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                                             Best Cryptocurrency Accounting Software
                                                                                      Best Cryptocurrency Accounting Software

Best Cryptocurrency Accounting Software

07 Dec 2020
Reading Time: 8 minutes

If there’s one thing that many people can agree on, doing taxes is unenjoyable because of how complicated they are. This is especially true if you’re a freelancer or uncontracted worker since you have to do all the work. From filing tax claims to complying with deadlines, the process can be tiring, so software platforms are becoming more heavily used. Even in the cryptocurrency space, you will find several crypto accounting software designed to help traders and businesses manage their transactions. They might use variety of cryptocurrencies, like eos currency or ADA currency, and the best thing is that crypto accounting softwares make it easier and simple.

Accounting helps businesses keep track of their income and expenses to monitor overall financial health. An accountant can organize your books and calculate your finances to avoid tax penalties and audits. Nowadays, there are several free personal accounting software Australia that can automate the process.

Accounting for Crypto Transactions

Whether you’re a beginner or a long-time trader, it can be challenging to keep track of your crypto transactions and record information manually. Now that cryptocurrencies are steadily growing in use, more individuals and businesses need to know how to manage their books. If you have this dilemma, you can use a crypto accounting software platform to account for your transactions and compute taxes. 

The massive Bitcoin evolution has turned cryptocurrencies into an asset class in itself, raising questions on how they’re taxed. According to the IRS, cryptocurrencies are treated as capital assets. This means you’d have to pay capital gains tax (CGT) if you earn a profit from your sale. However, the good news is that you won’t need to pay tax if you incur a loss from selling or spending your cryptocurrencies. 

Depending on where you live, you’ll need to follow specific cryptocurrency regulations. In Australia, CGT is charged when selling crypto for fiat currency or trading one coin for another. Cryptocurrencies received through airdrops are then subject to ordinary income tax using the coin’s value at the time of receipt. For personal purchases paid with crypto, you don’t have to pay tax as long as your total bill amounts to less than A$10,000.

Whether you’re trying to automate your invoices, calculate your crypto tax, or track your transactions, cryptocurrency accounting software can help you do all that. Traditionally, accounting software is used for recording transactions, monitoring balances, generating reports on insights, and the like. Cryptocurrency accounting software has similar functions, but the main distinction is that it’s designed for your digital coins. 

Top Crypto Accounting Software 

To keep track of your asset portfolio and organize your transaction records, you can check out some of these top crypto accounting software. 

  1. Koinly

Koinly is one of the best crypto accounting software due to its ease of use and versatility. It can import your data from essentially any ledger through API, so you can sync and collate all your transactions into a single platform. It’s perfect if you have multiple currencies in different wallets and trade in various exchange sites. You get a complete picture of your trading history, so you don’t need to check several platforms to track your performance.

With Koinly, you can track your crypto portfolio and get an overview of losses and gains, overall income, return on investment (ROI), and other metrics. The software can also help US taxpayers file taxes and pass audits. If you only need help calculating with your crypto tax, you can try out the free version. However, the paid version unlocks several other features like comprehensive audit reports, custom file imports, and many others, so it’s also worth considering.

  1. CryptoTrader.Tax 

This crypto tax software makes tax season less hectic by helping you fill out your reports and forms in three simple steps: 

Step 1: Import your trades from whatever exchange site you use.

Step 2: Add your crypto income over the taxation period

Step 3: Download your tax report.

Many other services will ask you to jump through hoops, but CryptoTrader.Tax makes the process easy and uncomplicated. You can start for free to see how well the software works for you, then explore their varying pricing models. Prices can vary from $49 to $299 per tax season based on your trading volumes and tax needs.

  1. Accointing 

This crypto accounting software is unique as it helps you track and record all your transactions to generate reports whenever you need them. You can connect all your wallets and exchanges to the platform and get real-time insights from your dashboard, accessible via mobile or desktop. Accointing also provides users with a market overview to help you track trends like the latest Bitcoin price.

With the software’s free version, you can import as many transactions as you want to, but tax reports can only be generated for up to 25 transactions. If you’re dealing with more taxable transactions, you can check out the other license options. 

  1. CoinTracking

CoinTracking is an all-around crypto tax software for analyzing your trades and generating tax reports. The platform analyzes your trades and transactions to give you an overview of your profits and losses. It can be adapted to tax laws for more than 100 countries, making it a versatile choice for crypto traders and companies. 

If you plan to enter the crypto space and start transacting, it’s important to file and pay your taxes on time. Doing this may not be fun, but failing to make payments can lead to the accumulation of debts, seizure of properties, or imprisonment. The IRS is particularly strict with non-filers, so if you commit tax evasion or help someone do it, you can go to jail for one to three years. 

The consequences of ignoring and avoiding your tax can be grave, so knowing when your cryptocurrency transactions are taxable will be essential. If you need help calculating your taxes, you can try out any of the crypto software mentioned above. It’ll be a handy tool to use in generating tax reports and tracking your profits and losses from crypto trading. 

If you need help finding out how much your crypto was worth when you bought it, click here and use our crypto tracker. We have all price records of any given cryptocurrency over the past few years.

Ronnie A. Rahman

Written by Ronnie A. Rahman
on 07 Dec 2020

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