CryptoTrader.Tax Makes Digital Currency Tax Preparation Fast and Easy While Helping to Maintain Compliance
In a Nutshell: Cryptocurrency transactions are a relatively new form of financial transaction, and many crypto holders are unsure how to handle digital currencies when tax time comes around. CryptoTrader.Tax makes what would otherwise be a time-consuming and complex process quick and easy with its online platform. The company provides a range of pricing tiers for its services, from hobbyist traders to high-volume professional traders. The company prioritizes high-quality customer service and CryptoTrader.Tax users testify to how the platform helps to take the stress out of tax time.
A few years ago, when I began exploring the world of cryptocurrencies — beginning with a few small purchases here and there — the idea of how digital currencies would be taxed never even occurred to me.
It was only after I considered selling a portion of my Bitcoin holdings that I even considered the tax implications. If I sold my cryptocurrency for a gain, did I have to pay taxes? If so, at what rate? As part of a brand new, decentralized financial ecosystem that’s still evolving, were cryptos taxed at all?
I imagine many other crypto investors have encountered these same questions along their journeys.
And the short answer is, yes, cryptocurrency is subject to taxation even though some of the specifics are still playing out.
“Taxable transactions include exchanging cryptocurrency for fiat money, or ‘cashing out;’ paying for goods or services, such as using Bitcoin to buy a cup of coffee; exchanging one cryptocurrency for another cryptocurrency; receiving mined or forked cryptocurrencies,” according to Investopedia.
Non-taxable events include buying crypto with fiat money, donating digital assets to non-profits, gifting crypto to a third party, and transferring crypto between wallets.
That seems fairly straightforward, right? But when it comes to how much you owe, things can get a bit more complicated, according to Investopedia, depending on the value of the crypto, the nature of the purchase, and other factors.
That’s where CryptoTrader.Tax comes in. The platform handles all the heavy lifting for you and lets you take care of your cryptocurrency taxes in minutes.
Co-Founder and CEO of CrytpoTrader.Tax David Kemmerer said he and the company’s other founders, Mitchell Cookson and Lucas Wyland, were actually developing an automated crypto trading platform when they identified the need for a tax solution.
“We ultimately ran into this tax problem, like so many others who don’t realize the tax implications when they’re getting into this, and neither did we,” Kemmerer said. “We were trying to figure out how we were going to report trades for the software we were working on.”
When the team didn’t find any suitable solutions, they decided to switch gears and their own solution.
“By automating the tax reporting process, CryptoTrader.Tax allows cryptocurrency investors to easily stay compliant with tax reporting requirements,” according to the company website.
Kemmerer said tax reporting for cryptocurrencies is similar in some ways to reporting taxes for stock trades, but the reporting infrastructure did not previously exist for crypto tax reporting.
“When you’re going through a traditional stockbroker and using an electronic trading platform, you can just immediately run these reports and give it to your accountant,” he said.
To do this by hand — for cryptocurrencies — crypto holders would essentially have to track down every time they made a trade or triggered a taxable event, he said, and they would have to know the cost basis for the particular asset.
With CryptoTrader.Tax, users can simply import their trades to the platform using the company’s automatic importing tool or upload them as a CSV file. Next, users add their incoming and outgoing crypto transactions over the course of the year.
Finally, users select the tax season for which they are reporting and download the completed report to file for themselves or send to their accountant. Users can also import it into tax software, such as TurboTax.
CryptoTrader.Tax reports include a cryptocurrency income report, short and long term sales reports, IRS Form 8949, an audit trail report, and an end-of-year positions report.
“CryptoTrader.Tax calculates your tax liability from any given year using the same methods that tax professionals use,” according to the company website. “Rest assured that you are paying the correct amount and minimizing your crypto tax liability.”
“Everyone can get started completely for free,” Kemmerer said about the CryptoTrader.Tax platform. “That’s how we build a lot of trust with our users. We don’t want them paying for something that’s not going to work for them.”
In the free version of the platform, users can import their trade history and crypto income. And, once they are satisfied that the information is accurate and the report will meet their needs, they have the option to move into the service’s paid tiers depending on what level of trader they are.
Each paid tier comes with all of the report components listed above, but the price is dependent upon the number of trades the user has.
The Hobbyist level costs $49 per tax season and is for crypto holders who have up to 100 trades. The Pro Trader version is $99 per tax season and covers up to 2,500 trades. Finally, the High Volume Trader tier costs $199 per tax season and is for users who have more than 2,500 trades.
Reporting is currently available for tax years 2010 to 2018. CryptoTrader.Tax currently offers a 25% discount on all reports for 2017 and earlier, according to the website. The company also provides a money-back guarantee if users are not satisfied with their reports.
All tiers — from free to the High Volume Trader — gain access to CryptoTrader.Tax’s live chat support system.
Kemmerer said high volume traders stand to gain the most value out of the CryptoTrader.Tax platform.
“Let’s say you’re doing what myself and my partners were doing back in 2017,” he said. “We were automating these complex strategies with software and, in turn, had tens of thousands of trades over the course of the year.”
Reporting such high transaction volumes by hand would be much harder and much more time-consuming, Kemmerer said.
Kemmerer said providing high-quality customer support is very important to the company and has helped it grow in a relatively short amount of time.
“We have trained customer support specialists who are answering all kinds of questions, especially during the busy tax season,” he said. “But bear in mind, we are not able to give specific tax advice.”
CryptoTrader.Tax specialists are there to help guide users through the platform itself. For customers who are looking for that level of guidance, Kemmerer said he’s happy to refer them to the network of accountants the company works with in the crypto space.
“In regards to user response to the platform, it’s been awesome,” he said. “When people realize they have this problem, they go searching online for a solution and find us. And they’re just so grateful. We have hundreds of customer testimonials saying thank you, and that we saved them days and weeks of work of doing this by hand.”
The company features a number of these testimonials — originally posted on Twitter — on the CryptoTrader.Tax website.
“If you need to prepare tax forms for your 2018 crypto purchases I can’t speak highly enough of @cryptotradertax. 10 minutes from signup to downloadable tax docs, which included a live chat support inquiry and its resolution. Unbelievable. Take my money,” wrote Russell Jones.
Multiple other reviews highlight the convenience of CryptoTrader.Tax and how it helps to remove the stress associated with doing taxes.
“Today, CryptoTrader.Tax is used by thousands of users worldwide, has processed more than 10 billion dollars of cryptocurrency transactions, and has partnered up with some of the biggest names in tax software, like Intuit TurboTax, to bring cryptocurrency tax compliance to the mainstream,” according to the company website.
Kemmerer said the company is always working on refining the platform and creating new components. He said he’s currently looking forward to some exciting developments on the horizon, including launching a platform for tax professionals.
“Right now we’re very much a B2C company where our users are people who are doing this themselves,” he said. “But we’re building tools to help tax professionals who manage perhaps between a dozen and 20 clients each year.”