For those new to crypto, tokens are digital assets that are stored on a blockchain, a secure, distributed ledger. They can represent currencies, access to a service, or even ownership of a digital good. Regardless of their purpose, you’ll likely have tax obligations if you’ve bought, sold, or traded tokens and made a profit.
Filing taxes on income or traditional investing is confusing enough, but the nature of investing in crypto makes it even more confusing. Crypto transactions can get complicated, and the asset class is famously volatile. Tax laws are constantly evolving, meaning you need to stay up to date with the performance of your portfolio to have a hope of filing your taxes accurately.
If you’re among the many people who’ve dabbled in buying, selling, or trading cryptocurrencies like Bitcoin or Ethereum, you’ve probably realized how difficult keeping accurate tax records is. That’s where tax software, like TokenTax, Coinpanda, or Koinly, comes in.
In this comprehensive review, we’ll focus on TokenTax’s features, pricing, and user experience to help you decide if it simplifies your crypto tax or adds another layer of complexity.
What Are TokenTax’s Features?
Established in 2017, TokenTax has become a popular crypto tax platform. Below, we take a look at TokenTax’s core features.
Supported exchanges and wallets
TokenTax supports over 120 popular crypto exchanges and wallets. The platform allows you to import your transaction history automatically via secure API connections or directly in a supported CSV file format.
Don’t worry if your exchange or wallet isn’t directly integrated with TokenTax. You can still import your transaction history using our manual CSV template. We even offer assistance in editing your CSV file if it’s originally from an exchange. We also found that compared to other competitors, TokenTax has fewer direct native integrations at only 80+, while its competitors like Koinly and CoinTracking have 800+ and 500+, respectively.
Tax report generation
The platform offers location-specific tax reports for the U.S. and generates profit and loss balance sheets for use in any country. For U.S. users, it completes IRS Form 8949.
While TokenTax supports transactions in all major currencies and for users worldwide, those outside the U.S. must complete their tax forms according to local regulations.
Real-time preview of tax liability
If you want to stay up to date with your tax obligations, TokenTax offers real-time tax estimates. TokenTax immediately calculates your capital gains, losses, and overall tax liability as you import your crypto transactions. This feature allows you to adjust your investment strategies throughout the year. However, these snapshots are estimates, and final tax calculations may differ.
Full-service accounting
TokenTax is a full-service accounting firm that offers a comprehensive solution for users with more complex tax situations. In addition to the software’s automated features, you can connect with a team of experienced tax professionals. These accountants can provide personalized guidance, handle intricate tax scenarios like margin trading, and even assist with back tax filing or IRS audit support.
What Is TokenTax’s Pricing?
TokenTax offers a tiered pricing structure to cater to different user needs. The Basic tier, priced at USD 65 per tax year, is suitable for users with up to 100 crypto transactions. For users with a higher volume of transactions, the Premium plan increases the limit to 5,000 transactions for USD 199 per tax year. The Pro plan caters to professional traders with a limit of 20,000 transactions and margin/options support, priced at USD 1,599 per tax year.
For high-volume traders or those with very complex tax situations, TokenTax offers VIP tiers. The VIP plan provides a 30,000 CEX transaction limit and priority customer support for 2,999 USD per tax year. The most comprehensive option, VIP & Full Filing at 3,999 USD per tax year, includes all the VIP plan features and full tax return filing by TokenTax’s in-house CPAs or EAs.
TokenTax’s Ease of Use and Functionality
TokenTax doesn’t have a mobile app, but we found the web app fully responsive and mobile-friendly. The mobile version lets you access most features from your smartphone or tablet’s web browser.
While not a substitute for a dedicated app, it offers some level of flexibility for users on the move.
Ease of use and interface design
TokenTax’s interface is clean and intuitive. The dashboard provides a clear snapshot of your crypto holdings and tax situation. We found importing our data relatively straightforward and thought it would be easy even for users who aren’t particularly tech-savvy. However, some features required a lot of navigation of different menus.
Customer support
Along with helpful articles and FAQs, TokenTax offers live chat across all its price plans. We found the live chat wait times reasonable during our test, and the support staff was knowledgeable and helpful.
Conclusion
In conclusion, TokenTax is a good solution for U.S. users grappling with the complexities of crypto tax filing. With its automatic filling out of IRS 8949 forms, TokenTax streamlines the tax reporting process. The availability of live chat assistance and access to in-house accountants provides invaluable support, ensuring users receive personalized guidance and expert advice throughout the tax filing journey.
However, it’s important to consider TokenTax’s limitations, such as the absence of a mobile app and the lack of a free tier for smaller investors. These drawbacks may impact user experience, particularly for individuals seeking flexibility and accessibility in their tax management tools. Additionally, users outside the U.S. may find TokenTax’s U.S.-centric focus less relevant to their specific needs or regulatory requirements, prompting them to explore alternative solutions tailored to their geographic location.
Overall, TokenTax would be an excellent option for U.S. users seeking a reliable and efficient solution for managing their crypto tax obligations. Its comprehensive features, personalized assistance, and focus on IRS compliance position it as a valuable tool in navigating the complex landscape of crypto taxation.
