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CoinTracker: The Good and the Bad

Like night follows day, taxation follows profit, and in that regard, the crypto industry is no different from any other investment. Many countries classify cryptocurrency as property, meaning any gains from selling or using it are subject to capital gains taxes. Crypto is notoriously volatile and the complex nature of the asset class can make calculating your taxes come filing time complex if you don’t keep accurate records of your transactions.

CoinTracker is one of a number of tax platforms offering tax solutions tailored to crypto investors. Like all its competitors, the platform is connectable to crypto exchanges and wallets, allowing users to import their data, such as transaction history, calculate their capital gains and losses.

Compared to working out your taxes independently, signing up for one of these platforms will save you significant time and effort come tax time.

But which platform should you choose? In this comprehensive review, we’ll have a close look at CoinTracker’s features, its pricing structure, and see how user-friendly it is. We’ll also put its functionalities under the microscope, allowing you to decide if it’s the right platform for you.

What Are CoinTracker’s Features? 

Since its launch in 2017, CoinTracker has signed over 2 million crypto investors to its platform. Adding further credence to its capabilities, CoinTracker is the official crypto tax partner of industry leaders like Coinbase, Uniswap, OpenSea, TurboTax, and H&R Block. So let’s dive into the features that have helped it gain traction in a competitive market.

Supported integrations 

CoinTracker supports over 500 exchanges, wallets, blockchains, and popular platforms like Coinbase and Binance. It also caters to NFT (non-fungible token) collectors.

DeFi often involves numerous transactions, like swapping tokens, providing liquidity, or earning rewards through staking. These transactions all need to be tracked and reported for tax purposes. CoinTracker supports over 20,000 DeFi smart contracts, allowing users to connect their DeFi wallets and automatically import transactions

CoinTracker offers two primary methods for importing your crypto transaction data:

1.    API Integration: This is the preferred and most convenient method. CoinTracker connects directly with over 500 exchanges and wallets through secure API connections. Once authorized, CoinTracker automatically imports your transaction history, saving you the hassle of manual entry.

2.    CSV Import: If your preferred exchange or wallet doesn’t support API integration, you can still import your data through a CSV (comma-separated values) file. CoinTracker provides instructions and templates to ensure your CSV file is formatted correctly for a smooth import. Here’s a breakdown of the steps involved:

Export your transaction history: Most exchanges and wallets allow you to download your transaction history in a CSV format.

Format the CSV file (optional): CoinTracker may require some adjustments to your CSV file depending on the format your exchange or wallet uses.

Upload the CSV file to CoinTracker: Once formatted correctly, you can upload the file to CoinTracker for import.

Excludes spam from your transaction limit  

Not all crypto activity is liable for taxation, and CoinTracker allows you to mark a transaction as “spam,” excluding it from your plan’s transaction limit. This feature is particularly useful for airdrops, test tokens, and other non-financial events that can inflate transaction counts.

We deliberately entered a test token, which CoinTracker detected and marked “spam”. Once marked as spam, the transaction gets moved to a dedicated “Spam” tab within CoinTracker. This keeps your main transaction list clean and accurate.

When you mark a specific asset (like a spam token) as spam, CoinTracker goes a step further. It automatically flags that asset as spam across all your connected wallets and exchanges. This ensures all occurrences of that spam token are excluded from your calculations, saving you time and frustration. On the other hand, if you decide a flagged asset is not actually spam, simply removing the spam tag will clear it from all related transactions.

But don’t forget to occasionally review your “Spam” tab in CoinTracker. While the spam filter is a great tool, it’s possible for legitimate transactions to get caught. Taking a moment to confirm everything in Spam is truly irrelevant ensures your tax calculations and summaries are accurate.

Work with a tax professional

CoinTracker offers a feature that allows you to collaborate with a tax professional, either your own or through the platform’s network of vetted accountants. This functionality is available on all plan tiers, including the free version. The feature allows your chosen accountant to view and edit your transactions within the platform, streamlining the tax preparation process. We believe this feature would be helpful for users with complex crypto holdings or those seeking additional crypto tax guidance.

Dedicated Android or iOs app  

 

CoinTracker’s app lets you conveniently track your portfolio, view transaction history, and access tax reports directly from your smartphone. We downloaded and tested the app – while it offers a user-friendly experience, some manual updates might be necessary to ensure you have the latest information.

What Is CoinTracker’s Pricing? 

CoinTracker offers a tiered pricing structure with one free plan and six paid plans. The price increases the more transactions you need.

The free tier gives you access to basic functionalities like tax summaries, portfolio value tracking, and self-serve support but does not allow you to generate tax reports, similar to the free tiers on some other platforms.

Paid plans start with the Base plan (up to 100 transactions) for USD 59 and progress through Base Plus (up to 250 transactions) at  USD 99, Prime (up to 1,000 transactions) for USD 199, and Prime Plus (up to 2,500 transactions) at USD 299. For high-volume traders, the Ultra plan (up to 10,000 transactions) costs USD 599, and the Ultra Plus (up to 250,000 transactions) reaches USD 1,999.

A noteworthy benefit across all tiers is access to tax reports for all tax years, eliminating the need for yearly add-ons. Additionally, all plans include portfolio tracking and automated spam detection, negating the need for separate subscriptions for these features.

We think that CoinTracker’s pricing structure is somewhat confusing. While it caters to users with varying transaction volumes, it might require some upfront calculation to determine the most suitable plan.

CoinTracker’s Ease of Use and Functionality 

We found the CoinTracker platform user-friendly and believe it would streamline our crypto tax management. One area where it excels is tackling the ever-present issue of spam transactions. Phony airdrops and other irrelevant activity can clutter your transaction history, and moving them to a dedicated “Spam” tab kept them away from our taxable transactions. Even better, marking a single asset as spam flagged it across all our connected wallets and exchanges, automatically excluding it from our transaction count. Looking ahead, CoinTracker is actively developing features to automatically identify and filter out spam entirely, further simplifying the process.

However, the platform has some limitations. Tax-loss harvesting, a valuable strategy for offsetting capital gains taxes, is only available on the Prime plan and above. Additionally, if your favorite exchange doesn’t support API integration, you may have to manually input data using spreadsheets, which can be time-consuming.

Conclusion

After evaluating CoinTracker, we found it to be a user-friendly platform brimming with features that could simplify our crypto tax management. Its extensive integration capabilities, including those for DeFi enthusiasts and NFT collectors, make it a suitable platform for most investors.

We were impressed with CoinTracker’s automated spam filtering and transaction classification and thought they’d benefit users frustrated by irrelevant airdrops and token clutter. The ability to collaborate on the platform with a tax professional further enhances its functionality.

However, the pricing structure tethered to transaction history might necessitate some upfront planning to identify the most cost-effective tier. Additionally, users who prioritize tax-loss harvesting or lack API integration for their preferred exchange may encounter limitations.

We believe CoinTracker is an excellent crypto tax solution for investors and would be happy to recommend it to many of our fellow enthusiasts.

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