TokenTax Review — The Best Crypto Tax Software 2022? | by Satoshi | Oct, 2022
TokenTax has shown itself as the top crypto tax software solution by automatically calculating crypto taxes and generating crypto tax forms for its users. The TokenTax platform is great for newcomers since it is simple to use, and the interface is well-organized and straightforward.
Newcomers won’t be overwhelmed by an abundance of options and text. Connecting to different exchanges and wallets is a breeze with TokenTax because of their streamlined and consistent onboarding process. You should have no trouble integrating your other cryptocurrency services after you’ve connected one exchange or wallet.
If you wish to learn more, continue reading this TokenTax review. Before we begin, here’s a useful video explaining exactly how TokenTax works;
TokenTax is not only a tax filing program for cryptocurrencies like Bitcoin or Ethereum. All aspects of submitting your cryptocurrency taxes will be made easier with the support of the product’s dedicated staff of accountants.
TokenTax’s accountants have assisted clients with cryptocurrency tax filings in 18 countries, and the firm’s products and services are applicable in every country. When it comes to your tax files, TokenTax doesn’t stop at just keeping track of your cryptocurrency holdings. It’s a full-fledged tax accounting program that may help you save a lot of money in addition to the crypto you already own.
In addition to supporting every cryptocurrency exchange in the market, TokenTax also provides sophisticated crypto users with automated tax filing capabilities for use with decentralized finance (DeFi) use cases.
Compared to other crypto tax accounting services, TokenTax provides more customizable options for its clients. However, the cost of every plan is more than that of competing crypto tax reporting providers’ comparable plans.
There’s also the question of whether or not consumers want to utilize TokenTax for all of their annual tax filing demands or to figure out their crypto earnings and losses. All of TokenTax’s paid plans come with a 30-day money-back guarantee. However, there is no free trial available.
Users may get started with TokenTax for free with the Basic account. This account type can only import trade data automatically from Binance and Coinbase exchange accounts. However, Coinbase Pro activity is also included.
This severe restriction on a basic account is unusual among crypto tax calculation software providers. On top of that, whereas other services may charge you $50 or more for a basic account each tax year, TokenTax’s Basic account is $65 a year.
This TokenTax account type simultaneously supports the import of up to 500 transactions and features full TurboTax integration. However, due to its expensive price and a limited number of supported cryptocurrency exchanges, TokenTax is not a good choice for those on a tight budget.
There is some logic to upgrading to a premium TokenTax account. It works with every cryptocurrency exchange worldwide and can process up to 5,000 transactions per second. Additionally, this TokenTax account tier features automatic interfaces for DeFi-related operations, including margin trading on BitMEX, Deribit, and By bit.
Tax loss harvesting is a feature available to account holders that may be used to look for ways to reduce a person’s yearly tax liability. This account level costs an extra $99 compared to the average crypto tax accounting platform’s intermediate account level, but it has a more robust feature set.
If you’re a big roller who trades a lot of cryptos each year, you might consider upgrading to a TokenTax VIP account. You may import up to 30,000 crypto transactions, and this will support all available DeFi projects.
Aside from the standard fare offered to both Basic and Premium users, VIPs also have access to sophisticated crypto reconciliation. This is useful when tax has been overlooked or employing more intricate trading techniques.
Those upgrading to the VIP tier of TokenTax may also use two 30-minute meetings with a tax professional to answer their crypto taxation issues. Finally, it is important to mention that VIP members of TokenTax receive support throughout an IRS examination.
Since the platform does not demand any comprehensive information, the procedure as a whole is pretty straightforward. Token taxes also have the following benefits:
1. Includes full remittance support. TokenTax only supports 85 exchanges. However, its team will ensure that your trades are recorded in your account if you supply a CSV from an unsupported exchange.
2. Saving money on taxes by making use of past losses. To those with Premium and above plans, TokenTax offers advice on how to minimize their tax burden.
3. Accepts both the DeFi and NFT protocols. Specific DeFi protocols and NFT markets are integrated within the Premium and Pro tiers. In addition, the VIP plan incorporates all of the extras.
4. Is willing to take cryptocurrency as payment. Only a few crypto tax apps, like TokenTax, will take tokens as payment. You can make your payment in USDC, DAI, BTC, or ETH.
TokenTax also has several disadvantages.
1. It is pricey. Although the price of its Premium plan is comparable to other cryptocurrency tax software. Coinbase customers access the company’s most economical plan, which costs $65 per month. Its VIP subscription costs $3,500.
However, it only covers 30,000 transactions, which pales in contrast to competitors like ZenLedger and Taxbit, which allow limitless transactions.
2. No returns. No refunds are available through TokenTax since the company will do all it takes to ensure that your cryptocurrency tax data is accurate.
3. Included in this package is only Form 8949. You are responsible for completing any additional tax forms that may be necessary, such as Schedule D.
The greatest strength of the TokenTax platform is that it is designed to do much more than merely simplify the yearly tax filing process. To support the program, CPAs are ready to answer any questions regarding crypto taxes and advise you on money-saving strategies to reduce your overall tax liability.
Hiring a crypto tax accountant is more expensive than utilizing tax preparation software, but it is worth it for people anticipating a large crypto tax bill for the year. TokenTax’s universal compatibility with cryptocurrency exchanges and tax jurisdictions is another major selling factor.
TokenTax has thought of everything, so any crypto user, no matter where they are in the globe, may use it to keep track of their tax filings. While TokenTax’s interfaces with the largest cryptocurrency exchanges are more robust, trade data from any exchange that exports to a CSV file may be entered into TokenTax.
Additionally, the platform’s support for all tax jurisdictions worldwide is evidence of its commitment to serving the requirements of all cryptocurrency investors. The homepage of TokenTax also features several testimonials from well-known crypto industry figures.
Having high-profile figures like Messari’s CEO Ryan Selkis and CoinShares’ CSO Meltem Demirors vouch for TokenTax will reassure potential customers that they’re safe. Compared to other crypto tax reporting platforms, TokenTax has received far more endorsements from well-known figures in the crypto community.
Finally, it’s worth noting that TokenTax may serve as a replacement for all of your current tax account software needs. TokenTax isn’t only focused on the cryptocurrency industry; it also provides a comprehensive plan for individuals who want to utilize it for all their tax demands.
Although TokenTax appears to have the most functionalities, there are a few drawbacks to consider before deciding to use this platform as your crypto tax software solution.
To start, there is the question of the platform’s high price. Furthermore, the Basic account only supports two exchanges, which is $20 more expensive annually than other high-quality crypto tax applications on the market.
People with many cryptocurrencies in their portfolio would likely benefit from the extra features available with a Premium or Pro subscription. Still, those who need a simple, low-cost solution for their crypto taxes should seek elsewhere.
TokenTax’s lack of features as a cryptocurrency portfolio tracker is another possible drawback. Many cryptocurrency investors would benefit from being able to monitor their crypto holdings and file tax returns using a single app, but this is not an option with TokenTax. However, if you have a Pro or Enterprise account with TokenTax, you may easily import your Blockfolio crypto portfolio data.
The following are the questions that are asked the most commonly about Tokentax:
TokenTax stands out among similar services since it can assist cryptocurrency investors in any jurisdiction. TokenTax can provide its full suite of products and services for calculating the taxes related to your crypto capital gains and losses over the past year, regardless of location. It includes long-time bitcoin holders in the United States and new crypto traders in Southeast Asia.
In contrast to the majority of competing crypto tax software solutions, TokenTax supports every scenario without specifying which nations are covered on the website.
TokenTax encrypts your data using TLS, so it is not visible to anyone else. The only information it gathers is your transaction data and email address. Suppose you are particularly worried about the privacy of your data. In that case, you should join TokenTax with a “burner email address,” which is an email account used just for TokenTax, and pay with cryptocurrency.
We hope you enjoyed our Tokentax review. You might also like our Yieldnodes review!