An exponential surge in the popularity of cryptocurrencies helped new-age investors, traders, and miners usher in a gold rush never known in history before. With a boom in the cryptosphere, revenue authorities of many countries took notice of this huge financial revolution and stressed upon the need for crypto traders, investors, collectors and even hobbyists to pay taxes. Unsurprisingly, a need for the best crypto tax software arose in the crypto community.
If you are a crypto trader or investor, it is pertinent to pay taxes on your crypto income. Any kind of tax evasion (even by mistake) would land the tax collectors straight at your door. Hence, it is very important that you use a reliable and best crypto tax software that calculates taxed accurately so that you can invest freely. Here are some Non-taxable crypto activities (as of 2021) that you must know about:
Non-taxable crypto activities
- Buying crypto with any fiat currency is non-taxable.
- Gifting crypto to your friend and family.
- Moving your cryptocurrency from one wallet to another or between crypto exchanges is also non-taxable.
- Donating any cryptocurrency to non-taxable charities or organizations is non-taxable.
Here’s a list of taxable crypto activities
While it is clear that you do not have to pay tax on every crypto engagement you partake in, there are certain cases where taxes have to be paid. For instance, cryptocurrency trading and investment activities require you to pay tax. What’s more, these activities cut across the taxation system of almost all the countries around the world. Let’s find out.
- You are taxed when you sell your cryptocurrency for fiat currencies such as USD, GBP, EUR, AUD, JPY, INR and more.
- You are taxed when you exchange or swap your cryptocurrency for another cryptocurrency.
- You are liable to pay taxes when you use your crypto assets to pay for goods or services
- Lastly, you are liable to pay tax when you receive cryptocurrency as earnings whether it is from mining or as payment in lieu of services offered to a third-party entity.
So, are you ready to find out the best crypto tax software that will save you all the brainstorming and hassle involved in keeping a tab of what is taxable and/or non taxable. Without further ado, let’s dive in.
6 of the Best Crypto Tax Software 2021
A comprehensive tax calculation and reporting software, ToekenTax is a must-have tool for every crypto trader. The platform has made the entire process of crypto tax filing hassle-free by integrating with almost every crypto exchange on the market. Not to mention, TokenTax is compatible with thousands of cryptocurrencies, including new altcoins so you can rest assured about TokenTax’s calculation and reporting dashboard analytics.
For crypto traders, minimizing their losses and maximizing gains is the magic mantra and TokenTax makes that a reality thanks to its minimization algorithm. This nifty feature recommends the hottest coins that you should sell right away to minimize taxes that you pay on crypto activities and helps traders make optimal use of their crypto portfolio and the current taxation system.
One of the best crypto tax software for tax calculation and reporting, CoinTracking is a popular crypto portfolio management platform that gives budding crypto traders access to an elaborate set of data in one uniform and easy-to-read analytics dashboard.
What’s more, Cointracking keep a tab of your crypto balances and tracks trading milestones to assist users in making sound financial decisions.
With extensive support for traders, investors, and miners in over 100 countries, Koinly is a bespoke modern portfolio tracker and crypto tax calculator software that makes tax calculation and analysis a walk in the park. Koinly is one of the best crypto tax software that considers the accounting system of all supported countries while calculating taxes via country-specific tax forms.
For instance, Koinly can generate tax forms such as the Capital gains summary if you are in the UK, the Form 8949 and Schedule D if you are a US taxpayer or the K4 if you are a citizen taxpayer of Sweden. Not to mention, Koinly supports over 6000 cryptocurrencies, 300 crypto exchanges, and 68 wallets such as Ledger Nano X, Exodus, Trezor, and more.
Are you looking for simple and intuitive crypto tax software that quickly calculates tax without getting entangled in complexities? Look no further than CoinTracker whose super user-friendly dashboard calculates and reports tax that can be easily assessed by even beginners.
Buoyed by its impressive fleet of crypto investment analysis tools, CoinTracker assists users in making sound trading decisions on the go. All together, CoinTracker is one of the best crypto tax software on the market.
A dream come true for professional crypto investors, Zenledger is a reliable tax calculator that can analyze data from many crypto exchanges, crypto assets, and fiat currencies.
The UI is smooth and responsive and Zenledger keeps the dashboard simple and succinct without adding extra bells and whistles. Hence, newbies getting started with crypto investment can seamlessly navigate the platform and calculate their due tax returns without any hassles.
Rounding off our list of the best crypto software is Blox, a crypto tool that can organize the daily activities of crypto traders and investors in a uniform dashboard. Essentially it is an all-in-one tool, that can come in handy as a tax calculator or a bookkeeping platform for accounting purposes.
What’s more, Blox boasts a neat crypto management tool through which you can track your extensive cryptocurrency portfolio and manage daily trading activities on the go. As well as classifying your transactions and earnings, Blox caters to wide diaspora of professionals ranging from cryptocurrency financial advisors, institutional investors to individual traders and accounting firms.
SEE ALSO: 6+ Best Crypto Trading Bots in 2021