Note: The deadline to file your 2023 tax return was Monday, April 15, 2024.
If you sell or earn cryptocurrency during the year, chances are you’ll need to report the income on your tax return. And while taxes can be overwhelming with or without crypto, good crypto tax software can help ease your burden.
At Forbes Advisor, we’ve examined and tested nine of the top crypto tax software platforms: TurboTax Premium, Koinly, TaxBit, CoinTracker, CoinTracking, ZenLedger, CoinLedger, TokenTax and BearTax (now known as Fyn). We assessed their prices, free filing options, ease of use, currencies supported and customer service quality. Here are our top picks for 2024.
Best Crypto Tax Software Of 2024
Summary: Best Crypto Tax Software
Methodology
We looked at the crypto tax software offered by nine popular software providers: BearTax (now known as Fyn), CoinLedger, CoinTracker, CoinTracking, Koinly, TaxBit, TokenTax, TurboTax Premium and ZenLedger. At the time we published our article, TaxBit offered crypto tax preparation services for consumers, but that service is no longer offered. So we narrowed our list to four finalists whose software provides the best options and functionality.
Members of our research team then analyzed the finalists—and scored each option across the following categories: free filing options, levels of security, customer service options, price and ease of use. The scores were used for our final ranking.
While online tax software can provide an easy way to file your crypto taxes, you may want to consider hiring a CPA if you need additional assistance.
Frequently Asked Questions (FAQs)
What is cryptocurrency?
Cryptocurrency is a decentralized form of money. Unlike the U.S. dollar, no central authority manages the currency. Instead, a public ledger is used to record transactions using what is known as blockchain technology.
While many people think of cryptocurrency as an investment, it also can be used to purchase goods and services. Additionally, some employers compensate their employees with cryptocurrency.
Do I need to pay taxes on cryptocurrency?
It depends.
If you transfer cryptocurrency from a wallet to another account that belongs to you, you’re not required to pay taxes. However, you may need to pay taxes if you sell cryptocurrency at a gain.
Also, similar to wages, if your employer pays you in cryptocurrency, you must pay income taxes on the virtual currency you earn. Your employer will provide you with a Form W-2, “Wage and Tax Statement.”
How do I report cryptocurrency on my tax return?
If you sell cryptocurrency, you must report it on your Form 1040 tax return, using both Form 8949, “Sales and Other Dispositions of Capital Assets” and Schedule D, “Capital Gains and Losses.”
When you earn cryptocurrency, you will need to report it as ordinary income on your tax return.
Whether you receive crypto as wages or self-employment income determines how you should report it. Employees would report cryptocurrency as wages on line 1 of Form 1040, while self-employed persons typically would report it on Schedule C, “Profit or Loss from Business.”