TokenTax Review: What To Know About Pricing, Plans, & Features

Our Take On TokenTax

THE BOTTOM LINE:

Crypto users often use multiple wallets and exchanges to manage their tokens, and calculating the tax burden for their digital assets can be difficult. TokenTax reduces that difficulty by directly integrating with crypto exchanges to import transaction data and automatically calculating capital gains/losses and corresponding tax liabilities. TokenTax can also analyze your crypto transaction history to update missing or incorrect tax data. Likewise, if you have a complex tax situation, you can hire the company's in-house team of tax professionals to prepare your tax returns. This full-service tax filing feature is what sets TokenTax apart from the competition.

TokenTax Overview

What Is TokenTax?

TokenTax was founded in 2017 as a simple product that imported data directly from Coinbase, a popular crypto exchange, to automatically calculate users'crypto tax liabilities.

The early product won theProduct Hunt Global Hackathon. Over time, it began adding integrations with more exchanges, and in 2019, the company acquiredCrypto CPAs, a crypto tax accounting firm to provide manual tax preparation services for its users.

The TokenTax platform has direct integration with nearly all crypto exchanges, both centralized and decentralized. If you use a fringe exchange with no integration, you can always download your transaction history as a .CSV file and upload it to TokenTax to get the job done.

If you have a complex tax situation with multiple sources of income, you can also hire TokenTax’s full-time certified public accountants to manually prepare your taxes and save you a lot of time.

In summary, TokenTax is a full service online crypto tax accounting firm, not just a simple software.

What Problems Does TokenTax Solve?

One of the major barriers to mainstream adoption of cryptocurrencies is that they’re complex to manage, including calculating tax liabilities. TokenTax is a product that helps users do that by using transaction data imported directly from an exchange.

For example, you may have multiple crypto accounts on different exchanges, making it difficult to track all your transactions and report the correct figures to tax authorities. But, TokenTax can import data directly from all the exchanges and calculate your liabilities, and you’ll just make the final review.

This platform helps you avoid violations that tend to have strict consequences. It also saves you a lot of time that you’ll have otherwise spent poring over your transactions and extracting data. Making crypto taxes straightforward fosters more adoption in the sector, and TokenTax is a platform playing a crucial role in the crypto ecosystem.

TokenTax New 2022 Features

Earlier on, users had to commit to — and pay for — a specific plan before signing up for TokenTax and exploring account features. That situation drove away a lot of potential users who wanted to try the platform before deciding if it was worth paying for. In 2022, users can now create a free account and explore the available features.

Now, you can sign up for free and get a good overview of what the platform offers before committing to a paid plan. But, you still must pay for a plan to import any transaction data and generate your tax forms.

Can You Try TokenTax For Free?

While you can create an account for free and preview the features TokenTax offers, you can’t use any of the features unless you pay for a plan. The platform offers four distinct plans that cost between $65 and $3,499 annually. Having no free trial or demo version is a notable disadvantage of using TokenTax compared to the competition.

TokenTax Pricing And Plans

• The Basic tier has a transaction limit of 500 and integration with only one exchange, Coinbase. Hence, it’s suitable for Coinbase users with comparatively low transaction volume.
• The Premium tier increases the transaction limit to 5,000 and supports virtually all decentralized and centralized crypto exchanges. It also includes complementary features like tax loss harvesting and .CSV transaction imports. TokenTax’s Premium plan is ideal for users who trade cryptocurrencies on multiple exchanges. It’s also the minimal-cost plan for people who use decentralized exchanges or trade non-fungible tokens (NFTs).
• The Pro plan boosts the transaction limit to a considerable 20,000 and includes margin/options, profit and loss statements, and foreign bank account reports. It’s perfect for full-time day traders who transact across multiple global exchanges and partake in complex activities like margin trading.
• The VIP plan costs a steep $3,499 annually, with a transaction limit of 30,000, priority customer support, and 30-minute consultations with TokenTax’s CPAs. It’s the optimal plan for people that move big sums in cryptocurrencies — tens of thousands to millions of dollars or an equivalent in local currencies. Users in this category are more likely to invite tax inquiries and audits that need manual review from TokenTax’s certified accountants.
• There’s also the Enterprise plan, which is on another level. With this plan, TokenTax's team can build custom features for you in addition to its standard features. You'll also have on-demand access to tax experts. There's no standard pricing for this plan– you must contact the company directly for a quote.

If you hit your transaction limit on any plan, don’t fret, as TokenTax lets you add 20,000 more transactions for $199. The platform also gives a 10% discount on the aggregate price if you pay multiple years in one go.

TokenTax Integrations

TokenTax has API integrations with many third-party digital asset platforms, including centralized and decentralized crypto exchanges, wallets, and NFT marketplaces. Thanks to these integrations, you can import your transaction data directly to determine your tax liabilities. This platform is also integrated with a premier tax filing platform to allow users to export their crypto tax forms and submit them to the appropriate agencies.

Tax Software

TurboTax is the tax preparation software that TokenTax integrates with. You can generate tax forms on TokenTax and export them to TurboTax at the click of a button to file with the IRS or a similar local agency. They include:

• Form 8949 (Capital gains and losses)
• Audit Trail Report
• Tax loss harvesting report
• Mining and staking income report
• ETH Gas fee report
• International gain/loss report
• FBAR (Foreign bank and financial accounts)

Exchanges

TokenTax has integrations with virtually any centralized exchange you can name — including popular ones like Coinbase, BitMex, and Circle, and relatively obscure ones like YoBit and Tidex. These integrations enable you to import your transaction history directly from an exchange to calculate your liabilities. You can do this easily and save a lot of time compared to extracting all that data and inputting them manually into your tax software.

You can generate tax forms automatically using the data you import from an exchange. For example, if you've earned crypto from mining, staking, or airdrops, it's taxed as ordinary income instead of capital gains in the U.S. You can import the earnings data into TokenTax and compute the tax you’re meant to pay to the IRS.

These integrations are possible because mainstream crypto exchanges provide APIs to enable third-party developers to fetch data from them.

Wallets

You can also import transactions from a wallet address into TokenTax. This connection is only necessary for taxable events like selling, staking, or crypto mining, but not simply storing crypto assets. From the TokenTax API import page, you can see the list of wallets that the platform is integrated with, including popular ones like MetaMask and Phantom.

From the page, you can choose your preferred wallet and enter your credentials to import transactions. Afterward, you can resync, edit, or deletethe wallet. Resyncing your wallet will import any new transactions that occurred since your last sync/resync. You must do this from time to time because TokenTax doesn't pull data automatically for recent transactions. If you want to change some details of the wallet, the edit button is always there. You can also delete a wallet at any time if there’s no further need to import transactions.

NFT

NFTs are cryptographic records on a blockchain that no one can replicate. The record can be anything digital, but the most popular use is for artwork. Because the record is transferable, people often buy NFTs and sell them for profit, triggering a taxable event. Likewise, minting an NFT will also be a taxable event, as you will have used existing crypto to mint the NFT, which is the same as “selling” that crypto in the eyes of the IRS.

You can connect your NFT wallet to TokenTax and import all trading data. Every transaction is transparent on the blockchain, so you just need a wallet’s public address to connect it. Therefore, it’s easy to compute capital gains or losses on all your NFT transactions and include the appropriate information on your tax forms.

For example, if you mint an NFT on the Ethereum blockchain, it counts as a taxable event because you are trading your ETH for another token (NFT). Likewise, if you sell that NFT, the profit constitutes capital gains, and TokenTax calculates the appropriate tax rate based on income level.

DeFi

Decentralized finance exchanges are peer-to-peer marketplaces where users can trade, lend, or borrow cryptocurrencies amongst each other without the need for a third-party intermediary to hold and transfer the funds. Such marketplaces route trades through smart contracts instead of a centralized trading desk to ensure anonymity.

TokenTax has integration with many DeFi marketplaces, including well-known ones like Aave and Compound, so it can extract data directly from the API import page. If your exchange isn’t supported, you’ll need to use your public wallet address or a .CSV file of your transaction history.

Using your public wallet address is easier because transactions are transparent on the blockchain, and extracting them doesn’t take much effort. On the other hand, you’ll need to download a .CSV file from your DeFi exchange and upload it to TokenTax to extract the data, which requires more effort. Some DeFi exchanges don’t offer .CSV exports at all.

Does TokenTax Make Filing Crypto Taxes Easy?

TokenTax has a simple interface that enables easy navigation. From the bottom of the dashboard, you can use the “Import Data” button to begin transferring your data into your dashboard. Clicking this button takes you to a menu where you can search for integrations with compatible apps. If you don’t see any integration, you have the option to upload a .CSV file or input transactions manually.

Let’s say you want to connect your TokenTax account to TurboTax. Look for the TurboTax integration and click on it, and you can choose to log in directly or provide your account’s API key/secret key to facilitate the connection.

On the dashboard’s top right side, there’s a “Generate Tax Forms” button, which leads you to where you can create tax forms from your crypto transactions and share them with your certified public accountant or export them to an external tax filing platform.

A common tax form TokenTax generates automatically is the IRS Form 8949that’s used to report capital gains and losses from investments. The tax form generator supports the two main asset valuation methods: First-In, First-Out (FIFO), and Last-In, First-Out (LIFO).

TokenTax lets you preview your tax bill in real-time. This allows you to track and preview your tax bill across different periods so that you’re never caught unprepared.

On the dashboard's home page, you can adjust crucial settings like home currency, cost basis method, short-term or long-term tax rate, and more. If you ever need help, the button to contact support is also right there on the homepage.

Tax Loss Harvesting

Tax loss harvesting is a strategy that can reduce the total amount of capital gains taxes you're liable for. It works like this: you sell an investment that's losing you money and use that loss to offset realized gains from other investments. You can offset a maximum of $3,000 per year for ordinary income, but there’s no limit for offsetting capital gains.

TokenTax has a tool that analyzes your crypto or NFT transaction history to calculate the unrealized losses you have on every token and get a good overview of your tax loss harvesting opportunities. This tool makes it easy to spot which assets you can use to offset capital gains and reduce your tax burden. To access this tool, just click the dropdown menu on your tax dashboard and select “Tax Loss Harvesting.” It’s as simple as that.

Mining And Staking Income Report

If you earn crypto from mining activities or from staking on a blockchain, it counts as ordinary income that’s taxable upon receipt. For American users, such income is reported in the Form 1040 Individual Income Tax Return grouped under “other income.”

After importing or uploading your crypto transaction data to TokenTax, the platform automatically extracts the income recognized from mining or staking and generates the appropriate tax form, which you can share with an accountant or export to your preferred tax filing platform.

Thanks to this feature, you don’t need to monitor transactions by yourself and input the mining and staking income manually, eliminating a lot of stress.

ETH Gas Fees Report

ETH gas fee reports represent yet another feature that TokenTax offers to make it easy for users to prepare compliant tax returns on crypto transactions and potentially reduce their tax liabilities. Whenever you transact on the Ethereum blockchain, you pay a fee to the blockchain to compensate miners for the computing power needed to verify transactions. This fee is called the “gas fee.”

In some cases, businesses or self-employed individuals can deduct gas fees as business expenses and offset them against income to reduce their tax burden. When you import your transaction data into TokenTax, it can automatically calculate and generate a report of the gas fees spent on Ethereum transactions. Then, you can use the report to know what’s deductible or not.

Does TokenTax Have A Mobile App?

TokenTax doesn’t have a mobile app, which may be surprising. However, this situation is typical for platforms that have a central focus on importing data from elsewhere. Mobile app developers face a lot of obstacles in importing data, including sourcing, onboarding, and file formatting. For example, developers must create a parser for each file type their app will support. It's easier to handle everything through a website, which is the approach TokenTax has taken.

Is TokenTax Safe?

TokenTax imports transactions using APIs from different crypto wallets and exchanges. These APIs provide read-only data, meaning TokenTax can’t access your private keys and steal your tokens. Likewise, the company protects user information from unauthorized access with solid encryption protocols.

However, we observed one flaw: TokenTax doesn’t require two-factor authentication for user accounts — you only need a username and password to log in. Without two-factor authentication, hackers only need to steal credentials to break into an account whereas, with it, they can be stopped by the need for extra identification.

How Does TokenTax Compare To Other Crypto Tax Services?

TokenTax is one of many crypto tax softwares on the market. It has formidable competitors, including well-known ones like CoinLedger and CoinTracker. Compared to the competition, TokenTax has its advantages and disadvantages.

For example, some platforms let users import unlimited transactions but TokenTax doesn’t. Likewise, TokenTax has integration with a couple tax software — TurboTax and TaxACT — while some competitors have more integrations.

On the contrary, TokenTax has integrations with almost all well-known centralized and decentralized exchanges while some competitors have integrations with only centralized exchanges. Some rivals don’t even support NFTs. Here’s a brief comparison of TokenTax compared to the two prominent alternative crypto tax services.

TokenTax Vs. CoinLedger

CoinLedger is similar to TokenTax in several ways. They’re both American companies and were founded in the same year (2017). But each platform has its pros and cons. CoinLedger supports unlimited transactions if you pay for its highest tier, which at $299 per tax season is considerably cheaper than TokenTax's highest tier of $3,500 annually.

The way CoinLedger charges customers — per tax season instead of annually — is unique and often saves them money in the long run. CoinLedger has integration with multiple tax softwares; TurboTax, TaxAct, H&R Block, and TaxSlayer. On the contrary, TokenTax is integrated with only TurboTax and TaxAct.

Thus, people that use other tax filing software like TaxSlayer and H&R Block will be best served by CoinLedger compared to TokenTax. The lowest CoinLedger plan (of $45 per tax season) has DeFi support, while you’ll need to pay at least $199 per year for the same feature on TokenTax. However, TokenTax also includes NFT support while CoinLedger doesn’t.

On CoinLedger, you can import your crypto transaction data for free and only pay when you need to generate tax forms. But, TokenTax requires payment before importing any data, making it less ideal for crypto newbies.

Overall, we think CoinLedger is the better solution, offering similar features to TokenTax for considerably less money, except for the live consultations.

TokenTax Vs. CoinTracker

CoinTracker’s pricing structure is tricky compared to TokenTax. Its Premium plan costs $199 per year (same as TokenTax) but is limited to just 1,000 transactions, while its rival offers 5,000 transactions at the same price.

For transactions above the 1,000 limit, the price correlates with the number of transactions you want, starting from 3,000 at $299 to 1,000,000 at $2,999. Hence, TokenTax is ultimately the more affordable solution.

Unlike TokenTax, CoinTracker provides a free tier that’s limited to just 25 transactions. Interested users can sign up for this plan and test the features of the software before making their final purchase decision. It's comparable to a free trial, which TokenTax doesn't offer.

If customers aren’t satisfied after paying for CoinTracker, they can request a full refund from the company up to 30 days after. By contrast, TokenTax offers no refunds after purchase.

Furthermore, CoinTracker only has integrations with centralized exchanges, while TokenTax supports both centralized and decentralized exchanges.

TokenTax Support

If you want direct support on TokenTax, there’s a button to contact support right on your dashboard. You can also visit the official help center where TokenTax has provided user guides and solutions to commonly encountered problems.

To make it easier, [email protected] is the platform’s official support email, and(845) 663-1173 is the official support number. There’s also a “Message Us” button on the homepage or help center that opens a live chat module.

VIP customers have priority support on the customer support line. They can also get in touch with TokenTax's team of accountants, with room for two 30-minute consultations.

For instance, you might need a consultation to seek professional opinions on a tax loss harvesting strategy. If you surpass your allocated time limit, you can arrange for more time with TokenTax for an extra fee.

Final Thoughts On TokenTax

TokenTax is a great platform that can help you simplify your taxes if you transact with cryptocurrencies. Its function is straightforward: you can import your transactions directly, generate tax forms from them, and export them directly to TurboTax or download and upload them on an alternative tax filing software.

This platform beats most of the competition by offering live consultations with certified public accountants or full tax filing services from them. However, for this privilege, TokenTax is more costly to use than most competing platforms.

Frequently Asked Questions