As Tax season approaches, you will want to get a handle on your crypto taxes, especially for DeFi. We’ll go over some of the top crypto tax software for both DeFi and centralized exchanges.
Crypto tax software has become an essential tool for cryptocurrency traders and investors. As more and more people learn about crypto and enter market, the need to properly report these assets for tax purposes increases dramatically. Because of the sheer number of transactions that you can have with crypto, it really helps to have the appropriate software to help track and calculate your gains and losses. In the rest of this post, we will explore the benefits of using crypto tax software and provide an overview of some of the best options available on the market today. Whether you are just a beginner to the crypto world, or a seasoned crypto trading veteran, this guide will give you a few recommendations on crypto tax software to help you find the best solution for your needs.
Here’s a summary of the top 4 softwares that I go into detail about. You really can’t go wrong with any of them, and I would recommend you decide based on number of transactions you need and whether you like the user interface.
DeFi tax software is a tool designed to help individuals and businesses keep track of their DeFi investments and accurately report the resulting crypto gains and losses for tax purposes. The software works by automatically tracking transactions, recording your cost basis, calculating gains and losses, and generating reports for any given tax year in a format that can be easily submitted to tax authorities. You simply have to connect your DeFi wallet to your tax software.
Some DeFi tax software also integrates with popular DeFi platforms, allowing users to seamlessly import transaction data and generate accurate tax reports without having to manually enter information.
Benefits of Using DeFi Tax Software
Increased Accuracy: DeFi tax software eliminates the need for manual calculations, reducing the risk of errors in tax reporting. The software automatically tracks transactions, calculates gains and losses, and generates reports in a format that can be easily submitted to tax authorities. It will automatically keep track of your cost basis, so you don’t have to track it yourself.
Time Savings: DeFi tax software saves users time by automating the tracking and reporting process, reducing the need for manual entry and calculations. This can be particularly beneficial for individuals and businesses with large portfolios and complex transactions.
Cost savings: Some softwares will help you estimate your tax burden by simulating taxable events and helping you forecast your tax burden for the year. They will also help you understand your crypto gains and losses for a given tax year so that you can work to offset them with late year transactions.
Easy Integration: Many DeFi tax software solutions integrate with popular DeFi platforms, allowing users to easily import transaction data and generate accurate tax reports. This makes the process of tracking and reporting DeFi investments quick and easy.
Compliance: DeFi tax software helps individuals and businesses stay compliant with tax laws by ensuring accurate reporting of gains and losses. This can help to reduce the risk of penalties and other legal issues.
CoinLedger Defi Tax Software is a comprehensive tax management tool specifically designed for decentralized finance (DeFi) users. It automates the complex process of calculating taxes on DeFi trades and provides accurate, up-to-date information to ensure compliance with tax regulations.
– Crypto Gary
Automated transaction import: CoinLedger can automatically import transactions from major exchanges and wallets, making it easy for users to track their crypto transactions.
Tax form generation: CoinLedger can generate all the necessary tax forms for filing taxes, including Form 8949, which is used for reporting capital gains and losses.
Capital gains and losses calculation: CoinLedger can calculate capital gains and losses for users, which can help them to minimize their tax liability.
Tax loss harvesting: CoinLedger can identify opportunities for tax loss harvesting, which can help users to offset their capital gains and reduce their tax liability.
Integration with accounting software: CoinLedger integrates with popular accounting software like QuickBooks and Xero, which can make it easy for users to reconcile their crypto transactions with their traditional financial transactions.
User-friendly interface: CoinLedger has a user-friendly interface, which makes it easy for users to navigate and understand their crypto taxes.
Security: CoinLedger uses bank-level security to protect user’s data and transactions.
Customer support: CoinLedger offers customer support through email and live chat, which can help users to quickly resolve any issues they may have.
Cost-effective: CoinLedger is cost-effective compared to other crypto tax software on the market.
Audit trail: CoinLedger provides an audit trail of all the transactions, which can help users to keep track of all their transactions and can be useful in case of an audit.
My top choice given the ease of use and the numerous integrations that it offers. You can’t go wrong with CoinLedger.
ZenLedger is a crypto tax software that specializes in providing DeFi (decentralized finance) tax reporting services. It provides a comprehensive solution for tracking and reporting DeFi transactions, including DeFi trades, yield farming, and liquidity mining.
– Crypto Gary
Accurate tax calculation: Zenledger uses advanced algorithms to accurately calculate taxes owed on cryptocurrency transactions, ensuring users are fully compliant with tax laws.
Automated tax reports: Users can easily generate automated tax reports, eliminating the time and hassle of manual reporting.
Supports multiple exchanges and wallets: Zenledger integrates with multiple cryptocurrency exchanges and wallets, providing a comprehensive view of all crypto-related activities.
DeFi Support: The software specifically supports DeFi transactions, ensuring that all activities on decentralized exchanges are accurately captured and reported.
Security: Zenledger uses advanced security measures to protect users’ data and ensure the confidentiality of personal information.
User-friendly interface: The software has a user-friendly interface that makes it easy for users to understand and utilize the platform.
Real-time data tracking: The software tracks data in real-time, allowing users to stay up-to-date on their crypto-related activities.
Multiple currency support: Zenledger supports multiple currencies, making it easier for users to manage their crypto assets and tax obligations.
Expert support: The software provides access to expert support, ensuring users have the resources they need to make informed decisions and accurately file their taxes.
Affordable pricing: Zenledger offers affordable pricing options, making it accessible to individuals and businesses of all sizes.
Tied for second and still a good choice, ZenLedger offers many different plan options and a 14 day trial.
Koinly is a DeFi-focused crypto tax software that helps users manage their cryptocurrency taxes by providing a great tax reporting solution. It supports all major cryptocurrencies, DeFi protocols and exchanges, and provides a user-friendly interface for tracking all of the user’s crypto assets, trades and income.
– Crypto Gary
Automated Tracking: Koinly tracks all of your cryptocurrency transactions automatically, saving you time and reducing the risk of manual errors.
Wide Coin Support: Koinly supports over 5000 cryptocurrencies, including all major coins and many lesser-known ones, making it easy to track all of your holdings.
Tax Reports: Koinly generates detailed tax reports for multiple countries, including the United States, Canada, Australia, and the United Kingdom, making it easy to file your taxes accurately.
DeFi Support: Koinly integrates with popular DeFi platforms, including Uniswap, Curve, and Aave, allowing you to accurately track your DeFi investments and profits.
API Integration: Koinly integrates with popular exchanges and wallets via API, allowing you to import all of your transactions automatically, saving you time and reducing the risk of manual errors.
Portfolio Management: Koinly offers a comprehensive portfolio management tool, allowing you to track your cryptocurrency investments, profits, and losses in one place.
Security: Koinly uses top-level security measures to protect your data, including SSL encryption, two-factor authentication, and secure backups.
Easy to Use: Koinly is user-friendly and easy to use, even for those with limited technical expertise.
Affordable: Koinly offers affordable pricing plans for individuals and businesses, making it accessible for a wide range of users.
Expert Support: Koinly offers expert support to help you with any questions or issues you may encounter, ensuring that you get the most out of the software.
Koinly is another great choice with a fairly generous free tier that only limits you by not generating tax docs. Great choice for Defi.
CoinTracker is another popular DeFi tax software solution that provides automatic tracking of DeFi transactions, capital gains calculations, and tax report generation. It also integrates with popular DeFi platforms, including Uniswap, Compound, and Aave. Some of the benefits of CoinTracker include:
Automated transaction import: CoinTracker can automatically import transactions from major exchanges and wallets, making it easy for users to track their crypto transactions.
Tax form generation: CoinTracker can generate all the necessary tax forms for filing taxes, including Form 8949, which is used for reporting capital gains and losses.
Capital gains and losses calculation: CoinTracker can calculate capital gains and losses for users, which can help them to minimize their tax liability.
Tax loss harvesting: CoinTracker can identify opportunities for tax loss harvesting, which can help users to offset their capital gains and reduce their tax liability.
Integration with accounting software: CoinTracker integrates with popular accounting software like QuickBooks and Xero, which can make it easy for users to reconcile their crypto transactions with their traditional financial transactions.
User-friendly interface: CoinTracker has a user-friendly interface, which makes it easy for users to navigate and understand their crypto taxes.
Security: CoinTracker uses bank-level security to protect user’s data and transactions.
Customer support: CoinTracker offers customer support through email and live chat, which can help users to quickly resolve any issues they may have.
Cost-effective: CoinTracker is cost-effective compared to other crypto tax software on the market.
Portfolio tracking: CoinTracker also allows users to track their portfolio, which can help them to understand the performance of their investments and make informed decisions.
2023 starting price: $53
The best crypto tax software depends on individual needs, but some factors to consider when choosing a software include:
The ability to import transactions from multiple exchanges and wallets
The ability to generate tax forms for filing taxes
Features for calculating capital gains and losses
User-friendliness and ease of use
Security and data privacy
Integration with accounting software
It is also important to note that the best crypto tax software for you may not be the cheapest. Take into consideration the number of transactions you have and think you may have in the future so you can potentially upgrade if you have a lot of trades in one year. Whatever you end up choosing will help you to accurately report your gains and losses and avoid any penalties from IRS.
Another important feature to consider is the level of customer support provided by the software. Some crypto tax software companies offer live chat and email support, while others may only offer support through a knowledge base or FAQ section. It is important to choose a software that offers the level of support that you feel comfortable with.
To summarize: the best crypto tax software will depend on your individual needs and preferences. It is important to research and compare different options, and choose one that offers the features and support you need to accurately report your crypto taxes. It is also important to work with a tax professional to ensure that you are reporting your crypto taxes correctly and to avoid any penalties from the IRS.
1 thought on “Best crypto tax software for defi to use in 2023”
Pingback: Best tools for trading crypto - How to Defi - Crypto Education