TokenTax Review

If you’ve ever felt overwhelmed by crypto taxes, this TokenTax review is here to shine a light on a platform that’s making tax season less daunting for crypto enthusiasts. Whether you’re dealing with trades on exchanges like Bybit, Binance, or Kraken, the said platform aims to bridge the gap between blockchain complexity and tax compliance.

With several crypto tax software options on the market, you might wonder: how does TokenTax work compared to the competitors? For instance, if you’ve considered alternatives like CoinTracker or Koinly, you might be wondering which one offers better value for your needs. TokenTax has gained popularity for its ability to handle complex tax situations. However, is the platform worth trying?   

While features and functionality matter, so does the cost. Many wonder about TokenTax pricing and whether it’s worth the investment. Let's break down everything you need to know about TokenTax, so you can decide if it’s the right tool for your crypto tax needs.

Verdict at a glance: TokenTax excels in simplifying crypto tax reporting with a robust set of tools, including features like expert consultations and tax-loss harvesting that cater to users with complex tax situations. Its free crypto tax calculator and support for various currencies add convenience for casual users. That said, the higher pricing tiers and the need to manually complete additional tax forms might not suit everyone, especially those with simpler needs or a tight budget.

What is TokenTax?

Reading this TokenTax review means you're likely looking for a streamlined way to tackle crypto taxes. TokenTax is a cryptocurrency tax software designed to simplify the daunting process of calculating and reporting crypto taxes.

The platform stands out for its ability to seamlessly import transaction data virtually from any crypto exchange, calculate capital gains/losses, and generate tax forms automatically. In short, it’s a one-stop solution for crypto investors looking to manage their tax obligations without breaking a sweat.

TokenTax was born in 2017 thanks to Alex Miles, who initially built the platform to import data directly from Coinbase. His creation won the Product Hunt Global Hackathon, catching the attention of Zac McClure, who joined as a co-founder.

Together, they expanded TokenTax's capabilities, and in 2019, the company acquired Crypto CPAs—a cryptocurrency tax accounting firm led by CPA Andrew Perlin. As a result, their strategic move strengthened TokenTax’s position as a comprehensive solution, combining cutting-edge software with professional tax accounting services.

Under the hood, TokenTax combines technology and expertise to guide users through the entire tax process. From importing data to filing tax returns, it offers a seamless experience tailored to crypto investors' unique needs. The platform doesn’t just crunch numbers—it handles transaction data from every crypto exchange, calculates even the trickiest tax liabilities, and offers expert audit guidance.

TokenTax Review: PROS

Moving on to the pros of this TokenTax review, it's crucial to understand why so many users turn to this platform when handling their crypto taxes. The complexity of crypto tax reporting can leave traders feeling overwhelmed, but TokenTax’s features make it easier to stay compliant and organized. Let's take a deeper dive into its strengths.

Real-Time Tax Liability Tracking

TokenTax's premium plans give you more than just a set of tax reports—they offer tools that let you actively manage your tax liability throughout the year, not just at the filing deadline.

One of the most valuable aspects is the ability to track and preview your tax liability in real-time. Meaning, you won’t be caught off-guard when tax season rolls around. Instead of scrambling to figure out how much you owe, you’ll have a clearer picture of your tax situation in advance. As a result, you'll have the time to make adjustments if needed.

TokenTax supports multiple tax calculation methods, including FIFO (First In, First Out), LIFO (Last In, First Out), and average cost methods, so you can choose the one that works best for you. These calculations aren’t just about numbers—they impact your bottom line by determining how much tax you’ll pay. Hence, you might be able to save a pretty penny by picking the most favorable cost-basis method.

Then, there’s tax-loss harvesting. If you’ve been trading crypto for a while, you know how quickly the market can fluctuate. With TokenTax’s Tax-Loss Harvesting Dashboard, you can identify opportunities to sell assets at a loss and use those losses to offset capital gains elsewhere in your portfolio. It’s a smart way to reduce your overall tax liability, and many seasoned investors will tell you it’s an essential strategy to minimize tax bills.

Also included are detailed reports on Ethereum gas fees and mining or staking income. If you're into Decentralized Finance (DeFi), I'm sure you already know how complicated it can get when you need to report the rewards and fees associated with your activities. So, these tools come in handy.

Free Crypto Tax Calculator Available

TokenTax offers a free crypto tax calculator, a valuable tool for quickly determining investment outcomes. It’s perfect for those who need a rough estimate of their trades or want to double-check figures before filing taxes.

So, how does TokenTax work with this tool? All you need to do is enter the basic details of your trade—like your investment, buy and sell prices, investment fees, and exit fees. Once you’ve filled in these details, TokenTax automatically calculates:

• Profit/Loss: How much you’ve gained or lost on the transaction.
• Total Investment: The total amount you’ve spent on acquiring the cryptocurrency.
• Total Exit Amount: The amount you’ve received after selling your crypto.

Supporting multiple currencies like USD, BTC, ETH, SOL, BNB, and XRP, the calculator ensures that you can track your transactions across various platforms. This feature is a huge time-saver and helps you avoid the common mistakes of manual calculations.

Why is this a pro for users? Well, crypto investors, especially those new to the space, often struggle to understand how each transaction affects their overall tax situation. With the calculator, they can quickly get a snapshot of their gains or losses, saving time and reducing potential errors.

Customized Plans for High-Volume Traders and Businesses

TokenTax’s customized Enterprise plan caters to high-net-worth individuals, crypto businesses, and active traders with a large volume of unsupported or cross-chain transactions. These plans are designed to tackle unique challenges with precision, offering bespoke tax and accounting solutions far beyond cookie-cutter services.

One of the standout features of these plans is the access to a dedicated team of experts. This isn’t just a hotline with long wait times—it’s a direct line to professionals who understand the complexities of cryptocurrency taxes.

Whether you're juggling payroll in crypto, managing liquidity pools, or untangling a DeFi mess, having a dedicated team means you won't be left staring at your transaction history, wondering, “How does TokenTax work for such scenarios?”.

Another key feature of TokenTax’s Enterprise plan is its ability to support businesses with multi-entity structures. For companies with multiple subsidiaries or decentralized operations, the plan helps streamline tax reporting across different entities, ensuring compliance with varying tax regulations. Therefore, it's also an ideal choice for businesses operating on a global scale, where cross-border tax issues often complicate reporting.

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TokenTax Review: CONS

No TokenTax review article would be complete without highlighting the platform's limitations that may impact your experience. While the said platform offers many benefits, some users have pointed out areas where the service could improve, particularly in terms of pricing and certain features that might not be as intuitive as others.

Pricing Can Be Expensive for Casual Users

While TokenTax is packed with helpful features, its pricing structure can leave users feeling like they’re constantly reaching for their wallets. Several features require extra fees, which can come as a surprise. For example, the platform offers an add-on to generate an FBAR (FinCEN Form 114) report for $49.

The FBAR is crucial for US taxpayers with foreign bank accounts holding over $10,000 at any point during the year, and its purpose is to help prevent crimes like tax evasion.^[1] While it has tax implications, it’s submitted to the US Treasury Department—not the IRS.

To illustrate, taxpayers maintaining overseas accounts that mix foreign currency with crypto need to declare the total account value if it exceeds $10,000. However, TokenTax users managing foreign holdings might not realize they’ll pay extra for such essential compliance tasks.

As some TokenTax reviews point out, this approach to additional pricing can feel like nickel-and-diming. Traders who choose TokenTax's plans might expect such reports to be included, given the premium costs of TokenTax's pricing. The need to pay for add-ons may feel especially frustrating to those new to crypto taxes, who might not anticipate these hidden expenses.

Although the platform excels in customization and flexibility, this pay-as-you-go model might not work for everyone. For those who prefer simplicity or knowing exactly what they’re paying upfront, this drawback could feel more like a roadblock than a minor inconvenience.

No Assistance With Filling Out Additional Tax Docs

One potential drawback of using TokenTax is that users must fill out additional required tax documents, such as Schedule D, on their own. For those unfamiliar with the US tax system, this might feel like a burden.

Schedule D is an IRS form that reports gains or losses from selling capital assets, like stocks, bonds, or crypto.^[2] The capital gains or losses calculated on Schedule D are then combined with other income and reported on Form 1040 to determine your total tax liability.

For taxpayers who might not be familiar with this process or those looking for a fully automated solution, this extra step could feel like a hassle. Moreover, TokenTax’s pricing may not fully account for the additional time and effort required to handle these forms.

Many TokenTax reviews mention that while the platform does much of the groundwork for crypto tax reporting, users still need a basic understanding of tax forms to ensure everything is filed correctly.

TokenTax Alternatives

There’s no one-size-fits-all when it comes to crypto tax software. A lot of TokenTax review highlights its robust integrations and user-friendly tools. However, you might want to explore different platforms depending on your specific requirements. Let’s explore these alternatives to help you decide what works best for you.

TokenTax VS Koinly

A notable difference in the TokenTax VS Koinly debate is their pricing structure. Koinly offers a free plan that allows users to access all features except downloading tax reports, while TokenTax doesn’t provide a free plan.

However, TokenTax does offer a free crypto tax calculator, a feature that many users find helpful for estimating investment outcomes without committing to a subscription. For those with minimal tax reporting needs, Koinly’s free plan may seem more appealing, but TokenTax’s calculator adds value for users seeking a quick, no-strings-attached tool.

As for paid plans, Koinly's pricing starts at $49 per tax year for 100 transactions, whereas TokenTax begins at $65 for the same number of transactions. Although Koinly's lower price may appeal to budget-conscious users, TokenTax’s plans include personalized support, which could justify the higher cost for users needing assistance with complex tax situations.

Another area of comparison lies in the platforms’ integrations. Koinly supports over 800 exchanges, wallets, and blockchains, making it an excellent choice for users engaged in DeFi or those using less mainstream platforms.

In contrast, TokenTax directly integrates with about 120+ exchanges, including Binance, Kraken, Coinbase, and Bitfinex. While this covers the most popular platforms, users dealing with niche or decentralized exchanges might find Koinly’s broader reach more convenient. TokenTax attempts to address this limitation by accepting manually uploaded CSV files, a notable feature often highlighted in TokenTax reviews.

Security is another factor I want to point out in this TokenTax VS Koinly discussion. Koinly is transparent about its certifications, being SOC 2 and ISO 27001 certified.

Meanwhile, how does TokenTax work to ensure user data is protected? TokenTax states that it adheres to the highest security protocols to protect user data, which suggests a commitment to safeguarding sensitive information. However, the platform doesn’t disclose any specific certifications on its website.

Ultimately, the decision between the TokenTax VS Koinly debate depends on the user’s priorities. Koinly shines with lower pricing, broader integrations, and portfolio tracking tools. TokenTax, on the other hand, caters to users who need robust tax support, personalized help, and tools for advanced strategies like tax-loss harvesting.

TokenTax VS CoinTracker

The comparison between TokenTax VS CoinTracker highlights two distinct approaches to managing crypto taxes, each offering valuable features with differences in pricing and functionality.

CoinTracker is known for its user-friendly interface and support for over 500 exchanges, including popular platforms like Bybit and Binance. The platform integrates seamlessly with TurboTax, enabling easy e-filing for US tax filers. Additionally, it offers automated DeFi detection and syncs crypto activity across multiple platforms.

While TokenTax doesn’t support as many exchanges, it offers a more personalized approach with a notable edge: a 30-minute consultation with a crypto tax expert. The service allows users to get personalized advice and have their specific crypto tax questions addressed by a professional, which can be a significant advantage for those who need more detailed guidance.

Both CoinTracker and TokenTax offer tax-loss harvesting, a valuable feature for offsetting capital gains and optimizing your tax strategy. CoinTracker includes this functionality in its paid plans, which range from $59 to $599 annually, along with a tax lots breakdown that helps track the purchase and sale of assets at varying prices.

TokenTax also offers tax-loss harvesting on its Premium plans and above, starting at $199 per year. The higher starting price might deter users with simpler tax needs or tighter budgets. However, its specialized approach to tax reporting can make the cost worthwhile for those needing detailed reports.

In short, TokenTax VS CoinTracker comes down to specific needs: CoinTracker’s broad exchange support and easy sync make it ideal for users with large portfolios across multiple platforms, while TokenTax’s more hands-on approach and advanced tax report features cater to those who need a more tailored experience for filing taxes.

TokenTax Pricing

As we dive further into this TokenTax review,  let's talk about something that tends to make everyone a little nervous—pricing. For starters, TokenTax’s pricing structure ranges from wallet-friendly to "might-need-to-sell-some-Ethereum" levels. Here’s how it all breaks down:

Table: TokenTax pricing plans comparison.

The Basic plan is ideal if your crypto activity looks more like a side hobby than a full-time gig. Thus, if you’re just starting out with a handful of trades on platforms like Kraken or Coinbase, the $65 plan will cover you. It includes everything you need for a solid tax report—think IRS Form 8949, DeFi and NFT support, and even a bit of live chat support if you need to check in on a few details.

Meanwhile, the Premium plan steps things up for $199, offering support for up to 5,000 transactions and features like automatic CSV imports and tax-loss harvesting. For context, if you’re active on multiple exchanges or diving into DeFi projects, this plan might save you hours of manual labor—because who has time to organize gas fees after a long day of yield farming?

Moving into the Pro territory at $1,599, you’re looking at a setup tailored for high-volume traders who know their way around margin calculations and complex trades. The Pro plan brings advanced reporting and support for up to 20,000 transactions, making it a lifesaver for those with portfolios that could rival a small hedge fund.

For those who need the full VIP treatment—maybe you’re an investor with 30,000 transactions and don’t have time to stress over every minor detail—the VIP plan at $2,999 is what you need. You'll get expert-level reconciliation and consultations with tax professionals. The VIP & Filing plan, priced at $3,999, kicks things up another notch by offering full filing support.

However, another vital aspect to note in this TokenTax review is that some features require an additional fee. For instance, Tax Return filing for the VIP plan starts at $999.

Additionally, if you’re filing for a tax year close to the deadline, you might need to handle your own extension. Let's say you're using TokenTax to file for a tax year and approaching the tax deadline. The proximity to the filing deadline might require you to file an extension independently.

While TokenTax’s pricing might seem a bit steep for casual users, it’s important to keep in mind the value it provides, especially for those with larger, more complicated portfolios. The platform’s year-round support, expert tax advice, and tailored plans ensure you get a comprehensive solution for all your crypto tax needs.

How to Use TokenTax

Now, let’s focus on how you can make the most of TokenTax. So, I’ll guide you through the essential steps in this section of my TokenTax review. With this guide, you’ll be set to manage your crypto taxes like a pro. Let’s dive into how to use TokenTax and streamline your crypto tax reporting!

Step 1: Head over to the TokenTax website. On the homepage, you’ll find the [Sign Up] button at the top-right corner. Enter your email address and create a strong password.

Step 2: After submitting your details, you’ll receive an email verification link. Click on it to confirm your account.

Step 3: Once verified, log in to your new TokenTax account, and you’re ready to start linking your crypto exchange accounts.

Step 4: You will then be prompted to answer a few questions so TokenTax can calculate your tax liability, such as where you live, your marital status, estimated income, etc. That way, the platform can help you reduce your tax burden.

Step 5: On the dashboard, click the [Import Data] button to import your crypto transaction history. You can either do this via CSV upload or API integration with your preferred exchange. Let's choose the API integration in this tutorial.

Step 6: Select the exchange you want to connect. Fill in the API details, then click [Submit] when you’re done.

Step 7: Once connected, TokenTax will automatically import your trading history, helping you calculate your crypto gains and losses.

With your report ready, you can download it for filing or have TokenTax’s team review it for a more thorough check.

Conclusion

Concluding this TokenTax review, it’s clear that the platform offers a comprehensive solution for crypto tax reporting, catering to both individual traders and businesses. With its easy integration with major exchanges like Bybit and Binance, along with its intuitive interface, TokenTax makes managing crypto taxes a more manageable task for users worldwide.

However, there are a few areas for improvement, particularly in the pricing structure, which might be a bit steep for casual traders. What's more, while the platform automates much of the tax reporting process, users are still required to complete certain tax documents independently. Having a basic understanding of crypto tax regulations can help users leverage TokenTax's features and secure accurate filings.

As TokenTax continues to refine its offerings and expand its support for various exchanges and tax jurisdictions, those looking for a solid solution to handle their crypto tax obligations can feel confident in the platform's capabilities. If you're searching for a reliable tool to track, report, and file your crypto taxes, TokenTax is certainly worth considering.

The content published on this website is not aimed to give any kind of financial, investment, trading, or any other form of advice. BitDegree.org does not endorse or suggest you to buy, sell or hold any kind of cryptocurrency. Before making financial investment decisions, do consult your financial advisor.

Scientific References

1. Murray T. R. : 'The Eighth Amendment and Tax Evasion: Whether FATCA Non-Compliance Fines and FBAR Penalties Are Excessive';

2. Kessler L. L., Vandenberg N.: ‘Cryptocurrency and The IRS: A Case Applying Property Tax Rules’.