Essential Crypto Tax Software Features: 2025 Feature Guide
Over the past decade, the cryptocurrency market has grown from a pennies-worth ecosystem into a trillion-dollar industry. This is unsurprising as the market has won the hearts of retail investors, deep-pocketed individuals, institutional firms, wealth funds, and even governments. However, with many people making money from the industry, government authorities around the world have seen the need to impose taxes on crypto.
Each country has its crypto tax guidelines that users must comply with. Most tax authorities mandate taxpayers to create and submit accurate tax reports showing their crypto transactions throughout the tax year. But compiling these can be difficult, especially for those who frequently engage with crypto. What’s the best solution? Crypto tax software tools.
This article highlights five top software tools that you can choose from regardless of your location. We also highlighted essential crypto tax software features that will guide your choice.
Key Takeaways:
- Crypto taxation has now become completely mainstream and unavoidable. Get ahead or overpay in taxes.
- Manual reporting is not only outdated, but also risky. Avoid penalties and overpayments.
- 2025 and 2026 bring new US reporting requirements.
- Choosing the right crypto tax software depends heavily on your activity level.
- Automation, security, and compliance are pretty much non-negotiable.
Understanding Crypto Taxes
As we embark on a quest to understand the essential features of crypto tax software, it is crucial to first establish a solid understanding of what crypto taxes entail and how they impact traders and businesses investing in the cryptocurrency asset industry.
It is common knowledge that governments impose levies, known as taxes, on individuals and businesses, which are usually channeled into financing public expenditures and funding various socio-economic initiatives. Similarly, cryptocurrency traders and investors are also subject to paying tax on their crypto asset transactions, including capital gains tax on profits from buying and selling cryptocurrencies.
Apart from countries like El Salvador, many prominent nations around the world are currently implementing their own policies on crypto taxes. For instance, in the United States, the Internal Revenue Service (IRS) considers crypto as a digital asset and treats it in the same manner as stocks, bonds, and other capital assets. Hence, the country imposes taxes on both short-term and long-term gains.
In the United Kingdom, the HM Revenue & Customs (HMRC) considers crypto as property and imposes a fee on crypto gains above a £6,000 ($8,020) exemption. Meanwhile, the National Tax Agency (NTA) and the Ministry of Finance in Japan view crypto gains as miscellaneous income and treat them as taxable income.
In Canada, the Canada Revenue Agency (CRA) classifies crypto gains as either capital gains or business income, depending on whether they are generated under capital or business income. In Germany, the Federal Ministry of Finance (Bundesministerium der Finanzen) imposes tax on profits generated from crypto assets sold within a year, but not on crypto assets held for more than a year.
Africa is also not left out. Nations like Nigeria, South Africa, and Kenya have either introduced or are working on policies that will treat cryptocurrencies as taxable activities. Starting January 2026, Nigerians will pay tax on profits gained from crypto trades, and exchanges will be required to submit reports on users’ activities for tax purposes. On the other hand, South Africa already taxes crypto transactions under normal income tax rules, and the taxman expects taxpayers to declare their crypto assets.
Criteria for Crypto Taxes
Given the tax policies on crypto assets in several countries, does this imply that the government will levy taxes on every single crypto-related activity, including buying, selling, trading, and holding crypto assets? No! Certain specific exemptions and thresholds apply.
For instance, buying and holding small quantities of crypto assets for personal use does not incur a tax fee in most countries. In some regions, individuals are also not required to pay tax for receiving or giving out crypto assets as gifts, inheriting from families, or donating crypto to Non-Governmental Authorities (NGOs) or a tax-exempt charity.
However, below are some of the following cases where crypto investors must pay tax on transactions:
- Buying and selling crypto assets for fiat currencies like USD or EUR.
- Exchanging crypto assets for another, e.g., Bitcoin for Ethereum.
- Receiving or using cryptocurrency to purchase goods or services.
- Earning cryptocurrency through mining or staking: In this case, individuals are charged based on the current market value of the crypto asset.
- Receiving salary in crypto: This will be charged based on the individual’s income tax rate.
- Crypto received from airdrops (a promotional offer or giveaway by a crypto project) or forks (a blockchain split that creates new coins for existing holders).
How Does Crypto Tax Software Work?
As we have established, crypto taxes are mandatory in most countries. Yet, navigating this complex landscape can be a daunting task, regardless of your experience level. Whether you’re new to crypto, an experienced investor, or a DeFi expert, manually compiling and calculating your crypto taxes can be an arduous, time-consuming, and error-prone process. This is especially true when juggling multiple accounts across various exchanges and wallets.
This is precisely where crypto tax software offers a much-needed solution, streamlining the process, saving you time, and reducing the risk of errors.
Crypto tax software is a tool or platform designed to help individuals and businesses compile, calculate, and report their cryptocurrency taxes accurately. The calculation covers all crypto transactions, including buying, selling, mining, etc.
How Does This Software Work?
First, the user links their exchange or wallet to their preferred crypto tax software. Then, the platform extracts the user’s transaction history through the Application Programming Interface (API) after the user provides their API keys.
Alternatively, the user can upload their data using Comma-Separated Values (CSV) format, especially if it’s from a self-custodial wallet.
Next, the software tracks the user’s transactions and categorizes them into buying, selling, trading, and transfers.
Following that, the app calculates the user’s capital gains and losses based on the transaction data by leveraging market data from trusted sources to accurately determine the market value of their cryptocurrencies at the time of each transaction.
Based on the user’s tax filing status and existing tax laws, the software calculates their tax liabilities from their gains and losses, then compiles the data into detailed tax reports and summaries.
The software then allows the user to review the report for mistakes and provides an avenue to edit and adjust any errors. If everything is accurate, the user can then submit the generated tax reports to the relevant tax authorities.
Crypto tax software platforms not only compile your crypto transactions into tax reports, but also help track your portfolio in real time. In addition, they offer audit support and tax planning guidance, including features like tax-loss harvesting, to help minimize your taxable income.
What’s new for crypto tax reporting in 2025 and what to expect going into 2026?
In 2025, the Internal Revenue Service (IRS) continues treating cryptocurrencies as property – not as currency. This means that gains and losses are taxed in a similar way to stocks and real estate.
In other words, if you sell, trade, convert, or even use crypto, you will typically have a taxable event.
Form 1099-DA
- From January 2025
Starting on January 1st, 2025, crypto brokers and exchanges must issue a new form (Form 1099-DA). It reports gross proceeds from digital asset sales and exchanges.
- From January 2026:
The same Form 1099-DA will also require reporting of cost basis. In other words, the purchase price together with fees.
What this means for regular users: Many of us are likely to receive new reporting documents from exchanges. Additionally, the IRS will have more visibility into our crypto transactions.
Wallet-by-wallet cost basis tracking
The IRS is shifting away from a “universal pool” or the aggregated tracking of assets across wallets and exchanges. Starting in 2025, you may also need to track the cost basis and your gains per wallet or per account in accordance with Form 1099-DA.
Repeal of some broker-reporting requirements in DeFi
In April 2025, there was a bill signed into law, which nullified the requirement for certain DeFi platforms to have to act as “brokers” and to report transactions to the IRS under the previous rule.
For regular users, this means that some peer-to-peer platforms might carry less reporting duty than before.
Tax deadlines and rates
Despite the new forms and reporting requirements mentioned above, the main tax deadline and rates remain the same—you have until April 15th to file your taxes.
What are the Essential Crypto Tax Software Features?
With a multitude of crypto tax software platforms available in the market, investors may find it overwhelming to choose the right one. There are several crypto tax software platforms with a diverse range of options, each catering to specific needs. Therefore, a crypto investor needs to identify their individual requirements and priorities.
Whether you’re a casual investor or a seasoned trader, understanding what features matter most to you will help you navigate the market and select a platform that accurately meets your needs, whether that’s ease of use, advanced portfolio management, DeFi tracking, or professional support.
When sourcing for a crypto tax software tool to suit your needs best, there are several features to look out for. They include:
- Support for local tax laws: When choosing a crypto tax software, users must check for platforms that support their country of residence. While some software tools like Koinly and TokenTax may offer multi-country support for individuals, others like TaxBit provide services primarily for EU and US users.
- Exchange, wallet, and blockchain integration: This is another essential feature to look out for. Ensure that the crypto tax software you plan to use supports and can seamlessly connect with the various cryptocurrency exchanges, wallets, and blockchain networks you use. This feature facilitates automatic import of transaction history, seamless tracking of holdings and transactions, and accurate calculation of tax liabilities.
- Security and data protection: The importance of security can never be overemphasized, especially in the crypto industry. Before choosing a crypto tax software tool, ensure that the platform has robust encryption, two-factor authentication, and secure servers to protect your sensitive financial information and cryptocurrency data from unauthorized access, breaches, or losses. A reputable crypto tax platform must adhere to industry-standard security protocols, such as SSL/TLS encryption, and maintain a strong track record of protecting user data.
- Compliance with local tax rules: It is essential to confirm that your crypto tax software tool complies with your local tax laws, regulations, and reporting requirements. Considering this feature will help you get accurate calculations of tax liabilities, generate necessary tax forms, and help you file taxes correctly, without the risk of audits, penalties, or fines. In addition, ensure the platform stays up-to-date with changing tax laws in case specific tax regulations are revised.
- Support for your transaction type: Each trader can choose to be involved in only one or more aspects of the crypto sector. This can include buying, selling, trading, staking, lending, etc. It is essential to confirm if your crypto tax platform can take into account the complexities of each transaction type and accurately handle and generate accurate tax reports for various kinds of cryptocurrency transactions.
- Integration with accounting tools: Seamless integration with certain accounting platforms like QuickBooks, Xero, etc, means that your transactions will sync automatically with traditional financial records. This is very important because it eliminates manual data entry, reduces the possibilities for human errors, and provides a unified view of your overall finances.
- AI reconciliation for missing trades: AI-powered reconciliation can detect gaps in transaction history by automatically cross-referencing wallet, exchange, and blockchain data. It can identify missing trades or mismatched records to help you ensure complete accuracy when filing your taxes.
- Automatic wash-trade detection: This feature identifies transactions where the assets are sold and repurchased within very short periods and, hence, disallows losses that aren’t tax-deductible under IRS rules.
Practical tips for choosing the best crypto tax software
By now, you probably understand quite a bit, but of course, you don’t need to opt in for a tax software that has all of these features. Here are five practical and expert tips for choosing the best solution.
- Match the tool with your activity level.
The more exchanges and wallets you use, the more advanced your tool should be. This also means that you are going to pay a higher fee, but that’s only natural. On the other hand, if you are not as active, there is no need for you to opt in for all of the fancy features and you can save up some money.
- Prioritize compliance for your own country.
This is especially true with the new U.S. Form 1099-DA reporting and the wallet-by-wallet cost basis rules that kicked in at the beginning of 2025.
- Check data import methods.
Again, this should be tailored to your own abilities. If you aren’t comfortable working with APIs, use a tool that allows you to import a simple CSV table.
- Ensure strong data security.
Your choice should have some basic security features, which include encryption and 2FA. On a more thorough level, you should look for GDPR-compliant data handling, especially if you are in the European Union.
- Consider some addons.
Many of the tools that we cover offer services on demand, meaning that you don’t necessarily have to buy them. However, some of these “addons” can save you a lot of money. For instance, features like tax-loss harvesting and CPA support might be well worth their money in certain cases.
You can also read our detailed guide on how to choose the best crypto tax software in 2025.
Top Five Crypto Tax Software Tools in 2025
For an in-depth breakdown, check our guide on the best crypto tax software for 2025.
Here are the top five crypto tax software you can choose from to cater to your tax needs:
| Name | Key Pros | Price | Rating |
|---|---|---|---|
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$49 – $199 |
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$49 – $499 |
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$59 – $3499 |
20% OFF for Cryptopotato readers
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$49 – $199 |
10% OFF for Cryptopotato readers
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$65 – $3499 |
Koinly
Often regarded as the best crypto tax software, Koinly offers a wide range of services that match the needs of users in 20+ countries. It tracks crypto transactions across staking, DeFi, NFTs, and much more. It also makes it easy for users to import transactions automatically from dozens of exchanges, wallets, and blockchains, meaning you spend less time generating tax reports. The platform’s dashboard offers clear visual summaries of your trading activity, helping you track performance.
CryptoTaxCalculator
CryptoTaxCalculator is another top choice for those seeking crypto tax software solutions. The platform boasts an interface endowed with the necessary tools to track transactions across centralized and decentralized crypto exchanges. It also tracks tokens derived from airdrops, staking activities, and other crypto-based services. The platform allows users to calculate their tax reports as far as 2013.
CoinTracker
CoinTracker doubles as a crypto tax calculator and a portfolio tracker, giving users a complete picture of their digital assets. It connects seamlessly to most major exchanges and wallets, automatically syncing data to generate tax reports. The platform supports a wide range of activities, including staking, NFTs, and DeFi. The platform’s interface allows users to track performance and calculate gains and losses with ease. CoinTracker is also great for long-term investors who want to view their overall profit trends. It currently serves over three million users globally.
CoinLedger
CoinLedger is a crypto tax software that helps users to fulfill their tax obligations through its intuitive interface. It currently serves over 700,000 crypto investors in various countries. It also provides white glove services to users who want the platform to import and classify their crypto transactions for them. It also has a dedicated learning section for those who want to amass tax-focused knowledge to better understand how tax works.
TokenTax
TokenTax is considered one of the most advanced crypto tax software options available. The software supports every type of crypto activity, from DeFi and NFTs to margin and futures trading. TokenTax also provides audit-ready documentation, making it ideal for investors handling complex or large-scale portfolios. Users can choose from different plans depending on their trading volume and support level. Its professional team helps with international tax filings, making the service popular among global crypto traders.
Crypto tax software vs Manual tax reporting
Having discussed crypto tax software at length, you may still wonder if they are really worth the expense. Here is an unbiased comparison between automated crypto tax software and manual tax reporting:
Crypto tax software
Pros
- Eliminates human error.
- Handles complex transactions.
- Saves you time.
- Useable without tax expertise.
Cons
- Most services are expensive.
- Susceptible to a security breach.
- Relies heavily on only the provided data.
Manual tax reporting
Pros
- You retain complete control.
- Cost-effective
- Increased privacy.
- Provides an opportunity to gain deeper financial knowledge.
Cons
- High risk of error.
- Time-consuming.
- Lack of real-time insights.
- Susceptible to inaccuracy.
Frequently Asked Questions (FAQ)
What is the best software for crypto taxes?
Koinly and CoinLedger are recognized as the best crypto tax software overall. This is because of their user-friendly interface, robust set of integrations, multiple helpful features, and broad support for many different types of cryptocurrency transactions. Other popular options include CoinTracker, CryptoTaxCalculator, and TokenTax.
What is needed for crypto taxes?
In the US, you need to file Form 8949. You can file as many Forms 8949 as needed to report all transactions. Starting January 2025, your crypto exchange will also issue Form 1099-DA.
Do I pay taxes on crypto I never sold?
The answer is simple – no. The IRS (as well as most other international tax authorities) do not require you to report your crypto purchases on your tax return if you haven’t sold or if you haven’t otherwise disposed of them.
How long do I have to hold crypto to avoid taxes?
If you hold your crypto for more than a year after you purchase it, you would owe long-term capital gains. Now, depending on your broader taxable income and jurisdiction, that would mean that you owe 0%, 15%, 20%, or more in taxes.
How do I avoid capital gains on crypto?
Avoiding capital gains on crypto legally is possible, but challenging without expertise. Therefore, you should start by hiring a crypto-specialized CPA, using a crypto tax software, and keeping very careful record of your activities.
Conclusion
Tax obligations are responsibilities that must be settled in most countries. Do you want to enjoy your crypto adventure without fear of troubles from tax authorities? Then, you need to always cover your crypto taxes. Using crypto tax software makes the process easy, fast, and accurate. If you decide to choose from those discussed in this article, perform due diligence to ensure you make a well-thought-out decision.
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