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Peter is a writer and editor for the CNET How-To team. He has been covering technology, software, finance, sports and video games since working for @Home Network and Excite in the 1990s. Peter managed reviews and listings for Download.com during the 2000s, and is passionate about software and no-nonsense advice for creators, consumers and investors.
See full bioUpdated Apr. 15, 2022
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Peter is a writer and editor for the CNET How-To team. He has been covering technology, software, finance, sports and video games since working for @Home Network and Excite in the 1990s. Peter managed reviews and listings for Download.com during the 2000s, and is passionate about software and no-nonsense advice for creators, consumers and investors.
See full bioIf you sold, traded, earned, mined or staked cryptocurrency in 2021, the IRS wants to know about it, whether it was bitcoin, ether, binance, cardano, dogecoin or any other virtual currency. And you’ve only got a few days left to do it -- income tax returns must be filed by April 18, 2022.
Ever since the IRS clarified its stance on cryptocurrency in 2014, crypto taxes have been a way of life for those who sell or trade digital currencies. Just as profits on stock sales are taxed as capital gains, so are profits from crypto sales. And crypto traders need to document the value of every single sale or trade on IRS Form 8949.
Likewise, if you earned crypto as wages or from airdrops, hard forks, mining or staking, you’ll need to report that as income on your taxes. And if you’re mining crypto, there are different IRS forms depending on whether you’re doing it as a “hobby” or as part of a business.
If crypto taxes sound complicated, consider crypto tax software that connects to exchanges and can make reporting crypto transactions on your tax return easier. They won’t necessarily file your taxes for you, but they will sync up with popular tax filing software like TurboTax, H&R Block and Cash App Taxes and help navigate the complications of crypto taxes.
Crypto Tax Software Products
CoinTracker is one of the crypto data tracking products making noise in 2022. In January, CoinTracker announced it was partnering with CoinBase to simplify tracking taxable cryptocurrency activity for CoinBase users. TurboTax has also recently teamed with CoinTracker to let its users import crypto transactions.
CoinTracker integrates with more than 300 crypto exchanges and wallets to automatically track your cryptocurrency holdings, sales and transfers. The CoinTracker site boasts that it tracks 3% of the global crypto market, equaling about $50 billion of crypto assets.
Like most of the products in the collection, CoinTracker will create IRS Form 8949 for you and assist with various IRS schedules related to crypto income from airdrop or hard forks.
CoinTracker based its pricing on your number of crypto transactions. If you have 25 or fewer transactions, it’s free. A Hobbyist plan starts at $60 and includes up to 100 transitions. The Premium plan adds up to 1,000 transactions and starts at $200.
The cryptocurrency tax calculator Koinly currently works with 368 crypto exchanges, 78 wallets and 20 other crypto services (like the products in this collection.) If Koinly doesn’t include your crypto exchange, you can also import CSV files of crypto transactions.
Once connected to your accounts, it automatically tracks all your cryptocurrencies, identifies transfers and can even combine multiple trades into single transactions.
Koinly offers its crypto tracking service for free, but you’ll need to upgrade to a paid plan for the tax reports, including Form 8949. Similarly to CoinTracker, Koinly sets its tax service prices based on your number of crypto transactions -- $50 for 100 transactions per tax year, $100 for 1,000 transactions, $179 for 3,000, or $279 for 10,000.
Founded in 2017, ZenLedger crypto software lets users meet income tax obligations by aggregating crypto activity and converting it into the IRS forms and schedules used to file taxes. ZenLedger can easily export Schedule 1 (crypto income), Schedule D (crypto gains or losses) and Form 8949 (crypto sales and other dispositions).
An integrated tax-loss harvesting tool analyzes your transaction history to suggest tax saving opportunities you can take before the end-of-year deadline. ZenLedger also boasts a “Grand Unified Accounting” feature that compiles your entire crypto transaction history across all wallets and exchanges in one easy-to-read spreadsheet.
ZenLedger is free for 25 transactions or less per year. The Starter plan for $50 increases the transaction limit to 100, while the Premium plan at $150 gives you 1,000 transactions plus support for staking, NFTs and interest from decentralized finance (DeFi) activities. The Executive plan at $400 gives you all that plus unlimited transactions, and the Platinum plan at $1,000 includes all of the above plus two hours of premium support.
Funded by PayPal Ventures and other big investors, TaxBit offers an expansive free crypto tax software product -- there’s no cost for tracking unlimited transactions if you use any of the almost 500 exchanges included in the TaxBit Network. A Basic plan at $50 per year adds support for exchanges outside the network and historical records.
TaxBit’s Plus+ level ups the coverage with tax-loss harvesting features and income from DeFi for $175 a year, while the top level -- Pro at $500 a year -- adds a tax review by a CPA.
TokenTax is unique among crypto tax software -- you can either create tax reports for filing your taxes yourself or allow TokenTax to file your taxes for you. TokenTax provides tax filing services for 18 countries including the US.
There’s no free plan at TokenTax. The entry level Basic plan costs $65 a year, allows up to 500 transactions and only includes support for Coinbase and Coinbase Pro. Upgrading to Premium level at $200 a year adds support for all crypto exchanges, NFT and DeFi income, a tax-loss harvesting dashboard and up to 5,000 transactions. The $800 a year Pro level beefs up the transaction limit to 20,000 and support for the Foreign Bank Account Report and all margin exchanges.
If you want TokenTax to file taxes for you, you’re going to have to pay a lot. First you need to subscribe to the VIP plan, at $3,500 a year, which includes up to 30,000 transactions and all the features of lower plans, plus advanced crypto reconciliation and two 30-minute consultations with a tax expert. Then you’ll need to purchase a filing add-on feature that starts at $1,000.
Accointing currently supports 105 crypto exchanges via direct API integration and more than 300 exchanges via CSV files. It lets you track your crypto transactions and performance in real-time and claims to produce tax reports in five clicks.
Like most crypto software, Accounting charges for its service based on the number of taxable transactions you need to report. It starts off with a free plan that includes up to 25 transactions. You’ll get 500 transactions a year for $80, 5,000 transactions for $200 or up to 50,000 transactions for $300. All levels include a tax-loss harvesting feature.
Blockpit says that it supports “all top exchanges” of crypto, but only displays logos for 17 of them on its product page. The list does include Coinbase, Kraken, Binance and Crypto.com but there’s no sign of Gemini or BlockFi.
Blockpit offers free service for up to 25 transactions a year. Upgrading to its advanced plan will add email support and up to 25,000 transactions for $200 a year. If you need unlimited transactions, you’ll need to upgrade to the Professional level, listed at 600 euros a year (about $660 as of March 11).
CryptoTrader.Tax -- which will soon be rebranded as CoinLedger -- lets you import all your trades, add income info from mining or airdrops, generate tax reports and then import those reports into popular tax software like TurboTax or TaxAct. The site currently advertises integration with 100 crypto exchanges.
The nice thing about CryptoTrader.Tax is that every tier includes the same features. The only restrictions are based on trading volume. For $50 a year you get 100 trades at the Basic level. Upgrade to Day Trader level to get 1,500 trades for $100. The High Volume level gets you 5,000 trades for $200, and the Unlimited plan lets you track as many transactions as you like for $300 a year.
Bitcoin.tax provides a cost -conscious option for managing your crypto taxes. Import your trading, income and spending data, and Bitcoin.tax will calculate your capital gains and losses and export the IRS forms you need to complete your tax return.
The service lists 21 crypto exchanges -- including Binance, Kraken, Coinbase and Gemini -- that it specifically supports for automatically syncing your accounts. Trades from other exchanges can be imported with CVS files.
Bitcoin.tax is notable for its pricing, which is generally cheaper than most other crypto tax software. All crypto tax features are included at every payment level -- the only restrictions are on the number of trades. The Free tier allows up to 20 trades; the Premium tier allows up to 1,000 transactions for $40; Premium Extra at $50 gives you up to 5,000 trades; and Deluxe caps out at 10,000 transactions for $60.
Bitcoin.tax also partners with Gordon Law to provide full tax filing services. You can pay for a half-hour consultation with a crypto tax expert, or pay to have Bitcoin.tax file your taxes for you.
Bear.Tax includes integrated support for more than 50 crypto exchanges and servers and offers a generic CSV upload feature for any other networks crypto traders may use. It generates all the necessary IRS forms, and provides a useful “audit trail file” that shows every crypto transaction you’ve ever traded or sold, plus the fair market value at the time of any transactions.
As with CryptoTrader.Tax, Bear.Tax includes all of its features with every pricing plan -- the only difference is the number of trades. If you have up to 200 trades, you can use the Basic plan for $50 a year. For $150 a year, you’ll get up to 2,500 transactions, and for $500, up to one million (!!!) transactions per year.
FAQs
Cryptocurrency is a subset of virtual currency, and all of the IRS rules for virtual currency apply equally to crypto. To the IRS, virtual currency is defined as money that is not stored in US dollars or official foreign currency yet functions as a digital representation of value and works as a medium of exchange.
The IRS additionally defines “convertible” virtual currency such as Bitcoin or Ethereum as any virtual currency that can act as a substitute for “real” or fiat currency.
The IRS definitely doesn’t want tax filers to miss the virtual currency question that was added to the main 1040 and 1040-SR tax return forms last year -- it’s right there under your name and address:
“At any time during 2021, did you receive, sell, exchange, or otherwise dispose of any financial interest in any virtual currency?”
You do not need to check “Yes” if you only bought cryptocurrency with fiat currency – US dollars or official foreign currencies – in 2021. You do need to check “Yes” if you:
- Received cryptocurrency as payment for goods or services
- Received crypto for free that wasn’t a bona fide gift (e.g. airdrops)
- Received crypto by mining, staking or hard forks
- Exchanged crypto for property, goods or services
- Bought crypto by using cryptocurrency
- Sold cryptocurrency for US dollars or foreign currency
For federal tax purposes, virtual currency is treated as property. General tax principles applicable to property transactions apply to transactions using virtual currency.
In general, if you sold crypto, you’ll need to report like a stock sale, including the costs and dates when you purchased and sold it. If you earned cryptocurrency as income or from mining (as a hobby), that money goes on Schedule 1 (Additional Income and Adjustments to Income).
If you donated crypto or earned crypto as business income, there are different IRS forms and schedules you’ll need to complete. See the following table for a variety of crypto situations and the required IRS forms:
Crypto tax software helps you file your tax return with the IRS. Programs generally sync with crypto exchanges and wallets to track your purchases, sales and other transactions.
At tax time, most crypto tax software will export the various forms you need, saving you the time and trouble of tracking all your crypto transactions and completing IRS forms manually. Most crypto tax software charges money for their help with tax preparation. The amount is usually dependent on how many crypto transactions you make per tax year.
Crypto Tax Situations and Forms
Cryptocurrency Situation | IRS Tax Form |
---|---|
You sold crypto or exchanged one cryptocurrency for another | Form 8949 and Schedule D (Form 1040) |
You earned crypto from wages, airdrops, forks or mining as a hobby | Schedule 1 (Form 1040) |
You donated cryptocurrency | Schedule A (Form 1040) |
You earned DeFi or crypto interest or staking income | Schedule B (Form 1040) |
You earned mining income as a business or earned other business crypto income | Schedule C (Form 1040) |
More tax and crypto advice
- Best Tax Software for 2022
- Best Free Tax Software for 2022
- Best Bitcoin and Crypto Wallets
- Best Tax Software for Freelancers, Gig Workers and Self-Employed
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Peter is a writer and editor for the CNET How-To team. He has been covering technology, software, finance, sports and video games since working for @Home Network and Excite in the 1990s. Peter managed reviews and listings for Download.com during the 2000s, and is passionate about software and no-nonsense advice for creators, consumers and investors.
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