In the USA, cryptocurrencies are treated by the IRS as property, similar to stocks. This means that you must pay capital gains on your investments that you have sold and income taxes if mining or earning cryptocurrency for work.
If you have made more than a handful of trades, and especially if you have used multiple exchanges, it can be a nightmare trying to calculate the capital gains even for an experienced accountant. Fortunately, there are a number of options for online cryptocurrency tax preparation services.
Our recommendation is to use Get Crypto Tax because of its cheap price, user-friendliness, and focus on anonymity.
This app has one of the slickest user interfaces and provides a hand-holding, wizard-style tutorial to help you extract your trade data from exchanges. It has chosen to focus on spreadsheet imports instead of API connections because, if you set up your API access incorrectly, the app could potentially trade with your money! They don’t have a large list of exchanges yet, but they are adding new ones almost every day; you can email them with recommendations.
Get Crypto Tax just launched April 2018, so if you sign up early enough, you can download your reports for free while they are beta testing – they only ask that you give feedback on any bugs you may find or features you would like to see. They plan to eventually price it around $10.
Bitcoin.tax has been in operation since 2013, so they have worked out the kinks by now and have a lot of options.
You can connect all of your exchanges to it via their API keys and it will import your trades and calculate the data for you to give to your accountant. You can even choose which cost basis you want to use and they will recommend which is cheapest; we don’t recommend using anything other than FIFO, however, as the other methods will raise red flags with IRS. If you do not want to give them access to your exchanges via API, you can still upload spreadsheets like Get Crypto Tax, but you have to reformat each exchange to their format which we found to be quite impractical.
Bitcoin.tax starts at $29.95 per year for 10,000 transactions and goes up to around $100 for higher volume traders.
Like Bitcoin.tax, Cointracking.info has been around since April 2013, so it has built a lot of features by now. Although we do not recommend it to the average user due to its overwhelming complexity, it can be a real boon to hardcore traders or accountants who are willing to invest the time to learn their way around.
The cheapest option for tax preparation costs 0.012 BTC ($84 with Bitcoin currently at $7,000 USD) and allows for 3,500 transactions. You can get unlimited transactions for 1 year for 0.019 BTC ($133) or unlimited lifetime for 0.289 BTC ($2,000 USD). This could be a great option for serious traders, although as more competitors enter the market and develop new features, we expect prices to come down.
Cointracker.io is another relatively new site that launched in August 2017. Like Get Crypto Tax, it has a pretty nice user interface. It does not seem to offer spreadsheet uploads but it can do API access like the other sites and even has a feature to read trades from your public wallet addresses.
Cointracker.io starts at $49 for 100 transactions, $149 for 1,000 and $999 for 15,000.
Disclaimer: This is not intended to be tax or legal advice. Please consult your own professionals.