Because cryptocurrency exchanges increasingly requires KYC (know your customer) and it provides information to governmental tax offices, it's more important than ever to understand your tax obligations on cryptocurrency as a small business. It will also help to know what what the top cryptocurrency tax software for small businesses are so that you can better understand your tax liability.
This is especially important as tracking technology improves the ability of government agencies to identify your activity and capital gains through the analysis of public ledgers.
When thinking about how you might document all your trades or staking activity, it can be tricky to know where to start — but there is an easier solution. Take a look at these top cryptocurrency tax software providers that we here at ScottHall.co recommend so you don't have to worry about taxes and instead, focus on the rest of your business.
CoinLedger was founded in 2018 to support cryptocurrency traders and investors with their tax liability reporting requirements. It boasts a straightforward and user-friendly UI, making it easy to link all of your exchange accounts and wallets in order to import all transactions throughout the tax period.
Coinledger will automatically categorize cryptocurrency transactions while also allowing users to adjust manually in line with the appropriate tax treatment. From there, CoinLedger uses its robust set of historical data to calculate the cost basis and resulting liabilities, if any.
One of CoinLedger's most desirable features is its support for tax-loss harvesting. This process looks for opportunities across your portfolio throughout the tax period to recognize losses. These, in turn, allow for the overall reported profits to be offset — reducing the customer's capital gains and, therefore, their tax burden.
Pricing for CoinLedger is another appealing factor; the lowest tier starts at just $49 for those investors with 100 or fewer transactions, scaling up to $299 for unlimited transactions.
It also provides support for many different countries and the nuances of their tax rules while being especially well suited to the US with a specific report for the document — IRS Form 8949.
This form is required to be submitted to record capital gains. In addition, it also integrates with TurboTax, making it a fantastic way for business owners to be able to aggregate a complete view of tax liability as part of the wider process across many taxable categories.
With over 300,000 users, CoinLedger has proven to be a user-friendly, popular and effective platform — it integrates with over 100 different wallets and exchanges, meaning that importing all of your activity is very easy to do and requires very little manual adjustment.
TokenTax has a unique position in the cryptocurrency tax software market, being not just a software provider but also a full-service cryptocurrency tax accounting firm, too.
Its platform provides users with the ability to run a number of reports, such as reviewing the tax exposure of the imported crypto transactions based on different cost-basis methodologies.
TokenTax also provides custom enterprise reporting, meaning that for especially high-volume users representing enterprise customers, it is able to work to meet more complex requirements.
This software provides a dashboard view for tax loss harvesting to illustrate the amount of tax liability that be offset by claimed losses and reporting for mining and staking alongside views of Ethereum gas usage for cost assessment.
As the TokenTax team has such a deep understanding of the tax requirements given their professional accounting status, they are well-positioned to offer users a wide range of tax form templates to meet their local requirements. They also offer TurboTax integration and a complete filing add-on to enable end-to-end filing automatically through the platform.
Being able to leverage its team of cryptocurrency tax professionals means that it has a particularly good reputation for excellent customer service, with the business owner especially well-equipped to deal with the most complex and high-volume trading accounts.
It explicitly offers these consultative advanced reconciliation services from crypto-savvy tax professionals, which are extremely effective for enterprise use cases.
Given the expertise of TokenTax, their pricing starts higher than much of the market at $65, and this tier only supports Coinbase usage, up to 500 transactions.
The Premium and Pro tiers support 5,000 transactions for $199 and 20,000 transactions for $799, respectively, but for the really big fish, the VIP tier — a step below the custom enterprise pricing — comes in at $3,499 per tax year and includes advanced reconciliation and multiple consults with a tax expert from the team.
ZenLedger was founded back in 2017 and now prides itself on the breadth of its integrations for accurate data importing for users. The integrations span more than 50 different blockchains as well as nearly 100 different exchanges.
But the real stand out on the integration side is the ability to support more than 100 DeFi protocols, making ZenLedger a very popular choice for users focused on staking within the DeFi space.
Another key offering of this software is the proactive approach it takes to ensure users' varied integrations are supported. If a customer has transactions in an exchange that is not directly supported yet via an API, ZenLedger encourages the users to contact the team in order to be given direct support on how to manage the import process for that platform.
Pricing also represents a differentiator for ZenLedger versus many of its competitors, with its free tier allowing customers to generate tax reports for up to 25 crypto transactions — unlike many in the space.
At the top level, its platinum tier provides tax reporting support for an unlimited amount of transactions, and in addition to the standard tiers, it also offers tax consultant appointments for $295 in order to assist customers with specialist help.
Boasting over 50,000 customers, ZenLedger also provides TurboTax integration, tax loss harvesting reports, and a feature they claim is unique to them — Grand Unified Accounting to show all transactions in a single place.
Koinly is certainly one of the platforms that offer the most features, boasting more than 300 different integrations with exchange and wallet APIs. This diverse set of data import links means that users are unlikely to have to import much if any, data manually using Koinly's CSV upload feature.
One of Koinly's most impressive benefits is the use of artificial intelligence to automatically match transfers between wallets, meaning that calculating the cost basis is more accurate due to the ability to ensure that a transfer does not accidentally get flagged as a disposal for tax purposes.
Koinly has also looked to broaden its offering to encourage users to maintain their data import links even when not preparing their taxes — so that everything is all set up when tax season comes around. This is in the form of its portfolio features, which allows users to monitor their investments and ROI over time.
Arguably though, the biggest draw on this particular software is how tailored its reporting is for different jurisdictions and the related tax requirements.
As Koinly has developed support for a number of different cost-basis calculation methods — the main difference in calculating tax liability between different countries — it claims to support more than 100 different countries' tax reporting requirements.
In addition, it integrates directly with TurboTax and TaxAct, while providing template reporting for a number of country-specific reporting requirements, including Form 8949 for the US, the Schedule D submission in the UK, as well as reports specific to Canada and Australia.
The tax report features are priced starting at $49 per tax year for 100 transactions, with those requiring more than 10,000 transactions included needing Koinly's 'pro' tier, which starts at $279. The portfolio management features are available free to track up to 10,000 transactions.
Taxbit has positioned itself as a credential-heavy enterprise solution, coming with the expertise to be able to handle even the most complex crypto tax accounting situations. Demonstrating this is Taxbit's security credentials, being accredited as SOC1, SOC2, and ISO 27001 certified.
Taxbit is a selected alliance partner of Deloitte, boasting ERP integrations and being GAAP & IFRS compliant.
The software platform supports a strong level of data ingestion, with automated data feeds and normalization across more than 500 different sources, including exchanges and third-party wallets.
The free tier offering from the software provides free tax forms for all supported Taxbit Network companies and targets digital asset brokers but also covers a wide range of individual activity, with many of the major exchanges belonging to the network.
The Plus and Pro plans start at $50 per tax year and offer a complete level of service for individual investors, including its DeFi and NFT Tax Engine, which currently supports Ethereum trades.
One impressive unique selling point of Taxbit is functionality as part of its Plus and Pro plans to see the tax liability of a potential trade before you make it, meaning that reporting-conscious investors can get a very clear view of what the tax exposure is of a trade in advance.
As an enterprise-targeted software platform, this software clearly takes compliance seriously and even works with some of the biggest regulatory agencies in the world, providing examination support, data analysis, and tax calculations — further reflecting Taxbit's credentials.
Find The Best Cryptocurrency Tax Software For Small Businesses Today
You can use these recommendations for the top cryptocurrency tax software for small businesses which can be a great asset for any small business owner. Taking the pain and hassle out of filing taxes, it helps streamline processes, keep track of accounts, save you time and money, and provide the assurance that you're filing your taxes accurately.
With the number of companies offering impressive features that are tailored specifically to small businesses, it’s never been easier to get started investing in cryptocurrency or managing your finances with ease.