If you’ve spent any time in the crypto world, you’re probably familiar with the not-so-exciting task of dealing with taxes. In the US, the IRS treats crypto as property and thus bases cryptocurrency taxes on capital gains, with rates ranging up to 37%.
While keeping track of your crypto transactions for accurate tax reporting can be daunting, fear not—I’ve got some good news for you. Meet Koinly, your new best friend in the realm of crypto tax management and portfolio tracking.
If you’re like me, juggling multiple cryptocurrency exchange accounts and wallets can be a headache when tax season rolls around. That’s where Koinly swoops in to save the day.
This handy app simplifies calculating crypto taxes, generates necessary forms and reports, and seamlessly integrates with popular tax platforms like TurboTax.
In this review, I’ll walk you through everything you need to know about Koinly.
Let’s dive in!
Koinly.io Overview
Founded in 2018 and headquartered in London, Koinly.io is crypto tax software designed to simplify the process of reporting taxes on cryptocurrency investments.
The founders, a team of finance and technology enthusiasts, recognized the growing need for a user-friendly solution to navigate the complexities of crypto taxation. With their combined expertise, they developed Koinly.io to provide crypto investors a seamless way to track their portfolios and generate accurate tax reports.
With a Koinly.io account, you can seamlessly track all cryptocurrency transactions across 700+ crypto exchanges and wallets. You can even consolidate all your crypto investments on Koinly’s dashboard, making it much easier to prepare your tax forms and track your portfolio.
How to Set Up a Koinly.io account
You can sign up for an account using your Goole or Coinbase account to get started.
Once you sign up and confirm your registration, you immediately have access to a free account without entering your credit card details. That’s a huge advantage for anyone looking to test out Koinly’s features.
With a free account, you can connect unlimited crypto wallets, DeFi services, and crypto exchanges to your account. Another advantage is that you won’t be required to submit KYC, which further adds to the simplicity of using Koinly for your crypto tax reporting.
Apart from its free plan, Koinly offers a paid plan with prices ranging from $49 to $179 per year. The platform’s most expensive plan is for professional traders who want to report taxes on thousands of transactions.
Is Koinly.io Safe To Use?
Yes, Koinly is safe to use, even by beginners. It uses a read-only API that connects your account to the exchange, wallet, or blockchain you want to track. Therefore, you can have peace of mind knowing that the Koinly API will not change your crypto wallet or exchange, as it doesn’t require your private keys to track your transactions. As the software tracks your transactions across multiple exchanges and wallets, it also encrypts the data in transit, thus making sure no data is stored or intercepted during the process. In addition, Koinly.io offers adequate customer support that boasts a 4.8 rating on Trustpilot.
What Makes Koinly.io Unique?
Firstly, Koinly boasts regulatory compliance with applicable tax laws across several jurisdictions, including the USA, UK, Sweden, Ireland, Australia, and 20 other countries. You can also get general tax reports across more than 100 countries, which is quite useful for crypto holders worldwide.
If you are new to crypto, filing your crypto tax reports can be a minefield. In most cases, there is no rule governing all the different types of crypto transactions, and crypto investments are normally categorized differently across multiple jurisdictions.
Koinly makes it easy to track crypto transactions automatically across multiple blockchains, wallets, and exchanges. Where you would spend days tracking your crypto transactions across various DEXs and CEX platforms, Koinly is capable of detecting crypto transfers between all your wallets using its AI-enabled bots.
The software can also create a statement with all the Forks, Staking Rewards, Airdrops, and DeFi transactions that trigger income tax reporting. You also get a tool that tracks your donations, crypto gifts, and losses so that you can easily tag your outgoing transactions.
What Transaction Types Does Koinly Support?
Koinly offers a comprehensive tool for automatically tracking spot trading transactions. It can also be used to track stake, Lending, DeFi, margin, and Futures trading transactions.
Setting up your account for automated data imports is as simple as linking your account’s API with a Bitcoin or Ethereum wallet. After your import is finished, Koinly will work to fetch market prices, match transfers between wallets, and calculate the capital gains for each transaction.
Besides tracking and calculating your tax reports, Koinly helps its users find a certified tax professional to help with complex tax reports.
Conclusion: How Koinly Compares To The Competition
One possible dealbreaker for Koinly, especially compared to its competitors, is its lack of a tax-loss harvesting calculator.
While Koinly offers an affordable alternative for retail traders with a few transactions to track, it doesn’t give you much room to offset your capital gains. However, the software is capable of highlighting your unrealized gains and losses, which is essential information for reducing your tax burden.
Overall, Koinly stands out for supporting multiple DeFi platforms, including its capacity to track NFT transactions. You can even add some transactions manually for better accuracy.
