Koinly is a popular cryptocurrency tax software. As the world of cryptocurrencies continues to expand, it brings with it a unique set of challenges, including the need for accurate tax reporting. Koinly, a leading crypto tax software, has emerged as a powerful solution for individuals and businesses navigating the complexities of crypto taxation. In this article, we will explore Koinly’s features, benefits, and how it simplifies the process of crypto tax reporting, ensuring compliance and peace of mind.

Understanding Koinly Crypto Taxation

Before delving into Koinly’s functionality, it’s crucial to grasp the basics of crypto taxation. Cryptocurrencies are subject to taxation in many jurisdictions, just like any other form of asset or investment. The complexity arises from factors such as frequent transactions, varying exchange rates, and decentralized nature of cryptocurrencies.

Manual tracking of transactions and calculating tax liabilities can quickly become overwhelming. That’s where Koinly steps in, offering a comprehensive platform that automates the process, saving time and effort.

Koinly Review

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Introducing Koinly

Koinly is a user-friendly cryptocurrency tax software that simplifies the process of tracking, calculating, and reporting crypto taxes. It integrates seamlessly with popular exchanges, wallets, and blockchains, enabling users to effortlessly import their transaction data for accurate tax calculations.

Key Features of Koinly

1. Automated Data Import: Koinly supports over 6,000 cryptocurrencies and connects with more than 300 exchanges, making it easy to import transaction data from multiple sources. It retrieves historical data, including trades, deposits, and withdrawals, automatically.

2. Accurate Tax Calculations: Koinly employs advanced algorithms to calculate tax liabilities, taking into account factors such as capital gains, losses, cost-basis methods (FIFO, LIFO, etc.), and tax regulations specific to your jurisdiction. It ensures precise calculations, minimizing the risk of errors.

3. Real-Time Portfolio Tracking: Koinly provides a comprehensive overview of your crypto holdings, displaying current valuations and historical performance. This feature helps you monitor your investments, understand your portfolio’s performance, and make informed decisions.

4. Tax Optimization: Koinly identifies potential tax-saving opportunities, such as harvesting losses to offset gains or selecting the most advantageous cost-basis method. These insights enable users to optimize their tax positions, potentially reducing their overall tax liabilities.

5. Compliance and Audit Support: Koinly generates detailed tax reports, including Form 8949, Schedule D, and more, ensuring compliance with tax authorities’ requirements. These reports can be easily shared with tax professionals or uploaded directly to tax filing platforms.

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Which Countries Does Koinly Calculate Taxes For?

The majority of countries are supported by Koinly for tax reporting and tracking, including all of the following countries.

The team also claims that a considerably broader range of nations that employ various accounting practises are supported, and these nations include:

• First In First Out (FIFO)
• Last In First Out (LIFO)
• Lowest Cost
• Highest Cost
• Shared Pool
• Average Cost Basis

It is best to get in touch with the team and discuss your special needs if you want to ensure that Koinly supports your nation.

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Koinly Tax Reports

Koinly also creates a variety of localised tax reports for other nations, including:

These regional reports are offered in addition to more traditional reports like:

1. Complete Tax Reports: You can obtain a PDF of this statement, which includes your capital gains summary, margin gains, capital gain transactions, end-of-year balances, asset summary, and income.
2. Capital Gains Reports: This CSV contains a list of all of your disposals.
3. Transaction Reports: This includes all your transactions and can be downloaded as a CSV.
4. Income Report: Any transactions labelled as a Gift, Donation, or Lost are included in this CSV.
5. Gifts, Donations & Lost Asset Reports: Any transactions labelled as a Gift, Donation, or Lost are included in this CSV.
6. Turbotax Reports: Your transactions are included in this CSV file, which may be loaded into the Turbotax tax preparation programme.
7. Expense Reports: All transactions with the cost tag are included in this CSV. Your trading fees, which have already been taken into account in the capital gains report, are not included in this though.
8. End of Year Holdings Reports: This CSV contains your holdings at the end of the tax year.

Benefits of Using Koinly

1. Time Savings: By automating the tax reporting process, Koinly saves considerable time compared to manual calculations. You can spend less time on administrative tasks and focus more on your crypto investments.

2. Accuracy and Compliance: Koinly’s advanced algorithms ensure precise tax calculations and compliance with tax regulations. This reduces the risk of errors and potential penalties.

3. Portfolio Insights: Koinly provides valuable insights into your crypto portfolio’s performance, enabling you to make informed investment decisions and track your progress over time.

4. Easy Integration: Koinly seamlessly integrates with various exchanges, wallets, and blockchains, making it convenient to import transaction data from different sources.

5. Dedicated Support: Koinly offers reliable customer support to address any queries or issues promptly. Their team is available to assist users throughout the tax reporting process.

How to Get Started With Koinly

The main website features a “Sign up” button at the top right of the page, making registration rather simple.

• You can register using your Coinbase or Google account, or you can use your email address and password.
• You can also decide whether to only track your portfolio or to set your location for tax tracking.

• You can add your exchange accounts and wallets from here and access the main dashboard.
• From the “Settings” tab, you can modify your account as you see fit to incorporate the accurate tax reporting information for your jurisdiction.

Koinly Pricing

The site offers a variety of programmes made to accommodate cryptocurrency traders with varying degrees of activity.

1. Anyone can utilise Koinly’s Free plan, which is also quite flexible and allows them to track their trades and transactions, exchange and wallet accounts, as well as get a capital gains tax preview, to track their transactions and keep track of their money. With the Free account, you can import data from a variety of sources, access FIFO and LIFO tax reports, and communicate with the support staff via email and live chat.
2. You can generate FIFO and LIFO tax reports as well as foreign tax reports, thorough audit reports, Form 8949 and Schedule D reports using the Hodler account, which costs $49 each tax year. Additionally, you can export to TaxACT and TurboTax, however you are only allowed to export 100 transactions.
3. The Trader account raises your transaction limit to 1000 and gives you access to a similar variety of options for $99 every tax year. You can also get priority help if you agree to this plan.
4. For 3000 transactions, the Oracle account costs $179 every tax year, and for 10,000 transactions, it costs $279. Access to all of Koinly’s capabilities is available with the Oracle plan. This entails having access to priority support and having the option to create unique reports. This plan also receives additional support from the support staff, who will execute large operations and handle customised files without charging a fee.

All plans presently include tax records for the previous five years of your cryptocurrency activities, and the site gives users access to a wide variety of functions.

Koinly Exchange, Service Support and Wallet

You may monitor your activity on more than 6,000 different blockchains, 350 exchanges, and 75 wallets with Koinly, which connects with a wide range of well-known cryptocurrency services.

Because of this, the vast majority of top cryptocurrency service providers are supported, and Koinly also incorporates with cryptocurrency lenders like Nexo, BlockFi, and Compound.

By connecting your Blockfolio, Delta, and CoinTracking accounts, you may utilise the platform to keep track of your investments.

In addition, Koinly supports over 6000 cryptocurrencies via manual entry and CSV import for 14 blockchains, including Bitcoin, Ethereum, Litecoin, NEO, and EOS.

Is Koinly a good choice for new users?

The site is primarily intended for users who are already actively involved in a range of cryptocurrency-related activities, including as lending, mining, trading, and investing. Koinly might not be intended for those who are just beginning their cryptocurrency adventure as a result.

The tool, however, is helpful for cryptocurrency fans of all levels of experience and enables anyone entering the market right now to keep track of their activity from day one. It’s also important to note that Koinly lets you log your trades and transactions going back five years, which enables more seasoned traders to quickly report their past activities.

The platform has connections to all of the top exchanges, wallet providers, and blockchains, making its reach fairly wide. Additionally, it makes it simple to create a variety of reports, including the entire tax reports that many people are interested in producing, capital gains reports, income/transaction reports, end-of-year reports, and reports on income and transactions.

The resource area aids in user education, and the cryptocurrency tax guides are a useful method to stay current with events in your country. Anyone who is unfamiliar with filing taxes can benefit from the localised tax reports as well as error reconciliation options like auto balance verification and negative balance warnings.

The advantages of the Oracle plan, which offers bespoke reports, live chat assistance, and extensive transaction tracking, may need to be considered by more active crypto aficionados. With the use of these capabilities, a more customised solution that would be suitable for high frequency traders can be offered, while the free plan enables less active hobbyists to effortlessly manage all of their accounts.

How Safe is Koinly?

The team places a high priority on user data protection and customer confidence, and they deploy a multitude of security protocols to prevent any vulnerabilities or breaches.

Most significantly, Koinly does not need access to your exchange accounts’ funds or your private keys. However, it’s always a good idea to block the option to withdraw and trade when creating your API connections since it communicates with your accounts via API.

The website is entirely served over https, and all data transmitted to or from Koinly is likewise secured using 256 bit encryption utilising aes-256-gcm before being transferred or received.

For data hosting and storage, Koinly additionally uses Heroku and Amazon Web Services (AWS). Heroku is a safe cloud application platform that isolates user programmes and data. AWS is a market leader in delivering secure hosting.

The platform implements security controls at every layer, from physical to application, and implements security updates without requiring any involvement from the customer or disrupting service. Due to the advance notification of any scheduled downtime, Koinly is able to maintain an uptime of 99.9%.

With Koinly, users may register and authenticate using Google/Coinbase, eliminating some of the need to keep track of passwords. Those registering by email also have their passwords stored using bcrypt. The team makes cautious to only allow authorised staff access to data and continually scans for vulnerabilities.

In summary, the platform has many industry-standard security protocols, and the company goes into more detail about their security here. As always, the best approach to protect yourself from data breaches is to keep your own personal information secure and to use it wisely.

What Exchanges are Supported?

• Binance
• Coinbase
• Crypto.com
• Gemini
• CoinSpot
• Luxor
• Phemex
• Bittrex

Conclusion

Navigating the complexities of crypto taxation can be challenging, but with Koinly, the process becomes streamlined and hassle-free. By automating data import, accurate tax calculations, and generating comprehensive reports, Koinly simplifies crypto tax reporting while ensuring compliance with tax regulations. With its user-friendly interface and powerful features, Koinly provides individuals and businesses with the tools they need to confidently handle their crypto tax obligations.

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