Crypto traders often start buying and selling Crypto casually. They may have a handful of transactions from a single exchange. At this phase, most people can do their crypto taxes by hand.

However, the complexity of crypto taxes grows as you add in token-to-token transactions and trades across multiple exchanges. People with dozens or hundreds of buy-sell transactions may spend hours just looking up the cost basis for their transactions.

Some Crypto Tax Basics

For the sake of the IRS, crypto tokens and NFT are treated as securities (think stocks). Each token has a cost basis which is the token's value (in $USD) at the time of purchase. You realize gains or losses (called capital gains or capital losses) when you sell the token (or NFT).

The gain or loss realized depends on the value of the token at the time you sell it. 

If you received cryptocurrency for work you did (including mining for cryptocurrency), the currency's value is taxed as ordinary income. Additionally, interest earned on cryptocurrency is taxed as ordinary income.

What Is CoinLedger?

Founded in 2018, CoinLedger is designed to make crypto tax calculations easy. It allows users to import transactions from hundreds of crypto exchanges. Then it calculates the capital gains for all the transactions using IRS-acceptable accounting practices.

The company generates Form 8949 for cryptocurrency and offers custom integrations with tax filing platforms like TaxAct and TurboTax.

In 2022, we named CoinLedger the best software for Everyday Traders in our annual rankings of the best crypto tax apps. Be sure to check out this year’s list of the Best Crypto and NFT Tax Software to compare.

CoinLedger - Is It Really Free?

CoinLedger has a free start option for all of its pricing tiers. As a user, you can ensure that the product will work for you before you pay for it. The free pricing also includes report previews. However, users must pay to download or integrate the reports with tax filing software.

What’s New In 2023?

The biggest change for 2023 is a new name. Formerly CryptoTrader.tax, this program now uses the name CoinLedger. For our two satoshis (which is the smallest unit in a single Bitcoin), that’s a nice little improvement.

In 2023, CoinLedger is still an easy-to-use software with API integrations with many crypto exchanges. This year, CoinLedger has created new integrations with blockchains like Solana and Polygon. 

CoinLedger has also expanded the number of exchanges it supports. The complete list of exchanges supported is here. If the exchange supports a trading pair, CoinLedger will calculate its taxes.

In 2022, the IRS announced that NFTs would be considered taxable digital assets like cryptocurrencies. CoinLedger now offers NFT tax software that connects to your wallet, meaning you can track and report NFT transactions without uploading them manually. 

Does CoinLedger Make Tax Filing Easy In 2023?

CoinLedger dramatically simplifies tax filing for active crypto traders. The software supports API integrations from hundreds of exchanges and has clear workarounds for things like mining income, interest income, airdrops, and gifts.

If you have more than a dozen sell-side transactions this year, it makes sense to consider CoinLedger for tax filing. It is an added cost on top of typical tax software, but it will save many headaches, especially if you use multiple exchanges.

CoinLedger Features

No matter which crypto exchange you use, you should be able to connect it and import your trading data.

Once CoinLedger imports your data, it helps to classify transactions as either capital gains or ordinary income transactions.

Then it establishes the Fair Market Value for each relevant transaction, meaning it converts the value of the transaction from cryptocurrency to US Dollars. 

Finally, it transfers the income to forms you can report on your tax software. Here's what else the software offers:

API Integrations

CoinLedger allows users to connect to APIs using an API key in many cases. Where supported, API integrations makes it easy to download your account history with minimal effort. 

API keys are like a secret password just for your crypto account. Once linked, CoinLedger can stay updated with your latest transactions.

Clear Documentation

CoinLedger has dozens of articles that explain exactly how to connect to the exchange API or import files from the exchanges. The site outlines “gotchas,” so users won’t make common errors.

Integrates With Tax Filing Software

CoinLedger allows users to integrate directly with several tax filing platforms, including TurboTax and TaxAct. No need to fill out the information twice. Simply connect the tax software to CoinLedger to save time.

Limited Free Trial

All users can try out CoinLedger for free. Users only pay when they want to download their reports. However, we've found that you quickly escalate to a high tier simply because transaction volume can be surprisingly high if you buy, sell, trade, and use crypto.

For example, if you’re staking three currencies with daily staking rewards payouts, you’re already at about 1,000 transactions per year from that alone. Adding active trading accounts, it’s easy to see how you could wind up with many thousands of transactions per year.

CoinLedger Drawbacks

CoinLedger has only a few drawbacks for crypto traders seeking easy tax solutions.

No Free Tier for Taxes

CoinLedger offers free trials, but all users must pay to receive downloadable tax reports. ZenLedger and CoinTracker offer free reports for filers with fewer than 25 transactions.

Even if you’re not using the tax features, some may find the free crypto portfolio tracking useful as well. If you use CoinLedger for tracking your crypto wallets and exchange accounts, generating tax reports requires just a few clicks, and a payment.

Some Exchanges Have Messy Integrations

CoinLedger provides clear guidance on how users should connect to APIs or import files from the various supported exchanges. However, some require workarounds, such as downloading a .CSV file with your transaction records and then uploading to CoinLedger. The major exchange Crypto.com is among those requiring a .CSV file for crypto taxes.

How Much Does CoinLedger Cost?

You can import your data and track your portfolio with CoinLedger for free. You only have to pay once you're ready to view and download your full tax report. The company also offers a 14-day money-back guarantee. Within that period, you'll be eligible for a full reimbursement if you're unsatisfied with your report.

How Does CoinLedger Compare?

CoinLedger is the original crypto tax software and a leader in user experience. Most traders can dramatically simplify their tax filing thanks to CoinLedger. 

CoinLedger is also priced competitively. TaxBit supports more exchanges than CoinLedger, but both support the major exchanges. Although TaxBit’s software is now free to individual investors, the company cut out many features and supported exchanges so that CoinLedger may be the better option for those needing more support. ZenLedger and CoinTracker both have a free tier with a 25 trade limit but are otherwise similar.

CoinLedger users who only use more popular exchanges like CoinBase, Binance, Gemini, or Robinhood may not need a standalone service like CoinLedger. TurboTax can already integrate directly with some of these exchanges to calculate your owed taxes.