TokenTax Review 2021

TokenTax Review: Introduction and Overview

Filing taxes for cryptocurrency investors and traders can be a daunting affair. Most investors and traders use numerous exchanges and platforms and may have their holdings distributed among several wallets. On top of this, there are a variety of ways to earn cryptocurrency, both established and emerging, such as mining, staking, lending, yield farming, airdrops, and selling NFTs, which complicate the tax landscape even further. Tax authorities are trying to figure out how to deal with this new asset class in real-time, so it’s undoubtedly tricky for crypto traders to be sure if they’re keeping on the right side of the tax code.

A number of companies have capitalized on the opportunity to assist crypto investors and traders with their taxes. One of these companies is TokenTax, which provides both a software platform and professional services for those looking for help with their crypto tax filing. In this review, we’ll take a look at the main features of TokenTax and assess whether a subscription to this cryptocurrency tax platform is worth your money.

What are the Main Features of TokenTax?

TokenTax uses your imported data to generate all the essential reports you’ll need to make a fully compliant tax return. TokenTax users can generate the following:

• Audit Trail Report
• Cryptocurrency Mining & Income Tax Report
• International Gain / Loss Report
• FBAR Highest Yearly Balances
• IRS Form 8949 PDF
• Tax Loss Harvesting Report

Audit Trail Report

An audit trail report is essential, as it provides a breakdown of how your capital gains or losses have been calculated. The report generated by TokenTax includes details about all taxable events, where they took place, fees paid, and if any new assets were acquired in place of the sold asset.

Cryptocurrency Mining and Income Tax Report

This TokenTax feature is really useful as it calculates the fiat value of any cryptocurrency income you received during the course of the tax year. Additionally, the report categorizes income, depending on whether you received it via, for example, airdrop, staking, or mining.

International Gain / Loss Report

TokenTax generates capital gains reports for any country and in any currency. As you would expect from any cryptocurrency tax software worth its salt, it supports a wide range of accounting methods including FIFO, LIFO, and Average Cost Basis.

FBAR Highest Yearly Balances

TokenTax provides this useful tool, in order to ensure compliance with the onerous US Fincen “Report of Foreign Bank and Financial Accounts“, which requires account holders to report on accounts that exceed $10000 USD. This report calculates the highest yearly balance for any international exchanges you’ve traded on. This report is included in the pro and VIP plans and is a $50 add-on for all other plans.

Tax Loss Harvesting Report

Tax-loss harvesting is a strategy whereby you sell certain assets at a loss to minimize your tax liability. TokenTax has a dedicated dashboard, where you can see exactly which assets you could sell strategically to lower your tax bill.

Exchanges and Platforms Supported by TokenTax

You can use TokenTax to calculate taxes and generate reports for any exchange you might have bought or traded cryptocurrencies on. The basic plan for TokenTax, however, only includes API integration for Coinbase & Coinbase Pro. If you trade on other exchanges, you’ll have to upgrade to at least the premium TokenTax plan.

TokenTax also provides automated integrations for margin trading accounts, such as BitMEX, Deribit, and Bybit, as well as DeFi and NFT platforms (e.g. Uniswap, Opensea, Aave, etc.) Again, these services are available to users to subscribe to the premium, pro, or VIP plans.

TokenTax Pricing

Like most other cryptocurrency tax platforms, TokenTax has a tiered approach to its pricing. The basic plan for $65 dollars per tax year is quite limited. This option is only suitable for users who have up to 500 transactions and exclusively use Coinbase and Coinbase Pro. In addition, the basic plan doesn’t allow users to import CSV files where API integrations are not available.

See Also

CryptoTrader.Tax Review 2021

There is quite a jump in price to the next tier, which costs $199 per year. Even though it’s a three-figure price tag, the premium package is quite good value. This plan scales up to 5,000 transactions and includes support for all exchanges, including margin account platforms like Bybit, as well as NFT and DeFi exchanges.

TokenTaxes Pro ($799) and VIP ($2,500) tiers are for serious traders, who have up to 20,000 and 30,000 transactions respectively, and who engage in more advanced trading strategies like margin, options, and futures trading.

The VIP plan includes personal and bespoke services. Two 30 minute sessions with TokenTax’s qualified tax advisors are included in the plan, as well as IRS audit assistance.