Juliet BFiling your tax return is not as complicated as you would like to believe. It's a doubt that comes up very often when we want to know how to file your crypto tax declaration. Here I have a tool that will satisfy you.
In fact, it has become easy to declare your crypto taxes since there is software that does it for us. You can also read the article on the 5 best crypto tax software to get an idea of the sites available to you.
This is an article that summarizes the online tool koinly : Here is a detailed overview of this platform for completing your Crypto tax return.
koinly is a site that offers a cryptocurrency tax calculator and a dedicated reporting platform. I think this is typically the kind of tools and software that the (ever more regulated) cryptographic world needed.
It was therefore time to present to you an ideal tool to allow you to carry out your crypto tax declarations more easily than ever.
Declaring your cryptos for taxes: an ordeal erased?
Already, it must be admitted, declaring your taxes in general is not an easy thing. But, then when you add cryptocurrencies, it becomes hell!
Crypto tax reporting can be a complicated and lengthy process depending on the person. The more a person uses cryptocurrencies, the more transactions they will have to process, the more elements they will have to declare. QED.
We quickly imagine the ordeal for people (even without being a trader) who carry out dozens of operations on multiple platforms, on a daily basis.
How do you go about it without going crazy or spending the year there?
It seems like the task is way too complicated or takes way too long.
Nonetheless, it is imperative that people file their crypto assets on time to avoid penalties and future repercussions. We don't joke with the Tax Office.
In fact, when it comes to completing crypto tax returns, people have several different options available to them:
- Take stock and summarize all your operations yourself.
- Hire an accountant (who knows and is an expert in the field) who will do the balance sheet.
- Use a crypto tax reporting platform (option that I am about to detail here).
koinly, one such crypto tax reporting platform. The platform describes itself as “the simplest and most reliable way to prepare your taxes on cryptocurrencies”.
To find out if it's really worth it, I tested the platform myself and I'll give you my opinion here.
Import your transactions from any platform, in one click.
The biggest difficulty when trying to calculate your taxes yourself for your tax return is to manage the (too) large quantity of transactions carried out on several exchange platforms.
Indeed, even a person who rarely uses cryptocurrencies will at least use two or three different platforms:
Example of an average crypto user:
- He buys bitcoins on Coinbase, then she buys a little Tezos, etc.
- Then, he will trade cryptos on Binance and make at least 30 different trades during the year.
- He will invest on platforms to generate interest, for example.
Can you imagine the work he had to do for these few operations? There, to do crypto tax declaration, he will have to go back to all the sites and identify all these transactions. In addition, we took a small example where a person uses cryptocurrency sites very moderately. His crypto tax return is therefore relatively "easy" to do.
And again, easy is a big word. Indeed, to properly file your crypto tax declaration, you must be precise and not forget anything!
Here, I am not yet talking about the euro/dollar conversion because often the platforms we use are in USD dollars…Yes, we are complicating the matter.
How to file your crypto taxes with Koinly
We must therefore carry out a conversion into fiat currency for each transaction in order to accurately calculate any gain or loss. Ideally, this is done with a stablecoin SO. Therefore, when dealing with many trades (crypto/token with today's value), it becomes a long and tedious task, with mistakes often made. It's completely understandable to make mistakes at this level of requirements, you might say.
This is where IT solutions like koinly take on their full meaning!
See how simple the process is:
Koinly then allows you to import in one click all your transactions from any exchange using the API import tool or uploading your transaction history files. Making your crypto tax declaration is therefore automated.
This will allow you to efficiently manage all your trading data on a specialized tax platform, and without the slightest effort.
Many supported crypto exchanges
First of all, we could wonder if the site takes into account the exchange platforms that we use.
Well, the answer is very quickly given. The site therefore allows you to directly import all your operations carried out on most cryptographic platforms around the world.
Please note that when you download your transactions, koinly Automatically establishes a fair market value and cost basis for them using accurate data.
This significantly increases the speed of calculating your taxes and significantly reduces the risk of errors being made. This is how you can have the correct amounts of your cryptographic assets added to your tax return.
In addition to your transaction data, you can also add other crypto earnings such as, for example, bonuses related to airdrops, gifts, extra bonuses, etc. Yes, you can add everything automatically, too.
Obtain a report for your automated tax return?
After importing all your data, you then review your transactions before generating your report.
You can also download your balance sheets by selected time period. Per month, per quarter or per year (whatever interests us most, generally).
For each tax year, koinly generates an Audit Trail Report, Cryptocurrency Income Report, Short and Long Term Sales Report, IRS Form 8949, and Year-End Positions Report. This shows you how it simplifies the entire process of making your crypto tax declaration in a simple and automatic way.
This is more useful for American tax residents, but the fact remains that what counts - even for a French tax resident - is the general balance sheet. Balance sheet from which we can simply add our precise financial data in our tax return!
I Add something else: koinly supports FIFO, LIFO, and HIFO accounting methods, which means people from almost anywhere in the world can use this platform for their cryptocurrency taxes.
How to calculate your capital gains to declare your crypto taxes?
Users can also have their wins and losses calculated in any fiat currency. That is, you no longer need to manually convert currencies; You can download your document in EURO currency directly.
When calculating your taxes, koinly uses the same methods as those used by tax specialists and certified accountants.
It ensures that you pay the correct amount and don't overpay your taxes either, on transactions where you didn't win for example. The site has built-in tax loss harvesting tools to help you reduce and offset your capital gains. This is certainly what will interest the taxpayer who is always afraid of declaring everything at the risk of having to pay for everything.
The Koinly website then also allows you to import your capital gains and losses directly into the online versions, in PDF or other Excel format. It's up to you.
In terms of security, again, there is no fear. In fact, the platform complies with PCI level 1 and uses SSL encryption to guarantee the security of your data on the platform.
How much does it cost to use software like Koinly?
Koinly like all the others crypto tax software is a paid service to download reports for a fiscal quarter.
It has a tiered pricing structure, meaning the more transactions you make during tax season, the more you pay.
Basically, and it's completely coherent and logical. A person will pay more to the extent that they have more transactions and data to manage.
This allows those with a small number of operations to pay a minimal amount, and even for those who require the “Unlimited” tier, prices are still very competitive. It will always cost less than hiring an accountant (expert in cryptocurrency, which remains rare and expensive) to do this work.
In fact, it seems that even accountants use this type of software to avoid any possibility of making mistakes.
Once you have downloaded a report, you can make unlimited revisions to it for that year.
In my personal case, for example, I chose the first package at $49 per fiscal quarter. Truly, remarkable value for money.
Users can pay for their subscription using a Visa, MasterCard, or American Express credit/debit card.
Important note:
🙂 However, it is important to understand that you only need to pay when you are ready to download your tax report. This means you can create an account, import your data and view your transactions for free, without having to pay.
Note: If you need previous reports for the year 2018 or even earlier, you can just as easily do so, and therefore obtain a 15% reduction on the price of the normal report.
How to create an account on Koinly and file your crypto taxes?
It's very quick and above all very easy to create an account on Koinly, with the possibility of creating an individual account or a professional tax account. I told you above that accountants and other financiers also use this tool.
To create an individual account, users simply need to add an email address and create a password. As simple as that as in most sites, you might say.
This process only takes a few seconds, and once you have created your account, you can immediately start integrating the exchanges you use, upload your data and use the different platform tools. Crypto tax declaration
Yes, you do not need to provide credit card or payment details when creating an account.
In fact, Koinly allows everyone (beginner or experienced user) to be able to declare their cryptocurrencies for taxes in the simplest way possible.
What could take hours, or even days, while taking your mind, can now be done in minutes on the platform.
On top of that, the site ensures that your crypto tax return is accurate and compliant, mitigating the risk of errors such as having to overpay your crypto taxes.
What are the people asking for, eh?
Conclusion: Koinly, the best software for declaring cryptos for taxes?
If you've read the article this far, I think you know my opinion. I am really amazed by these kinds of initiatives.
I mean, having tried to do my crypto tax return myself, it was horrible.
😎 I am sure that these tools are the future when it comes to taxes, taxes and taxes in general related to taxes.
The only fault I find with this software is the fact that the site is in English, but hey, you will tell me, in the crypto world, we are a little used to it after all. All sites are almost in English
If at any time a user needs assistance during the tax filing process, Koinly has established a professional online support team who will assist you with any questions, here.
So, what are you waiting for to try? It's free!
👋 Read the article 5 Best Crypto Tax Software
Note: No financial advice is given in this or any other article on zonebitcoin. This is information of which you are the sole judge and master. Be responsible with your investments and only invest as much as you are willing to lose.
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