Crypto taxes: doing them on your own is like trying to clean a hoarder’s house by yourself.
Where do you even start? How do you get through it all? Who has that much time or energy? And let’s be honest, would it even be right in the end?
If you think you can ignore it or wing it, think again.
Uncle Sam be like:
Here’s what you’re on the hook for:
- Selling cryptocurrency for fiat: Any time you sell crypto for USD (or any other normal currency), you need to report the capital gains or losses.
- Gifts of cryptocurrency (receiving): If someone gifts you crypto, you don’t have to report it as income at the time of receipt. But when you sell or trade it later, you need to report the capital gains or losses based on the original cost basis of the person who gifted it to you.
- Gifts of cryptocurrency (giving): Sent bae some Bitcoin? If it’s over a certain amount, it may be subject to gift tax reporting.
- Using cryptocurrency to buy stuff: Whether you’re buying a purple Porsche 911 or an iced coffee from Starbucks, it’s considered a sale and you’ve got to report it.
- Receiving cryptocurrency as payment: Got paid in Ethereum? That’s income, and it needs to be reported as such.
- Trading one cryptocurrency for another: Swapping $ETH for $TOPIA? That’s a taxable event, even if you don’t cash out to fiat.
- Mining rewards: If you mine crypto, the fair market value of the coins at the time you receive them is considered taxable income.
- Staking rewards and airdrops: Any crypto you earn through staking or airdrops must be reported as income based on its value when you receive it.
- Earning interest on crypto: If you’re earning interest on your cryptocurrency holdings, that interest is taxable.
- Cryptocurrency from DeFi transactions: Any gains or income from decentralized finance activities, like yield farming, are taxable.
- Receiving NFTs as gifts: Same as being gifted crypto.
- Purchasing NFTs with crypto: Buying an NFT with cryptocurrency is treated as a sale of the crypto, so you’ll need to report any gains or losses on the crypto used in the transaction.
- NFT sales: Selling an NFT? The proceeds are treated as income, and if you created the NFT, it’s taxed as ordinary income. If you purchased the NFT and then sold it later, you’ll need to report capital gains or losses based on its appreciated or depreciated value.
And that’s not even an exhaustive list.
And some of you horrible, dirty degenerates have used multiple wallets and exchanges, haven’t you?
So, come tax time, you’ll need to account for all the above (and more) via Form 8949, where you’ll list every crypto transaction with dates, amounts, and gains or losses, and then summarize it all on your Form 1040 when you file your income tax return – at an absolute minimum.
Story time:
I had been buying, holding, never selling, but swapping crypto for three years before I finally got around to Googling the rules.
I figured since my portfolio was way down and I never sold, I was in the clear.
But when I learned that swaps were taxable, my stomach nearly fell out of my butt!
No way I was gonna go back through thousands of transactions and meticulously list them in these forms.
Honestly?
I’d rather eat a urinal cake from a Flying J truck stop.
So my next Google search was “what is the best crypto tax software?”
After digging deep, I determined the best answer is CoinLedger, which is why I’ve partnered with them.
When you click any of my affiliate links on this page, you can try CoinLedger for free.
Use coupon code CRYPTOTAX10 for a 10% discount if you decide to upgrade to a paid plan.
I’ll also earn a small commission, so we both win.
But let’s get down to brass tacks:
Why CoinLedger?
Here’s the quick and dirty:
- Free to get started: Sign up and start exploring the platform for free, with no commitment. Only pay when you need your tax report.
- Safe to use: Your data is protected with top-tier security, and CoinLedger doesn’t sell your information to third parties.
- Comes with a portfolio tracker: Pulls data from all of your wallets and exchanges, letting you see your real-time gains or losses in a simple, easy-to-read chart format.
- Import transactions automatically: Seamlessly import your crypto transactions from any exchange, wallet, and platform – no manual entry necessary.
- Crypto taxes done in minutes: CoinLedger takes the stress out of tax season, saving you serious time and keeping you from huffing glue to cope.
- Real-time tax calculations: Instantly see your capital gains, losses, and income adjust with each trade, helping you make informed decisions throughout the year.
- Supports all the things: Whether you’re trading, staking, mining, or flipping NFTs, they’ve got you covered.
- Tax loss harvesting: Strategically reduce your tax bill before year end.
- Official tax reports: Produce the exact forms the IRS wants, accurately filled out, with the click of a button.
- File with ease: Download your completed tax forms to file yourself, send to your accountant, or import to your preferred filing software.
Pricing and plans
All plans come with the essential features, even the Free Plan.
Only upgrade when you need to generate tax reports or integrate with tax software like TurboTax, TaxACT, TaxSlayer, and more.
The plan you choose will depend on the number of transactions you need to import.
All reports are a one-time purchase per tax season and come with a 14-day money-back guarantee.
Here’s your options:
| Plan | Price | Txns |
|---|---|---|
| Free | $0 | unlimited |
| Hobbyist | $49 | up to 100 |
| Investor | $99 | up to 1,000 |
| Pro | $199+ | 3,000+ |
Reports are available from 2010 to 2023 since, obviously, 2024 isn’t over yet.
But don’t worry, you can still monitor your 2024 status as it changes. This is especially handy if you’d rather avoid the last-minute surprise of realizing, “Oh shit, I owe $150k I don’t have.”
How to use
Here’s a demo from the CoinLedger team:
As you saw, Coin Ledger handles your crypto taxes in just three easy steps:
- Import your transactions.
- Preview your report.
- Download with one click.
About as difficult as ordering an Uber, huh?
And how awesome was the portfolio tracker? I don’t know about you, but I like knowing, at a quick glance, whether I should be popping champagne or sobbing into a six-pack.
Alternatives
When it comes to crypto tax solutions, CoinLedger isn’t your only option.
But after sizing it up against popular tools like Koinly, CoinTracker, ZenLedger, Coinpanda, Crypto Tax Calculator, and even Intuit TurboTax Premium, CoinLedger emerged victorious.
Whether it was complicated interfaces, getting nickel-and-dimed for every feature, hidden pricing schemes, or complaints about missing altcoins, CL simply did it better.
And with an Excellent 4.8-star rating on Trustpilot, thousands of satisfied customers agree.
Even Reddit – the internet’s version of your alcoholic uncle, who you have to wrestle the vodka bottle away from once he starts getting racist out loud – had good things to say about CoinLedger.
The consensus, after skimming hundreds of reviews? It sure as hell beats doing it yourself.
Final verdict
If you’d like to avoid a tax season meltdown and crush crypto taxes and portfolio tracking the easy way, CoinLedger is for you.
It’s granny-proof, affordable, risk-free, and it does everything you need it to do – and then some.
It helps you make smarter moves so you can slap away the government’s grubby little paws and keep more of what’s yours.
The bottom line?
CoinLedger takes crypto taxes from panic attack to piece of cake, and I think that’s worth every penny.
Tap the pink button below and use code CRYPTOTAX10 for 10% off any plan.
FAQs
What does CoinLedger do?
Tax software, portfolio tracking, and education for crypto users.
And by users, I mean people who YOLO’d their entire life savings into dogwifhat and pepe.
Is CoinLedger free?
Yes, you can create a free account, sync unlimited transactions, and track your tax situation in real-time.
You only pay when you need a tax report or integration with tax software.
No different than going to a strip club – gawk all day, but if you want those cheeks clapping in your face, you’re gonna have to pony up.
Okay, so how much does CoinLedger cost when you upgrade?
Anywhere from $49 to $199+, depending on how many transactions you’ve racked up.
Honestly, I would’ve paid 10 times that just to avoid the nightmare of combing through and recording thousands of degenerate buys and swaps.
It would’ve taken days to manually relive all my bad decisions – and probably left me blind with carpal tunnel by the end of it.
What’s the refund policy?
If you request a refund within 14 days of purchase, haven’t downloaded any tax reports, and can’t generate an accurate report due to a bug or limitation, you can get your money back.
In other words, if you change your mind, too bad. Flip-flops are for the beach, not refunds.
Is CoinLedger safe to use?
Absolutely. Coin Ledger uses bank-level encryption to protect your data and only has “read access” to your transaction history – not your funds.
They also follow strict privacy standards, so your personal and financial info stays as secure as if you had an older brother on the football team looking out for you.
Does CoinLedger report to IRS?
Snitches get ditches, and CoinLedger knows better. They don’t report anything to the IRS – that’s on you.
But remember, the blockchain’s an open ledger, so it’s not exactly a secret hideout.
My advice?
Don’t try to get cute – you don’t want that smoke. Pretty sure the IRS invented the fuck around and find out chart.