Taxes are notoriously complicated — even more so when it comes to cryptocurrencies — and then there’s CryptoTrader.Tax, which is a crypto-based tax software platform that automates the whole tax reporting procedure.
This platform generates tax reports based on your historical data, which may be sent to your tax professional or integrated straight into your tax filing software.
CryptoTrader.Tax is designed to be the ultimate tax reporting service for cryptocurrency investors, saving them time and trouble as they prepare their taxes.
Tax reports generated by this platform are based on your historical data and can be provided to your tax professional or imported directly into your tax filing software — making it easier than ever before so you don’t have to worry about any of that tedious paperwork!
It’s no secret that taxation gets complicated when dealing with crypto assets; CryptoTrader.tax aims to make things a little more straightforward through automation of all aspects related thereto such as calculating gains/losses from trading activity, generating accurate reports (based upon user input), importing information automatically into popular income tax software like TurboTax.
CryptoTrader.Tax minimizes the time and effort required to prepare cryptocurrency taxes. The CryptoTrader.Tax service works easily with cryptocurrency exchanges to create rapid and accurate tax documents for crypto traders.
The CryptoTrader.Tax solution connects with every major exchange and platform to streamline and automate the crypto tax filing process.
Linking your exchanges, importing trades, and obtaining your tax returns are all straightforward.
CryptoTrader.Tax calculates your tax liabilities using the same methodologies that tax professionals utilize — so you can be confident you’re paying the correct amount while minimizing your overall crypto tax liability.
Additionally, creating an account is as simple as entering your email address, selecting a password, and accepting the terms and conditions.
With the proliferation of cryptocurrencies, casual hobby traders have frequently developed into experienced investors.
Their success, however, raises questions about the taxation of digital assets.
Capital gains tax is levied on cryptocurrency kept for investment purposes.
While the IRS defines Bitcoin and other cryptocurrencies as “virtual currencies,” they are not taxed similarly to regular currencies.
One of the most challenging aspects of crypto trading is handling the business’s taxes and paperwork. While the paperwork may appear simple for hobbyists, it may quickly become burdensome when dealing with thousands of trades.
When trading becomes more sophisticated, many people soon feel overwhelmed.
Assuredly, we suggest CryptoTrader.Tax to assist our clients in resolving their tax issues.
Additionally, CryptoTrader.Tax supports tax-loss harvesting, a strategy for lowering your overall cryptocurrency tax burden.
This software is excellent for professional traders who want to manage their cryptocurrency taxes and minimize their tax burden as much as possible.
Nonetheless, it provides options that are ideal for novice investors.
Are you having difficulty keeping track of your bitcoin trades’ tax documents?
Fortunately, CryptoTrader.Tax provides a straightforward tax solution for cryptocurrency investors.
We explain why CryptoTrader.Tax is a preferred cryptocurrency tax preparation software in our CryptoTrader.Tax review.
CryptoTrader.Tax can take away the pain of preparing your Bitcoin and cryptocurrency taxes, eventually saving you from an IRS crackdown! Here’s what to expect when signing up.
CryptoTrader.Tax is Compatible with TurboTax
Perhaps the most advantageous aspect of CryptoTrader.Tax is its broad integration with TurboTax, a more conventional tax software service that many individuals use to file their annual taxes.
Indeed, CryptoTrader.Tax is offered as an option in the base TurboTax solution for individuals who desire to import all of their cryptocurrency tax information with a single click.
If you typically file your taxes using TurboTax, CryptoTrader.Tax is likely to be the ideal option for preparing your crypto asset taxes due to the excellent compatibility between these two software services.
Once you’ve entered all of your cryptocurrency tax data into CryptoTrader.Tax, you can immediately import the app’s reports into the remainder of your TurboTax documents.
It’s worth noting that you must buy either the Premier or Self-Employment package from TurboTax in order to utilize the platform’s crypto-focused service.
CryptoTrader.Tax also includes a variety of features that assist customers in avoiding paying more taxes than necessary each year. The most important technique in this section is connected to the notion of tax-loss harvesting, which we briefly covered previously.
In summary, the tax-loss harvesting option will assist you in determining whether to sell a particular cryptocurrency in order to lock in a loss and reduce your overall tax burden.
Users may even use this function to offset part of the income taxes they owe by declaring losses on their tax records. CrypoTrader.Tax provides this service at all pricing tiers.
Although not all trades qualify for tax-loss harvesting, you don’t have to worry about determining this on your own—the sophisticated analysis provided by CryptoTrader.Tax takes care of it for you. Evidently, this is not a feature to neglect.
Integration with Crypto Exchanges
The ease with which cryptocurrency exchanges may be integrated is a significant appeal for new clients. CryptoTrader.Tax establishes the value of each transaction based on exchange records. Significantly, CryptoTrader.Tax will calculate the cost basis and fair market value of these transactions automatically based on historical data.
If you are still manually recording data, CryptoTrader.Tax can save you time and frustration.
To calculate your tax liability accurately, you must know the value of the cryptocurrency transaction at the time it occurred. CryptoTrader.Tax automatically collects and compiles your trading data from coin exchanges for your examination.
CryptoTrader.Tax automatically creates these tax report documents during the tax reporting process:
- Audit Trail Report: The software automatically generates an audit trail that indicates the figures used in every step of calculating your trading gains. The taxable events will reflect for all your records.
- IRS Form 8949: CryptoTrader.Tax automatically generates and fills this tax form for you to attach to your return. The report lists all your crypto trading gains, both short-term and long-term.
- Short- and Long-Term Gains Report: CryptoTrader.Tax records the gains and losses of your trading history, so you only need to prepare one report for all trades. Each crypto trade will be displayed with the calculation of net gains/losses, cost basis, and proceeds.
- Cryptocurrency Income Report: Your crypto income report provides a summary of all the cryptocurrency transactions you have made in the tax year. The report is broken down into three categories: income, mining, and gifts. It will be easier to complete your tax forms correctly when you know what each category means.
How To Set Up CryptoTrader.Tax Quickly
- Import your cryptocurrency trades. Begin by importing your cryptocurrency trading history into the software, including all years and exchanges. Using historical data, CryptoTrader.Tax will calculate the cost basis and fair market value for these trades.
- Add past crypto revenue. Include any historical cryptocurrency income sources like mining, gifts, or even exchange incentives such as airdrops. This step may be omitted if none of them apply to you.
- Produce your tax return. CryptoTrader.Tax will generate the IRS Form 8949 and a Cryptocurrency Income Report for each tax year. After importing all of your transaction histories, the final step is to examine your data and create your tax report.
- Submit your cryptocurrency taxes. Once your report is created, you can either import it into your preferred tax software, such as TurboTax or TaxAct, and file it yourself or send it to your accountant.
How Much is CryptoTrader.Tax?
CryptoTrader.Tax is an affordable crypto tax software on the market, offering four different paid tiers of their platform (including a free tier). We understand that your tax season is busy, and you need help to get your crypto taxes done quickly. Now traders can try out their platform before they commit. You import your crypto income and trading history for free and you don’t have to pay!
The free version has all of CryptoTrader’s features but will leave you to do some manual work yourself – so it doesn’t make for an ideal solution if you’re looking to last-minute finish your taxes this year!
The four paid tiers of CryptoTrader.Tax are known as Hobbyist, Day Trader, High Volume Trader, and Unlimited. The only real difference between most versions is the price (Hobbyist accounts cost $49 per year while Unlimited tier costs a whopping $299) and how many trades can be imported with each account type: 100 for Hobbyists; 1,500 for Day Traders; 5000 for High Volume Traders.
The Unlimited tier enables unlimited trade imports, at a cost of $299 per year. The high volume traders and those with an Unlimited account also receive priority customer support while Hobbyist and Day Trader users have to wait for live chat responses.
The best plan for the right person will vary based on needs so it’s important to take a look at all three options before deciding which one suits you better!
The money-back guarantee offered with CryptoTrader.Tax is not an empty marketing ploy, but rather a real opportunity for you to try out the service risk-free and possibly get your hard-earned cash back if it doesn’t deliver!
If you have been looking for another crypto tax software that can compare on features or price point, just take advantage of this offer while it lasts.
Tax Report Web App
You can use CryptoTrader.Tax through its web app, which signs you up for an account in minutes and enables the tax report creation process to begin instantly.
The platform integrates data from multiple platforms and exchanges so that all your crypto trade information is aggregated together with a few clicks of a button on their intuitive interface-no technical skills required!
Is Crypto Tax Software Worth It?
CryptoTrader.Tax is comparable to or more expensive than the majority of tax-filing software, despite the fact that it does not actually file your taxes for you.
While it integrates with TurboTax and TaxAct, you may still have to spend $100 or more to use those services to submit your taxes. Is it thus worth the money?
Frequently, the response will be “Yes!” for committed crypto traders. Many traders lack the thorough records necessary to create these reports independently.
If you retain such records, that is fantastic. You can quickly file your taxes using any type of tax software.
However, if you’ve been trading cryptocurrencies throughout the year and are just now recognizing (at tax time) that you should have been recording your losses and gains, you’ll want a service like this to assist you in filing an appropriate return.
CryptoTrader.Tax helps simplify the task of understanding and filing your cryptocurrency taxes by automating the process with a turn-key, easy to use tax reporting platform that relies on up-to-date data sources for accurate reports.
While CryptoTrader.Tax is not inexpensive, its pricing levels are comparable to or cheaper than those offered by rivals such as TokenTax.Co and ZenLedger.Io.