Zenledger offers crypto portfolio tracking for free, including NFTs. For taxes, users can also choose to upgrade to a paid plan where the software generates the necessary forms for their individual tax returns.
But the software also plans to be very costly for any individual with more than 5000 transactions in one year. Today, we are going to explore the primary features of the software, its pricing, and whether it is the right software for you or not!
| Pros | Cons |
| Up-to-date and accurate tax reports. | The free plan has several limitations. |
| Can connect to different exchanges. | The software charges for DeFi support separately. |
| Easy-to-use interface. | Only tax forms from the USA can be downloaded. |
So, What Is Zenledger?
Zenledger is a crypto tax and accounting software that enables users to monitor their digital token portfolios live. It also enables users to generate income tax and capital gains reports.
Moreover, the software has been designed in a way that individuals consider it to be intuitive and user-friendly. As a result, the software is ideal for everyone unfamiliar with tax laws or accounting.
Additionally, the software also has multiple features that make it very unique compared to other tax softwares in the market.
What Does Zenledger Have To Offer?
Like conventional tax software, Zenledger typically consolidates the user’s financial information, helping you file taxes accurately. On top of that, the software exclusively focuses on crypto transactions as well as performance.
Similar to other cryptocurrency tax applications, you will either have to hire an accountant or get hold of your favorite tax software and that too in conjunction with Zenledger’s tax reports.
Moreover, if you do possess any capital gain from crypto sales or you want to offset all your taxes via tax-loss harvesting then you will find this software very useful.
1. Crypto Portfolio Tracking:
Zenledger has actually integrated more than 100 DeFi protocols, 50 blockchains, and 400 crypto exchanges. Moreover, the software allows users to import their transaction history as well as holdings from different wallets, exchanges, and cryptocurrency projects into their dashboards.
The most notable integrations of ZenLedger are as follows:
It is also vital to note that while the software functions with multiple exchanges, users might need to export specific spreadsheets with their transactions from their exchange first before importing them into the software’s dashboard.
But users can also choose an API connection to download their transaction data directly for a majority of exchanges. Once a user imports their crypto holdings and transactions into the software, their dashboard will break down into value-per-holding and portfolio performance.
If you want to pay for the Zenledger software, then you can even go deeper into portfolio and market performances across various timeframes. This basically includes quick snapshots of how your crypto investments are currently performing.
However, this is not a great portfolio tracker for the whole year. So, if you are looking for a good yearly software tracker, then check out CoinTracker or Koinly.
Additionally, if you are looking for a superior tool with comprehensive portfolio tracking for your investments, including crypto and stocks, then Kubera is a good fit for you.
2. Downloadable Tax Reports:
The main reason behind considering Zenledger is the tax reports that you can download with a click. Plus, the software can also calculate capital losses, gains, and extra income depending on your linked wallets and exchanges.
Moreover, the software also supports three different cost-basic processes:
- FIFO (First In First Out),
- LIFO (Last In First out), and
- HIFO (High In First Out).
In fact, the tab for your tax center monitors taxable cryptocurrency income from different sources, including:
- Staking,
- Mining,
- Interest from cryptocurrency savings accounts,
- Gifts,
- Forks,
- Dividends, and
- Airdrops.
Overall, the software allows users to not just save time but also enhance their accuracy while filling out their crypto taxes. So, if you are new to crypto investing or not a regular trader, then this software is a great choice for you.
But investors who have big portfolios with a variety of cryptos and plenty of DeFi activities should consider talking to tax professionals.
3. Tax Loss Harvesting:
Another feature of Zenledger we love is its tax-loss harvesting tool. So, what is tax-loss harvesting? The process includes selling assets at a loss, thereby offsetting the user’s capital gains. This, in turn, helps to decrease how much the user will have to pay in taxes.
Here, the idea is to simply replace the assets that the user has sold at a loss with assets that are similar. That way, the composition of the user’s portfolio will stay the same.
For instance, let’s assume you purchased 10,000 dollars’ worth of Bitcoin when it was peaking at more than 65,000 dollars. Now, if the price of Bitcoin drops and you end up incurring a lot worth 40,000 dollars, then you can sell off your BTCs to realize the same loss. Naturally, then you would have used the 4,000 dollars to offset other taxes.
The deadline for realizing cryptocurrency losses is 31st December. As a result, tax-loss harvesting is typically an end-of-the-year plan. With the tax harvesting tool of this software, you can obtain a full overview of all your unrealized losses, gains, and the total number of coins that you will need for selling and loss maximization.
This feature is not that useful for any small portfolio simply because you have to pay trading fees when you re-buy the cryptos you are selling off. Ultimately, these fees end up decreasing the influence of tax-loss harvesting. It can also cost so much more instead of helping you save up on taxes.
However, for bigger portfolios, tax-loss harvesting can actually offset around 3000 dollars in taxable income every year – now, that is significant.
4. Unified Accounting:
The Grand Unified Accounting tool by ZenLedger exports spreadsheets of a user’s complete transaction history across various wallets and exchanges. This includes a comprehensive, line-by-line breakdown of:
- Transaction value,
- Short-term and long-term capital gains,
- Cryptocurrencies involved,
- The exchanges used, and
- Transaction dates,
Your spreadsheet will also include calculated tax. In fact, if you work with any CPA to file taxes, then sharing such consolidated information is very helpful.
5. DeFi Integrations:
One of the primary weaknesses of cryptocurrency software is a lack of decentralized finance or DeFi app integrations. Yep! A cryptocurrency tax software typically covers the most well-known wallets and exchanges. But what if you trade, lend, or stake with different tools and DeFi apps?
Zenledger is not perfect in this case, but it supports over 100 DeFi protocols. Moreover, it’s relatively better than its competitors. In fact, the most notable DeFi protocols that ZenLedger supports are as follows:
- 1inch,
- Uniswap,
- SushiSwap,
- Paraswap,
- PancakeSwap, and
- AirSwap.
DeFi integrations are not as vital if you trade solely on different centralized exchanges, such as Gemini or Coinbase.
6. Professional Tax Help:
Zenledger integrates with TaxAct and TurboTax so that a user can import all their transaction details into those programs in case they are filing taxes for themselves. Users can also invite their accountants to join their ZenLedger accounts.
Zenledger offers paid tax experts if you require assistance with your crypto taxes. This is not something every cryptocurrency tax software typically offers.
For instance, here are three of their plans with their pricing (yep, pretty expensive!):
- Multi-Year Tax Report: Begins at 6,500 dollars per 2 years.
- Single-Year Tax Report: Begins at 3,500 dollars per year.
- Consultation: 295 dollars for a call lasting 30 minutes.
DeFi support and NFTs are also included with these pricing plans. But pricing entirely depends on the user’s tax situation. Moreover, complicated returns are relatively higher than those starting costs.
Are There Any Zenledger Fees?
Zenledger software’s free plan allows users to import as well as aggregate crypto transactions. Also, you will get a standard portfolio monitoring dashboard. But viewing as well as downloading tax reports along with using unified accounting or tax-loss harvesting needs a paid plan.
Here’s how Zenledger’s different plans end up getting compared in terms of annual pricing and features:
| Free | Starter | Premium | Executive | Platinum | |
| Annual Cost | $0 | $49 | $149 | $399 | $999 |
| Transactions | 25 | 100 | 5,000 | 15,000 | Unlimited |
| Downloadable Tax Reports | No | Yes | Yes | Yes | Yes |
| Margin Trading/DeFi/Staking | No | No | Yes | Yes | Yes |
| Crypto Income Reporting | No | Yes | Yes | Yes | Yes |
| Tax-Loss Harvesting | No | Yes | Yes | Yes | Yes |
In the starter plan, NFTs, staking, DeFi, and transaction limits are the primary restrictions. Moreover, new crypto enthusiasts can stick to starters, but normal traders or even someone else using DeFi protocols will need Premium.
Is Zenledger Safe And Secure?
So, the question is whether Zenledger is safe and secure to use – is the software legit?
Zenledger is normally safe and secure to use since users never offer their private wallet keys while connecting with wallets and exchanges. Moreover, while creating any API key, limiting the same to read-only access for your transactions is vital.
But the company was recently hacked when the contact information of users was up on the dark web. While the leakage did not have any transaction data, it is concerning. The company did claim afterward that a third-party vendor was responsible for the problem. Moreover, the company currently claims that the issue does not exist anymore.
Additionally, the company has an SOC 2 certification. This shows their commitment to offering customers with data security.
Please Note: SOC 2 is a group of standards that the AICPA (American Institute of Certified Public Accountants has developed for measuring an organization’s efforts to monitor and maintain a confidential and secure environment for customer information.
In a nutshell, the software does meet all vital industry standards for processing integrity, privacy, availability, confidentiality, and security.
The software claims to have some of the best security features in the industry.
Encrypted Storage:
Zenledger stores user’s data and personal information in an encrypted format. This means that even if anyone hacks into the software’s systems, they won’t be able to go through all the data since it is not readable without the accurate key.
HTTPS And TLS 1.2:
All communication between Zenledger and the user is encrypted with TLS 1.2 and HTTPS. This ensures that it is nearly impossible to eavesdrop on conversations or steal any data.
VPC Server:
Zenledger depends on a Virtual Private Cloud server. Now, this is a very secure way for data storage. In fact, this ensures that your nobody can directly access your information anywhere – the software stores your data on the VPC server.
Compulsory MFA Logins:
Multi-factor authentication is needed for logging into a user’s account. This ends up adding an additional security layer since it requires the user to input two different sets of information to access your account.
Read-Only Permission:
Zenledger boasts a read-only permission policy. This ensures that even if anyone tries to hack a user’s account, they won’t be able to do any harm or make any kind of change, for that matter. They can only view your information.
Amazon Guard Duty:
Zenledger depends on Amazon Guard Duty to monitor their full AWS environment and deal with threats. This, in turn, helps the software to keep their system secure and safe.
So, Is Zenledger Worth Your Time And Money?
If you possess virtual currencies, you must report any income associated to the IRS as per law. However, how complicated is this reporting? It happens to rely on your portfolio entirely, record-keeping, and trading style.
Zenledger is a software that helps users to file their taxes efficiently while saving time. However, at the high transaction tiers, the cost might make you look for other alternatives. Also, tools such as tax-loss harvesting might be a big help, considering it can save you money by only offsetting your capital gains.
Moreover, if you have only a few crypto transactions, then you can opt to use the tool’s free plan or file taxes with the help of software such as TurboTax before committing to (and paying for) any cryptocurrency tax software.
After all, if you need help with your regular trading or crypto taxes, software such as ZenLedger is worth your time and money.
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