Hey folks, let me once again preface that I am not a financial advisor and this is for entertainment and educational purposes only. In addition, I am in no way shape or form a CPA or a tax professional — this is only a personal account of my experiences using Koinly.
I absolutely hate doing taxes.
For the beginning, the worst thing in the world is trying to figure out your cryptocurrency taxes. If you’re in the US, hopefully you tried to do some tax-loss harvesting as I did before the end of 2022. Now that tax season is upon us, I chose to once again use to do mine, and I was able to do as advertised in “less than 20 minutes”:
(Actually because I have used Koinly last year, it took took me less than 5.)
If you’re a stone cold holder, you most likely don’t need to file for your crypto because this means that you didn’t realize any gains or losses. However if you have done any transactions, according to the
“When you sell virtual currency, you must recognize any capital gain or loss on the sale, subject to any limitations on the deductibility of capital losses.”
Many centralized exchanges such as COINBASE do offer 1099’s which then you could then upload into Tax software such as Turbotax, but if you’ve done a lot of additional DeFi activity, you’ll quickly notice that this will create a very incomplete picture as you may have a ton of open-ended transfers making it appear that your “proceeds” appear far greater than what actually has been realized.
Having tried to simply submit 1099’s before, I quickly realized that submitting 1099’s alone made it seem that I made a LOT more than I actually did. Therefore, I knew that I needed to find something like Koinly in order to help track all my DeFi activity because I certainly wasn’t going to manually go through the 1000’s of of transactions I’ve made over the past year.
There are a ton of different crypto tax software programs out there. Last year being my first year filing for crypto, a good friend of mine recommended me to use Koinly, and now having used it for my second year, I completely understand why. There are several advantages when using Koinly:
It’s good for people who have done a lot of transactions — If you’ve done several hundred trades in the past year, I hope that you’re not figuring out and entering everything manually. Or in other words, I hope that you value your time more for than what you’re giving it, because man…I can’t imagine what a pain in the ass that must be. Koinly helps aggregate all of your data and calculates what you may have gained or lost.
— From other software options I’ve seen, Koinly isn’t super cheap, but then again it isn’t super expensive either. Depending on how many transactions you’ve had over the past year, your specific pricing plan will differ as follows:
Prior to paying anything, I would highly recommend that even if you use another program for your crypto taxes, that you open a free account just to get a good snapshot of your entire crypto portfolio. If you use apps like zapper or debank, then you’ll appreciate that it not only lists all your assets, but Koinly will tell you the gains and losses of your assets as well too.
100’s of app/CEX/DEX integrations — For each wallet, app, and/or exchange, there is a specific method of how to extract and report that data—thankfully, Koinly has an depth instructional video/tutorial of how to do so with each one:
This is something I thought was extremely helpful, because for each wallet/exchange, there may be some totally different way of how to obtain of your asset/transactional data via API keys.
Support for a ton of countries — Over 100 in fact. If you need to look up a specific one, check out an abbreviated list of the most popular ones or else you can e-mail them directly at [email protected] to find out.
There are a ton of different crypto-tax software programs out there now, and it’s important to consider that Koinly may not be the best one for you. For instance, if you’ve done less than 25 transactions over the past year, there’s programs like CoinTracker that will help you get your tax form for free. However for someone like me that’s done almost 1,000 transactions, it was much cheaper to pay $99 for Koinly’s HODLER plan.
If you are keen to use Koinly, please consider supporting this blog and using my referral link: https://koinly.io/?via=9412B5B5&utm_source=affiliate. Additionally, I did some research and it seems as if the promo code ‘ANYCODES’ works and if applied, should give you an additional 30% off.
Have you done your crypto-taxes already? If you did and used a different program besides Koinly, I’d be interested in hearing about your experiences in the comments below.
And as always, thanks for taking the time to read this and be sure to follow me on twitter (https://twitter.com/CryptosWith) to get all my latest updates. Also, looking for a gift for your Crypto-loving/hating friend? Give them a REKT journal to cheer them up!
Disclaimer: And as a final reminder, this is not financial advice and this is for educational and entertainment purposes only. Please as always, do your own research and find what investments are best for you. Cheers everyone!
