Looking to pay taxes on cryptocurrencies and wondering what might be the best crypto tax software? Accurately reporting your crypto taxes is essential to stay compliant and avoid penalties. In this guide, we outline how crypto is taxed and also the top crypto tax tools to help you choose the best one for managing your digital asset taxes.
Ben Franklin once said the only certainties in life are death and taxes, and even though crypto didn’t exist in his time, the saying still holds true. If you’ve earned income from crypto, the IRS wants its share. Saying "pay your taxes" is easy, but actually doing it with crypto is a whole different challenge. Many investors are unsure where to begin. Tracking every transaction and properly reporting them on your tax return can quickly become overwhelming. Thanks to crypto’s complexity, tax season can be a real headache for digital asset holders.
Do You Need to Pay Crypto Taxes?
In the U.S. and many other countries, cryptocurrency is classified as a digital asset. The U.S. IRS treats it similarly to stocks, bonds, and other capital assets. Depending on how you acquired your crypto and how long you held it, any profits may be taxed either as income or capital gains. To determine if you owe taxes, you need to assess how you used your crypto. Actions that trigger taxes are known as taxable events, while those that don’t are considered non-taxable events.
Taxable Events as Income Tax
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Crypto mining: Income from crypto mining is taxed based on the fair market value of the coins when received. If you're mining as a business, this is considered self-employment income.
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Staking rewards: Like mining, staking rewards are taxed based on their fair market value on the day you receive them.
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Getting paid in crypto: If your employer pays you in cryptocurrency, it’s treated as regular income and taxed according to your income tax bracket.
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Getting an airdrop: Airdrops, often received through marketing campaigns or giveaways, are taxable as income and must be reported.
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Receiving crypto for goods or services: If you accept crypto as payment for products or services, it must be reported to the IRS as income
Taxable Events as Capital Gains Tax
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Selling crypto for cash: If you sold your cryptocurrency for fiat currency and made a profit, you’ll owe taxes on the gains. If you sold at a loss, you may be eligible to deduct that loss on your tax return.
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Swapping one crypto for another: Exchanging one cryptocurrency for another is considered a taxable event. The IRS treats this as selling your original asset, so if you made a profit, you’ll owe taxes on the gain.
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Using crypto for purchases: Spending crypto on goods or services is also taxable. The IRS views this as a sale, and any gain made between your purchase price and the value at the time of the transaction is subject to capital gains tax.
Non-taxable Events
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Buying and HODLing: Simply purchasing cryptocurrency with cash and holding onto it isn’t a taxable event. Taxes typically apply only when you sell and realize a gain.
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Gifting crypto to others: You can send crypto as a gift to others up to $19,000 per person in 2025 without triggering taxes. Gifts over this limit require filing a gift tax return, though you likely won’t owe taxes immediately.
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Receiving crypto as a gift: If you receive crypto as a gift, you generally won’t owe taxes until you sell it or use it in a taxable event like staking.
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Transferring crypto between your own wallets: Moving crypto between wallets or accounts you control isn’t taxable.
Best Crypto Tax Reporting Software and Services
Koinly
Koinly makes crypto tax reporting easy with support for over 415 exchanges, 120+ wallets, and 220+ blockchains. It provides comprehensive tax reports, offers various accounting methods, and has paid plans starting at just $49 annually. Koinly is a popular choice for users who value strong blockchain integration and user-friendly tools, especially those with diverse crypto holdings.
CoinTracking
CoinTracking is recognized for its tax loss harvesting capabilities and compatibility with 300+ exchanges, with developing wallet and blockchain integration as well. It’s ideal for experienced users and businesses seeking flexible, customizable solutions. CoinTracking’s advanced tax features and tailored plans make it especially suited for enterprises and high-volume crypto traders.
CoinLedger
Launched in 2018, CoinLedger is a reliable crypto tax platform that helps users manage both their tax filings and overall crypto investment portfolios. With support for over 630 software integrations including leading wallets and exchanges, CoinLedger helps to automate complex calculations. It can determine the cost basis of your transactions and consolidate all transactions on the same blockchain for smoother reconciliation. CoinLedger can be a versatile choice for everyday crypto traders as well as a professional-grade tool for accountants.
Crypto Tax Calculator
Crypto Tax Calculator is a reliable tool designed to simplify the often confusing world of crypto tax reporting and classifications. Powered by AI, it automatically sorts your transactions and calculates capital gains and losses. It also flags entries that need manual attention, streamlining the entire tax reporting process. Crypto Tax Calculator (CTC) supports over 3,500 software integrations, including 2,300+ protocols and more than 160 exchanges. One of its most convenient features is on-platform mass editing of imported data—eliminating the need for time-consuming spreadsheet exports and re-uploads required by some competitors.
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