The only certainties in life it is said are death and taxes. With that said, taxes do not need to be as tragic as death and hopefully, with the right help, you will not have too ponder death come tax day.
In this article, we will look into several different pieces of crypto software that help simplify the complexity of cryptocurrency reporting and show you some smart ways to help reduce your tax burden.
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Having to calculate and track every crypto trade is incredibly tedious, if not impossible if you are making dozens of trades a day. Crypto tax laws are fairly complicated and many accountants are even confused when it comes to tax laws, especially since each country has its own tax system in place.
This is where crypto tax software comes into play. By using cryptocurrency trading software to track crypto prices, as well as your trades, you can easily track and get the reports you need for the taxman in just a few clicks.
The alternative is that you would have to go back and calculate and track every trade you did over the year in order to calculate your tax obligation.
There are a few different ways that crypto tax software can help you.
When choosing a cryptocurrency tax software you likely have many questions such as:
Let's see if we can answer some of these questions for you.
Crypto tax services not only give you the ability to track transactions in real-time , but they also help with the reporting process. After creating your report, it can be exported directly into any third-party personal accounting software where it then can be added into your overall tax return.
The tax software can alternatively be given to any qualified accountant or individual who is responsible for filing for your taxes. The crypto tax software simplifies the reporting process as automatically searches and documents all trades instead of having to do it individually. The output can then be used with any other tax software that you use to file taxes with or taken to an accounting firm.
Cryptotrader.tax is a user-friendly crypto tax software that provides a lightning-fast way to calculate a portfolio's capital gains, losses and taxes owed. The software is capable of making calculations and deductions in several fiat currencies as well as seamlessly integrating with just about all of the major crypto exchanges.
This tool is more oriented to the US crypto market, though it does offer support to traders in any country that accepts LIFO (Last in-First Out) or FIFO (First In-First Out).
CryptoTrader offers free signups with pay at the end option which allows you to get a sense of the software and what it can do for you before you purchase which you have to do only pay if you are needing the tax reports. What makes this software so easy to use is that you can get a history of all your trades in a few clicks of a button.
Bear.Tax offers traders an easy way to file taxes by importing portfolios by API integration or by uploading CSV files. Beartax was made primarily for US residents in mind although it is still possible for non-US persons to benefit from it.
The software allows you to calculate crypto earnings such as gifts, staking rewards, airdrops, and voting rewards easily. What makes this, and other crypto tax software so valuable is that you can get all the tax information that you need in minutes instead of wasting hours and even days or your time trying to calculate all the transactions you have made over the previous year.
You also can integrate the software with other third-party tax software such as Turbotax which allows you the ability to gather all your tax data together in one place.
CoinTracking.info is one of the most popular pieces of crypto tax software that began back in 2013 and can be used in over 100 countries around the world with over 700,000 users, and over 1000 certified professional accountants and corporate customers using the platform.
CoinTracking has a database of over 8,000 different crypto assets and is supported by over 70 exchanges and currently at 8 different crypto wallets.
Some of their other analytic tools allow you to have a look at personal your portfolio analysis, trade imports, tax declarations, coin charts, coin trends etc...
There really is no way to avoid paying taxes....unless of course, you move. The only way to completely avoid paying taxes is if you move to countries that have no capital gains taxes on crypto. Establishing residency is no simple matter and will require more than just buying a plane ticket and renting an apartment.
Residency is usually determined by how many days you spend in a place a year, with many countries now adding a second layer of residency qualifications based upon economic ties to the country.
This is where taxable residency comes into play which is usually based upon whether you have significant ties to a country that are found in physical assets such as back accounts, ownership of physical property including houses, cars, or any other physical assets.
Taxes do not have to be complicated. Whatever your crypto tax situation there is a solution that may just allow you to pay less taxes, quicker and more easily than ever before. Get in touch for some crypto solutions.
For more info on crypto:
Why You Need A Plan B
Threats to Your Assets
Global Diversification Planning