The crypto market is an exciting, ever-changing investment landscape, but when tax season rolls around, it can quickly become a headache. The decentralized nature of crypto makes it different from traditional investments, and tax authorities worldwide are still grappling with how to regulate it. This means that your tax liabilities are liable to change at short notice (in keeping with the volatility of the investment itself) and keeping track of your transactions and capital gains and losses is imperative.
Koinly is a platform that simplifies the crypto tax filing process for investors. Like other platforms of its type, you can connect your exchanges and wallets to import your data and then generate reports.
In this comprehensive review, we’ll take a deep dive into Koinly’s features, user experience, and pricing structure to help you decide if it’s the right tool for your taxation needs.
What Are Koinly’s Features?
Like most crypto investors, we find tax season daunting. We’re always on the lookout for platforms that can simplify the tax filing process and generate accurate, compliant reports for our various locations.
Below, we take a look at some of Koinly’s features.
Collaborative improvement
Demonstrating a commitment to user feedback, Koinly maintains a public roadmap. This roadmap offers transparency into the platform’s development process by outlining planned features, recently released updates, and ongoing projects. This allows users to stay informed about upcoming functionalities and gauge potential improvements that may address their needs. Koinly’s focus on user input suggests a dedication to continuous improvement and positions the platform to adapt quickly to the evolving landscape of crypto tax regulations.
Data integration
Koinly can integrate over 750 exchanges, wallets, and blockchain addresses, streamlining your data import. We connected our exchanges and wallets, which include popular platforms like Coinbase, Binance, and MetaMask, using API keys and uploading CSV files.
We also manually entered some transactions via the Koinly interface. During our test, the automatic importations were fast and accurate, and the manual entries took as much time as you’d expect!
Tax report generation
Koinly’s tax report generation supports most cost-basis methods commonly used by tax authorities, including average cost, FIFO, LIFO, and HIFO. This flexibility enables you to select the approach that aligns with your tax strategy, potentially reducing your tax obligations.
The platform generates location-specific, compliant tax reports for over 20 countries, including the U.S., Canada, Australia, the U.K., and many European nations.
DeFi and NFT integration
While the platform has automated exchange and wallet transactions, it’s aware of the growing involvement in the market of DeFi (decentralized finance) and NFT (non-fungible tokens) transactions. Currently, DeFi and NFT integration relies on manual input or uploading CSV files. This means users may need to gather data from DeFi protocols and NFT marketplaces separately. Even though it’s not automatic, Koinly provides a central location to consolidate all your crypto transactions (exchange, wallet, DeFi, NFT) for tax reporting.
Once you’ve entered your DeFi and NFT transactions, Koinly helps you categorize them appropriately (e.g., DeFi swap, NFT purchase). This categorization helps calculate potential tax implications for different types of transactions.
Data discrepancy identification
Occasionally, mistakes happen in any automated data import procedure. To address this, Koinly identifies any discrepancies in your data, such as incorrectly imported or missing transactions that result in your balances going below zero. This allows users to manually correct these discrepancies, helping avoid mistakes in your tax return.
What Is Koinly’s Pricing?
You may explore Koinly’s features completely free, with no credit card needed. This includes viewing up to 10,000 detailed transaction information, getting a sneak peek of your potential tax liabilities (capital gains, losses, and income), and using tools like the NFT dashboard and tax loss harvesting simulator. Essentially, Koinly lets you take it for a test drive before committing to a paid plan. You can see if the platform meets your needs without any upfront cost.
For us, Koinly stood out in terms of its free tier offerings compared to some competitors like TokenTax. While TokenTax requires a paid subscription starting with up to 100 transactions to access any features, Koinly has a generous free tier. We’d never state that a platform is “the best,” as that’s always subjective. However, Koinly’s free tier is somewhat unique and would be suitable for many crypto investors.
After the free tier, Koinly offers a pricing structure that starts at the Newbie for USD 49 per tax year, suitable for users with up to 100 transactions. Next is the Hodler at USD 99 for 1,000 transactions and the Trader at USD 199, accommodating 10,000 transactions or more. The Trader plan also has priority support.
Koinly’s Ease of Use and Functionality
Koinly’s interface is clear and user-friendly, and we found it simple to navigate around all areas of the platform. The platform has a dedicated mobile app, which, while functional, could benefit from further development.
Conclusion
In conclusion, Koinly is an excellent solution for simplifying the complex task of crypto tax filing. With its user-friendly interface and comprehensive features, including collaborative improvement efforts, extensive data integration capabilities, flexible tax report generation, and a focus on emerging trends like DeFi and NFTs, Koinly strives to meet the evolving needs of crypto investors.
The platform’s commitment to transparency and user feedback through its public roadmap indicates a dedication to continuous improvement, which is crucial in navigating the ever-changing regulatory landscape of the crypto market. Additionally, Koinly’s free tier offering, allowing users to explore its features without any upfront cost, sets it apart from competitors and provides a low-risk opportunity for you to evaluate its suitability.
While the pricing structure may pose a barrier for users with high transaction volumes, Koinly’s tiered plans cater to a range of users, from casual investors to active traders, with options for prioritized support for those who require it.
Overall, the free tier or a lower-tier plan might suffice if you’re a casual crypto investor with a straightforward portfolio. However, high-volume traders or those with complex DeFi or NFT involvement may need to weigh the platform’s functionalities against its pricing and limitations in these areas. As with any tax platform, we recommend consulting with a tax professional and not just relying on the information on the platform.
