Our Take On CoinLedger
THE BOTTOM LINE:
CoinLedger is relatively easy to use. It’s cost-efficient and allows you to compute your crypto taxes seamlessly. However, classifying transaction data can become messy and it’s ironic that a crypto tax platform doesn’t accept cryptocurrency payments from customers.
Cryptocurrency isn’t fiat, but many governments consider it as an asset subject to taxes. Crypto users often find it challenging to calculate the taxes they’re meant to pay, which is why many companies have developed software to help, such as CoinLedger.
CoinLedger can import your crypto transactions from an exchange like Coinbase or a wallet like MetaMask. It then automatically classifies your transactions into their appropriate tax treatment. Afterward, you can download the reports to provide your CPA, or export them to your preferred tax filing software.
This platform sets itself apart from the competition by providing tools for tax professionals to view and edit tax reports on their client’s behalf.
|Coinbase, Crypto.com, FTX, OpenSea, 400+ more
|Yes, all tiers
|Yes, OpenSea or via wallet scan
|Tax Loss Harvesting
|Yes, all tiers
|TurboTax, TaxACT, TaxSlayer, H&R Block
|Bitcoin, Ethereum, Litecoin, Polygon, and Binance Smart Chain
What Is CoinLedger?
CoinLedger was founded in 2018 under a different name, CryptoTrader.Tax. Its three co-founders previously worked on automated trading systems to take advantage of price arbitrage on various crypto exchanges. They built CoinLedger after finding it difficult to find tools to help them automate their crypto tax reporting.
The platform has integrations with various crypto exchanges that enable users to import their transaction history directly. Otherwise, they can upload their transactions as a CSV file or input them manually. Afterward, users can generate detailed tax reports using the uploaded information and export data to their preferred tax filing software.
In its early days, CoinLedger had integration with just one tax filing software; TurboTax. Now, it has added integrations with TaxACT, TaxSlayer, and H&R Block.
You can use CoinLedger to keep track of your crypto portfolio with consolidated single view of all your holdings (across various exchanges and wallets) on one screen. The platform also provides a directory of certified crypto tax accountants that users can hire.
How Does CoinLedger Work?
Let’s say you’re a crypto user that transacts through multiple exchanges and wallets. When it’s time to report your transactions to tax agencies, it can be challenging combing through multiple platforms and inputting the data manually on your tax forms.
But, with CoinLedger, you can import your transactions directly from multiple crypto exchanges and automatically generate the required tax forms.
CoinLedger has integrations with almost every mainstream crypto exchange and wallet. Still, if it’s not integrated with the one you use, you can download your transactions as a CSV file and upload it to CoinLedger to generate the required forms. Otherwise, you can input the transaction data manually, and it’ll also generate the forms automatically.
After generating your tax forms, you can send them directly to TurboTax, TaxACT, TaxSlayer, or H&R Block and submit them to the appropriate authorities.
If you file your taxes through an alternative platform or use a CPA, you can download the forms to use them anywhere.
CoinLedger New 2022 Features
In July 2022, CoinLedger added integration with Polygon, a decentralized blockchain platform that runs alongside the Ethereum network.
Because of the integration, users that interact with the Polygon network through decentralized applications (DApps) and wallets can import their transaction history to CoinLedger.
With their transaction history available, they can automatically generate tax forms to report their capital gains, losses, and income.
You just need your public Polygon wallet address to import your transactions at the click of a button. This feature eliminates a lot of tax reporting headaches for the millions of people that transact via this particular blockchain.
Can You Try CoinLedger For Free?
Yes, you can sign up on CoinLedger for free and import your transaction history, view your capital gains and losses, and track your crypto portfolio. You can also preview your tax forms with a free account, but you’ll need to select and pay for a plan to download any reports.
CoinLedger Pricing and Plans
|FIFO, LIFO, HIFO, tax loss harvesting, portfolio tracking, long- and short-term gains
|Live chat support and email
|Live chat support and email
|Live chat support and email
|Live chat support and email
The four pricing tiers only differ in their transaction limits; otherwise, they offer the same features.
The Hobbyist tier costs $49 annually and allows you to import or manually upload/input a maximum of 100 transactions. This limit is quite low, making this plan suitable for crypto users that only transact with it rarely.
The Day Trader tier costs $99 per year and has a limit of 1,500 transactions. As the name suggests, it’s suitable for people who transact with crypto habitually but not in high volumes.
Costing $159 annually, the High Volume tier supports up to 5,000 transactions. It’s ideal for users who transact in considerable volumes, e.g., freelancers who receive and send payments via cryptocurrency.
The Unlimited tier costs $299 per year and has no limit on the number of transactions you can import or manually input. This package is best suited for day or full-time traders with numerous transactions that add up to immense figures.
CoinLedger has integrations with many centralized and decentralized exchanges, wallets, and tax software. These integrations are powered by application programming interfaces (APIs), which lets software tools communicate directly with each other.
It’s what allows CoinLedger to import your transactions directly from an exchange or wallet instead of you manually inputting them.
The APIs also enable you to transfer your tax forms directly from CoinLedger to the tax filing software through which you’ll submit them to the government.
CoinLedger is integrated with four tax filing softwares; TurboTax, TaxACT, TaxSlayer, and H&R Block. The integration enables you to exchange information between any of these platforms and CoinLedger seamlessly.
First, select the crypto exchanges and wallets you use and import your transaction history. CoinLedger will use the transaction data to generate crypto tax reports for you. You can then upload the reports to a platform like TurboTax or TaxACT.
CoinLedger automatically matches the data on your tax reports to the format of the tax filing software. For example, you can download the file that reports all your crypto gains and losses (calculated by CoinLedger) and upload it to TaxACT.
Because the formats are matched, TaxACT will automatically extract the important bits into its data columns. It’s a similar, seamless process for TurboTax, TaxSlayer, and H&R Block.
Thanks to the integration, you don’t need to stress yourself calculating your tax liabilities and inputting them manually on your tax filing software.
These exchanges have hundreds of millions of users globally, and a significant percentage of them might want to use crypto tax software like CoinLedger.
Most exchanges provide APIs to let other apps interact with them. CoinLedger connects to these APIs to import users’ transaction data and compute their tax liabilities.
From your CoinLedger dashboard, you can select the exchange you trade on and provide a valid API key and API secret . With these credentials, CoinLedger can fetch all your transaction data directly and save you a lot of time that you otherwise would have spent inputting it manually.
If you happen to be using a little-known exchange that CoinLedger doesn’t integrate with, don’t fret. Most exchanges allow you to download your transactions in a CSV file format. You can then upload the CSV file to CoinLedger, and it’ll extract the transaction data automatically.
CoinLedger can’t import transaction data from these wallets using APIs as it does with crypto exchanges such as Binance. Instead, you’ll have to download your transaction history from the wallet in a CSV format and then upload to CoinLedger.
Afterward, the platform automatically generates your gains, losses, and income tax reports based on the transaction data.
You can also use your public wallet address to import data. All transactions are transparent on a decentralized blockchain, so you don’t need to jump through any hoops to fetch them. Provide the public address and CoinLedger will grab the data effortlessly.
Non-fungible tokens (NFTs) are cryptographic records on a blockchain that other people can’t duplicate. The record could be anything digital, but it’s mostly used for art.
People mint, trade, buy, and sell NFTs, which makes them taxable assets. If you want to import your NFT transaction data into CoinLedger, there are two ways to go; API or wallet address.
CoinLedger has an API integration with only one NFT marketplace; OpenSea. If you’re an OpenSea user, you can connect your account and automatically import your transaction data into CoinLedger as you’d do with an exchange.
Otherwise, you can provide your wallet address (on supported blockchains) and CoinLedger will import your NFT transactions in one click.
From your NFT trading history, this software will calculate your short & long-term gains or losses considering the difference between how much you paid to mint or buy an NFT and how much you sold it for.
Decentralized finance “DeFi” exchanges are peer-to-peer marketplaces where users trade directly between themselves without a third-party intermediary or custodian.
DeFi exchanges have captured a significant market share in the crypto sector, and some users would need a platform like CoinLedger to help them sort out taxes.
Some DeFi exchanges (Uniswap, dYdX, SushiSwap, etc.) provide APIs to enable other apps to fetch data from them. Hence, you can generate an API key to give CoinLedger “read-only” access to your transaction data and import it.
If your DeFi exchange doesn’t have API integration with CoinLedger, you can use a CSV file or your public wallet address to collect the transaction data.
How To Upload Transaction Data With A CSV File
- Go to your DeFi exchange.
- Look for the button that lets you download your transaction history.
- Download your transaction history within a specified period in a CSV file format.
- Upload the CSV file to CoinLedger.
How To Upload Transaction Data From A Wallet Address
- Retrieve your public wallet address from the DeFi exchange.
- On your CoinLedger dashboard, click Add account and select the blockchain your DeFi exchange is built on.
- Provide the wallet address, and CoinLedger will automatically import the transaction data.
CoinLedger supports DeFi exchanges built on one of these blockchains; Ethereum, Bitcoin, Litecoin, Polygon, or the Binance Smart Chain.
CoinLedger Crypto Tax Services
As we’ve mentioned, CoinLedger’s primary function is to help users compute the tax liabilities from their crypto transactions. You feed your data into the platform using APIs, a CSV file, wallet scan, or manual input.
It’ll automatically calculate the taxes for you, and you can do a manual review to make sure it’s correct. If it’s not, you’re free to make changes to your tax reports.
Once you’ve generated your tax reports, you can export them to your preferred tax filing platform or share them with a tax accountant for further review.
CoinLedger has integrations with TurboTax, TaxACT, TaxSlayer, and H&R Block. If you use any of these platforms, you can automatically extract the data from your CoinLedger tax reports.
If you want to share tax reports with your accountant, you can invite them through email and grant them permission to view and download your reports– they’ll have to create a CoinLedger Tax Pro account.
Inversely, if they already have the Tax Pro account, they can invite you to join CoinLedger and access your reports. Creating a Tax Pro account is completely free.
If you run into problems with CoinLedger and need assistance, there’s a direct link on your dashboard to the Help Center, which includes a button to start a live chat session with CoinLedger’s support team.
Alternatively, you can send a message to the platform’s dedicated support mail (help@CoinLedger.io).
Portfolio tracking entails keeping a score on the total value of your crypto assets across different wallets, exchanges, and blockchains. The good thing is that CoinLedger is an effective portfolio tracking tool.
With CoinLedger, there’s no need to manually input your crypto transactions across different exchanges to monitor your portfolio. The API integrations it uses to import data automatically from crypto exchanges will suffice.
Just provide a valid API key and API secret, and CoinLedger can fetch all your transactions from multiple exchanges to give you an overview in a single dashboard. A similar process applies to public wallet addresses.
CoinLedger can classify your transactions to avoid confusion come tax time. For example, it can distinguish between a staking reward deposited to your wallet (taxable income) and a self-wallet transfer (non-taxable transaction).
It can also automatically compute the cost basis of crypto transactions, which is essential when determining capital gains or losses.
This platform classifies transactions based on the data it gets from exchanges and blockchains. However, sometimes this feature can get messy and you may need to manually classify specific deposits or withdrawals.
Tax Loss Harvesting
Tax loss harvesting is a deliberate act of selling some investments at a loss to offset gains you’ve realized from other investments. American taxpayers can offset up to $3,000 per year from regular income, but there’s no limit for offsetting capital gains, which you get from crypto trading.
The key is identifying which transactions provide the opportunities for tax loss harvesting, and this is where CoinLedger helps.
It compares your cost-basis for transactions with the current market price to calculate unrealized losses, which constitute tax loss harvesting opportunities. You can monitor these losses in the tax-loss harvesting tab sorted by how large they are.
With the unrealized losses report at your fingertips, you can easily identify which crypto or NFT investments to sell to offset capital gains.
Afterward, you can sell them at your preferred exchange then import the transactions into CoinLedger and re-run your tax reports. You’ll immediately see how much net gains you successfully reduced.
Using CoinLedger is much easier than manually poring through your transaction history to compute unrealized losses.
Invite Your Tax Professional
Some users hire certified accountants and professionals to help them prepare their tax reports, mainly those with a high volume and complex web of transactions.
If you’re in this category, CoinLedger makes it easy to grant your hired professionals access to your tax reports to make the needed edits.
To do this, the professional will need to create a Tax Pro account, which is free. You can then invite them through email, and they’ll have access to your portfolio and tax reports.
Vice versa, if you’re a tax professional, you can invite your client through email to grant you access to their CoinLedger tax reports. You can do this for multiple clients and access all their reports from a single dashboard.
To help you, CoinLedger flags any transactions with a missing cost basis, so that you’ll input the missing data. Afterward, you can download the completed tax forms at the click of a button.
If you don’t have a tax accountant but need one, CoinLedger provides a directory of certified accountants that are available to hire.
CoinLedger Crypto Tax Reports
There are various types of tax reports for reporting different types of income, e.g., capital gains, and ordinary income. CoinLedger’s core function is to dig into your transaction history, classify the transactions, and report them on their respective tax forms.
Without CoinLedger or a similar platform, you’d have to do that manually, which can take a lot of time and effort.
Below is a list of the tax reports CoinLedger generates and what you need them for.
- Audit Trail Report: A complete report of all your crypto transactions for verification purposes. The IRS or an equivalent local agency might request it to confirm your tax declarations.
- IRS Form 8949: A tax form for American citizens and residents to report capital gains and losses from investments.
- Short- and Long-Term Gains Report: A report of short-term and long-term capital gains as defined by your tax jurisdiction.
- Cryptocurrency Income Report: A form reporting all your earnings received in cryptocurrency.
- Tax Loss Harvesting: A report listing your crypto assets with the best tax savings chances stemming from unrealized losses.
How Does CoinLedger Compare To Other Crypto Tax Services?
CoinLedger isn’t the only crypto tax software on the market. There are many other platforms that help crypto users compute their tax liabilities and file reports seamlessly.
For instance, TokenTax has integration with only TurboTax, while CoinLedger has integration with multiple tax filing platforms.
TokenTax is also significantly more expensive, costing up to $3,500 per year, making CoinLedger the more ideal tool for everyday users.
CoinTracker is a more affordable solution than CoinLedger but only has support for DeFi exchanges with higher plans. Let’s have an in-depth look at how these platforms fare against each other.
|TurboTax, TaxAct, H&R Block desktop, TaxSlayer
|Both at higher plans
|DeFi at higher plans
CoinLedger Vs. TokenTax
TokenTax is a significantly costlier tool than CoinLedger. Its highest plan goes for $3,499 annually, over 10x more than CoinLedger’s highest plan. Why so? TokenTax’s highest tier includes live consultations with tax experts, while CoinLedger doesn’t. If you need live consultations, you’ll have to pay for that separately and it doesn’t come cheap.
Still, we don’t think TokenTax is the more cost-effective option given it provides similar features to CoinLedger apart from the live consultations. Both platforms allow you to import transactions from multiple exchanges and automatically generate tax reports.
Even so, CoinLedger’s most advanced plan allows you to import an unlimited number of transactions, while TokenTax’s priciest plan caps the transaction limit at 30,000. You must pay an additional $199 for every 20,000 transactions above that limit.
Unlike CoinLedger, TokenTax has its own team of in-house tax experts that you can hire to file your full tax returns. They don’t come cheap, starting from $1,000 annually, but this feature is very helpful for people who trade huge sums and are likely to require external help. CoinLedger users would have to hire accountants from the platform’s directory or elsewhere, and the vetting process can be hectic.
In summary, TokenTax is a better platform for people trading big sums e.g., high-frequency traders, that tend to need outside help to file taxes. Everyday users will be best served by CoinLedger, a more affordable and simpler tool. Learn more with our full TokenTax review.
CoinLedger Vs. CoinTracker
CoinTracker is a more affordable tool than CoinLedger. However, it has limited functionality compared to CoinLedger in several ways. Its most expensive tier costs $199 annually and allows you to import a maximum of 1,000 transactions.
If you want more transactions, you’ll have to pay extra fees that can run up to hundreds of dollars. In contrast, you can import unlimited transactions on CoinLedger for just $299 per year.
Another major limitation is that CoinTracker only has direct integration with DeFi exchanges at higher priced plans.
CoinTracker has integration with three tax filing platforms; TurboTax, TaxACT, and Wolters Kluwer. It’s one of the few crypto tax platforms integrated with Wolters Kluwer, so it’ll be an ideal choice if you use this platform to file your taxes. Learn more with our full CoinTracker review.
Final Thoughts On CoinLedger
CoinLedger is a cost-effective crypto tax platform. For just $299, you can import your transaction history from multiple wallets and exchanges and have it perform the tax calculations for you. It saves you a lot of time and effort that you can put to use elsewhere, perhaps in your crypto trading endeavors.If you transact with cryptocurrency frequently but not in enormous sums, CoinLedger is the perfect tool for you.
Another area where CoinTracker wins is that it has a free tier, unlike CoinLedger which requires you to pay before generating tax forms. This tier allows you to analyze just 25 transactions at most, so it’s a suitable choice for someone with only a couple of transactions in need of a quick tax report.
Frequently Asked Questions
Yes, CoinLedger is a safe tool to use. It requests read-only access to your crypto exchange account or wallet address, meaning it can’t access your funds in any way.
Furthermore, the company says it doesn’t keep users’ transaction data on its database but rather discards them after extracting the relevant bits.
Any data you send to or receive from CoinLedger is encrypted in transit (256-bit encryption) to prevent unauthorized access and theft.