Unlocking the Secrets to Choosing the Right Crypto Tax Software for 2025

If you engaged with cryptocurrency during 2024, having a crypto tax software is essential for calculating your gains and losses this tax season.

Cryptocurrency exchanges differ significantly from traditional stock brokers like Fidelity or JPMorgan. Unlike these brokers, crypto exchanges such as Coinbase and Gemini are not obligated to issue consolidated Form 1099-B for the 2024 tax year. This means you must accurately calculate your gains and losses for your tax return.

How Does Crypto Tax Software Work?

Crypto tax software aggregates transactional data from your wallets and exchanges, reconciles activity, and computes gains and losses by applying the correct tax rules. These tools typically charge an annual subscription for their services. Once your transactions are reconciled, they help generate necessary tax forms like Form 8949, Schedule D, and Schedule 1, which you can file using your general tax filing software.

While many platforms appear to offer solutions, not all are created equal. Here are some key factors to consider when selecting the right crypto tax software for the 2025 tax season:

Integrations Quality

The first thing to evaluate is the number of integrations offered by the software. Look for platforms that support API imports, which provide a seamless and accurate way to import your wallet and exchange data. This process is simple: copy the API key from your exchange and paste it into the software. CSV imports, while an option, can be tedious and prone to errors.

Volume Handling

Consider the platform's ability to handle high transaction volumes. If you're dealing with hundreds of thousands or millions of transactions, ensure the software can manage this without crashing.

Features & Accuracy

Examine the user interface for features like manual transaction editing and the ability to label transactions correctly. Good software should automatically mark non-taxable crypto transfers between your wallets. Starting January 1, 2025, the IRS requires tracking cost basis using the Per-wallet accounting method, so confirm that the software supports this.

Credibility & Legitimacy

Given that crypto tax software is an emerging field, verifying the credibility and legitimacy of the software is crucial. Investigate the team’s background in tax compliance and their initiatives with regulatory bodies like the IRS.

Pricing

Most platforms offer pricing tiers based on the number of transactions. Make sure the pricing fits your budget, and look for platforms that offer free accounts for fewer transactions.

Other Perks

Look for additional perks included with the subscription, such as educational webinars, tax planning tools, and customized support services.

Calculating your crypto gains and losses accurately is your responsibility. Leverage a reputable crypto tax software by assessing the criteria mentioned above to meet your filing requirements.

Disclaimer: This post is informational only and is not intended as tax advice. For tax advice, please consult a tax professional.