In recent years, a multitude of fledgling companies have started providing services in the form of crypto tax softwares. Through the software, a trader’s cryptocurrency imprint is used to calculate his/her’s taxable gains and maintain a record of all prior transactions. The hassle of carefully examining each individual crypto activity is nonexistent.
The softwares are exceedingly agile and reduce the margin for error by a long shot. Companies are packaging their services as a bundle with a host of complicit tools dedicated to assist and validate one’s entire crypto tax history. The coming decade will witness a proliferation of tools like these, increasing in demand noticeably closer to the annual tax filing season.
Industry professionals and analysts have stated, the best way of moving forward and to avoid attention from the Internal Revenue Service (IRS) is to utilize a crypto tax software, With more than hundreds of softwares to choose from, here are a few of the various types of tools and the services offered, intrinsic to the nature of the trader’s crypto routine, and there are free crypto tax calculators also available.
Token Tax
Declared as one of the easiest tools to file your cryptocurrency income and taxable gains. Token Tax is the solitary crypto tax software platform that supports all major exchanges. Through direct connections, crypto data is automatically imported, analyzed and calculated on behalf of the trader.
In case of transactions with no imports, a file can be uploaded containing the trading data and will be adjusted automatically on the platform.
Forbes listed Token Tax as one of the best softwares available for filling cryptocurrency taxes and for also possessing an excellent customer support team.
Bear Tax
Known for its simplistic user interface. Designed for easy understandability and focuses on an elementary based approach.
Contains a, ‘smart matching’ algorithm that journalizes all transactions; withdrawals and deposits made on all compatible exchanges. Thereby avoiding negative balances that could contradict the accuracy of one’s tax report.
Date of purchase, sale or trade of all assets can be easily accessed through the software. Bear tax is adaptable with both centralized and decentralized exchanges.
Also, data is accepted in a CSV format in case the exchange does not have a connection.
CryptoTrader Tax
A trader’s cryptocurrency can be calculated within minutes as CryptoTrader’s visual design language makes using the software a relative ease. All crypto data can be imported, double checked to make sure there is no overpayment and then, uploaded to Turbotax (which has a tie-up with CryptoTrader) for easy filing.
Over 20 exchanges have a direct connection to its platform. Trades once imported onto the software will calculate one’s tax liability and income, then export completed tax reports for filing including IRS Form 8949.
The software creates what’s known as an audit trail that dives in-depth into each single calculation used in one’s tax reports to obtain net cost basis and proceedings. This feature will be useful to some traders that require a close scrutiny of their crypto trading history.
Zenledger
The software comes with seamless integration to most leading exchanges and offers support for all major cryptocurrencies.
Transaction history is imported from the exchanges into the software which fills out one’s tax reports automatically; income reports, closing and donation reports, to name a few. Calculation of profit/loss statements for one’s tax representative if the need arises.
The documents are uploaded to the platform and into the tax return filings. If one is an occasional trader or miner, Zenledger’s software is uncomplicated and hassle free making the process less stressful.
Cointracker
This pioneering software incorporates a hybrid crypto asset tracker and tax calculation into one. All transactions, assets, etc. are synced automatically onto its platform form including local wallets and exchange activities. Up to date information is available; trading history, capital gains, etc. can be viewed when required.
A performance tracker, unique to Cointracker’s software lets traders understand a clear picture of ones’ performance across a timeline in their crypto investment. The platform also allows the user to login using a Coinbase account.
Speaking of which, Coinbase recently launched the Coinbase card.
A visa debit card issued in Croatia, Denmark, Hungary, Bulgaria, Iceland, Norway, Liechtenstein, Romania, Liechtenstein, and Sweden. Previously available in European countries only, this card links to a trader’s Coinbase account delivering them to utilize their crypto balances to pay in stores and online using Bitcoin, Etherum and Litecoin. With compatibility for more coins in the future.
Of late, powerful technology companies are now dabbling in the cryptocurrency game be it, in creating a platform or linking wallets to different exchanges. A south Korean organization is prepping to launch a blockchain powered halal food certification platform to offer food traceability solutions.
The Garage, a new player in the industry created by blockchain entrepreneurs, investors and researchers. Their means of business, to support any kind of blockchain startup. Similar to a hub where developers share opinions and strategize the growth of their client in terms of visibility and projection. Incubating around 20-25 startups annually.
The first of its kind, an online cryptocurrency casino by Mint Dice, lets users earn bitcoins through playing online games. With a rewards program up and running, the company plans to launch more crypto games next year.
Ventures materializing using softwares based encompassing crypto technology in some form are on the rise. It is not the tour de force for only financial institutions like some had estimated.
The reach is spreading to markets once thought were sluggish and dormant are expanding in sectors that are still untapped.
Crypto tax softwares are a mere testing ground for future solutions in the making.