Crypto Taxes 2021

Tax season is upon us and the new federal tax deadline is May 17. It’s an extremely busy time for everyone in the cryptocurrency industry right now but one of the most common questions I am getting right now is how are folks doing their crypto taxes?

With DeFi summer happening last year, many people made quite a bit of money yield farming and thus tax platforms have to be able to ingest ethereum addresses and integrate with these different decentralized finance protocols. First helpful tip is that you should link not only your ethereum addresses but all of your past centralized exchange accounts so that your cost-basis becomes more accurate.

I’ve used three different crypto tax software providers in the past and figured I’d share some quick thoughts on each, in no particular order, in case it’s helpful:

1. TaxBit

• The company just raised a massive $100m fundraising round so they should be well-capitalized
• User interface is a bit more old-school enterprise and the load times are laggy
• The tool itself seems to do a fairly good job on tracking though you’ll probably still need to go through your past transactions and verify cost-basis
• The portfolio view nor tax optimizer were helpful to me
• Great responsive customer service
• Pricing ranges from $50/year to $500/year based on number of transactions

1. CoinTracker

• The company came out of Y Combinator and raised a small $1.5m seed round a few years ago
• User interface is very sleek and silicon-valley, probably the best of the three tools
• The dashboard is quite comprehensive and the portfolio section gives you deeper analytics on your positions, both similar to popular DeFi tools like Zapper and Zerion, standing out from the competition which are mostly just tax tools
• The tax tool was the most inaccurate of the three but customer service was solid
• Tax plans range from $0 to $399/year based on number of transactions and you can subscribed to a portfolio assistant to help you manage your portfolio and do tax loss harvesting for $99/month

1. TokenTax

• The company is bootstrapped and has not raised any funds
• The user interface is probably right in between the other two products and down the fairway
• The tax tool was about on par with TaxBit in terms of accuracy, maybe a tad bit more accurate
• Tax plans range from $65/year to $799/year with the VIP service costing $2,500/year and includes advanced reconciliation

- Paul V