The tax season is here, and the new federal tax deadline is May 17. This is a very busy time for the cryptocurrency industry, but one of the questions I hear most now is, how do people deal with cryptocurrency taxes?
In the summer of last year, there was a boom in DeFi, and many people made a lot of money. Therefore, the tax platform must be able to accept Ethereum addresses and integrate these different DeFi protocols. The first useful tip is that in addition to the Ethereum address, you should also link all accounts in the centralized exchange in the past, so that the cost basis will become more accurate.
I have used the services of three cryptocurrency tax software providers in the past. I want to share some of my thoughts on each service and provide you with some help. The following companies are not listed in a specific order:
The company has just conducted a round of large-scale financing of 100 million US dollars, so the capital should be quite sufficient.
The user interface is more like a traditional enterprise, and the loading time is relatively long.
The tool itself seems to be able to track transactions very well, but you may still need to verify the cost basis through past transactions
The portfolio view and tax optimizer are both helpful to me.
The company can provide good customer service and respond promptly.
Depending on the number of transactions, the annual fee ranges from $50 to $500.
The company’s predecessor was Y Combinator, which received $1.5 million in seed financing a few years ago.
The user interface is very orderly, very Silicon Valley style, and probably the best of the three companies.
The dashboard is very comprehensive, and the portfolio area allows you to conduct a deeper analysis of your positions. The two sections are very similar to mainstream DeFi tools, such as Zapper and Zerion, which stand out from the competition. These are mainly tax tools.
The tax tool is the least accurate of the three companies, but it provides reliable customer service.
Depending on the number of transactions, the tax tool costs from $0 to $399 per year. You can pay to use the Portfolio Assistant to help manage your investment portfolio, and you can implement an investment loss harvest strategy for only $99 a month.
The company developed on its own and did not raise any funds.
In the three companies, the user interface may be at an intermediate level, very straightforward and concise.
Tax tools are comparable to TaxBit in terms of accuracy, and perhaps a bit more accurate than the latter.
Tax tools range from US$65 to US$799 per year, and VIP services cost US$2500 per year, which includes advanced reconciliation services.
Author/ Translator: Jamie Kim
Bio: Jamie Kim is a technology journalist. Raised in Hong Kong and always vocal at heart. She aims to share her expertise with the readers at blockreview.net. Kim is a Bitcoin maximalist who believes with unwavering conviction that Bitcoin is the only cryptocurrency – in fact, currency – worth caring about.