TokenTax | Cryptocurrency and NFT Tax Software Review

TokenTax | Cryptocurrency and NFT Tax Software Review

Cryptocurrency and NFT taxes are complicated and confusing. Fortunately, there are plenty of great third party software providers, like TokenTax, to help make it easier to track down and document all of your transactions across multiple wallets and exchanges.

Below, we’ll review TokenTax, its product suite, and how it can help you when preparing and generating reports for gains or losses on cryptocurrencies or NFTs. 

Editorial Note: Lucky Trader earns a commission from affiliate links on our tax guides. Commissions do not influence our reviews or recommendations.

What Are the Pros and Cons of TokenTax’s Crypto Tax Software? 

Pros

Cons

Clean, user-friendly platform

Expensive at higher tiers

Supports all major cryptocurrency exchanges and NFT platforms

Basic and premium versions lack some key features

Supports all world currencies and works in all countries

No mobile app

Generates Form 8949 for users across multiple wallets

Concerns with understanding of cost basis

Includes margin trading, tax loss harvesting, mining income tax, DeFi taxes, and ICO taxes

 

Supports TurboTax integration

 

Includes live support

 

 

What Is TokenTax? 

TokenTax is an industry-leading tax tool for cryptocurrency investors and NFT collectors.

In 2017, TokenTax won the Global Product Hunt Hackathon for helping bridge the gap between the old and new worlds of finance. It is now used by customers in over 30 countries.

Zac McClure, co-founder of TokenTax, graduated from University of Pennsylvania’s Wharton School of Business as a Palmer Scholar, along with undergraduate degrees in both accounting and international business from the University of Southern California. 

Working as an international financial accountant at JPMorgan, Imprint Capital, McClure has years of experience as a financial accountant and specializes in cryptocurrency, international tax filing, corporate financial statements, and financial and legal consulting.

What Is TokenTax’s Crypto Tax Product? 

TokenTax’s industry-leading cryptocurrency and NFT tax software uses algorithmic calculations to track and document all blockchain-related, taxable transactions.

TokenTax is available in all countries and works across all cryptocurrencies and major exchanges, including Gemini, Binance, Coinbase, Crypto.com, Kraken, Uniswap, and more. For more you can view the full list of exchanges TokenTax supports.

The TokenTax Platform requires little effort from users to get started. Simply sign up and let TokenTax’s custom-built tools handle all aspects of analyzing and reconciling transactions of digital assets. 

The TokenTax tax product also supports margin trading, which can be taken into consideration when calculating tax liabilities. Whether you traded contracts or bought on margin, TokenTax’s software tracks and documents the transaction for you.

If you’re looking to tax loss harvest before the end of the tax year, TokenTax makes it easy to see your current unrealized gains and losses. Strategically sell off losses or reset gains to lower your tax burden this year and next. Pro and VIP users will have access to live cryptocurrency and NFT tax accountants to help them determine which assets are best to sell to reduce their tax burden.

TokenTax is an international company and can be used with any currency. Tax Form 8949 will automatically be populated using the currency of your home country. This can be easily populated into TurboTax, which means TokenTax can take care of your full return, not just the cryptocurrency and NFT related part. 

The TokenTax Crypto Tax product has four different offerings: basic, premium, pro, and VIP. Below we’ll walk you through each one so that you can decide which best suits your cryptocurrency and NFT tax needs. 

What Level of TokenTax’s Crypto Tax Product Should I Choose? 

TokenTax provides three different offerings for differing cryptocurrency and NFT trading experience and activity levels. 

Basic

The basic service is only for traders that use Coinbase or Coinbase Pro, as it only works with the Coinbase and Coinbase Pro APIs. Users should not try to use the basic service with other exchanges and platforms.

The basic service offers support of up to 500 transactions with unlimited tax form revisions, as well as: 

  • Coinbase and Coinbase Pro API only
  • IRS audit trail transaction report
  • Income report
  • IRS Form 8949 or relevant international report
  • TurboTax online integration
  • FIFO/LIFO
  • Average cost basis for UK/CA filers
  • Live chat support
  • Option to add 20,000 transactions and FBAR for a cost

Premium

The TokenTax premium service is for slightly more advanced cryptocurrency traders who are not using Coinbase or Coinbase Pro. This service supports all exchanges and platforms. However, there is a limited number of transactions that can be calculated and analyzed.

Additionally, it's important to note that the Premium TokenTax product supports automatic integrations for decentralized finance (DeFi) and NFT trading as well. Below are the other key features for the Premium TokenTax product. 

  • Up to 5,000 transactions
  • Support for every exchange
  • DeFi and NFT support
  • IRS Form 8949 or relevant international report
  • Income report
  • Tax loss harvesting dashboard
  • Automatic CSV imports
  • Manual imports for ICOs and OTC trades
  • IRS audit trail transaction report
  • TurboTax online integration
  • FIFO/LIFO
  • Average cost basis for UK/CA filers
  • Live chat support
  • Option to add 20,000 transactions, margin data processing, and FBAR for a cost

VIP

The VIP service is for advanced DeFi, NFT, and cryptocurrency traders who want to chat directly with tax experts. All transactions, exchanges, and platforms are supported at this level without exclusions. 

The major benefits of the VIP service are as follows:

  • Up to 30,000 transactions
  • Advanced crypto reconciliation
  • Support for DeFi and NFT protocols
  • Two 30-min sessions with a tax expert
  • IRS audit assistance
  • All margin exchanges supported
  • FBAR included
  • Support for every exchange
  • DeFi and NFT support
  • Tax loss harvesting dashboard
  • Automatic CSV imports
  • Manual imports for ICOs and OTC trades
  • Ethereum gas fee report
  • Income report
  • Average cost basis for UK/CA filers
  • TurboTax integration
  • IRS form 8949 or international report
  • Live chat support
  • Unlimited tax form revisions
  • Option to add full filing by TokenTax and custom transaction counts for a cost

How Much Does TokenTax Cost? 

TokenTax’s Crypto Tax Software Plans vary in cost based on the needs of the user. Please refer to the section above to help determine which level is best for you.

  • Basic, $65/tax year
  • Premium, $199/tax year
  • VIP, $3,499/tax year (may require extra fees)

Is TokenTax Accurate?

It is impossible to verify that the TokenTax Crypto Tax Software is 100 percent accurate. As information is taken directly from exchanges, platforms, or CSV files that the user uploads, TokenTax will be accurate as long as the inputs in which it is given are accurate. 

How to Use TokenTax 

TokenTax has a simplistic, user-friendly interface that is designed for tax, cryptocurrency, and NFT beginners. Signing up is as easy as clicking on the blue “Sign up” button in the top-right hand corner of the home page. You will be asked to provide an email address and password, or sign up directly through your Google account.

Next, you’ll be prompted to select a tax year and an appropriate product tier from the aforementioned options. To review which plan is best for you, please review our “What Level of TokenTax’s Crypto Tax Product Should I Choose?” section of this article. Once you’ve selected your plan, you can add extras to your order, including the option of having TokenTax file your entire tax return, adding 20,000 transactions to your plan limit, and generating an FBAR report.

With an account created and the appropriate tax tier selected, you can click “Go to Checkout,” and pay for your order.

Once you’ve successfully signed up for TokenTax and purchased the plan that is right for you, you’ll see a welcome to TokenTax message. Depending on your plan, you’ll also have access to the tax dashboard, TokenTax’s tax loss harvesting tool, a view of all your transactions, and a section for importing data. 

To begin the analysis process and kickstart your tax return details, click on “Enter your 2021 details.” Next, enter basic information, including the country or state in which you live, your estimated income for the year, and your filing status for this tax year. This helps TokenTax accurately calculate your total tax liability.

After, you’ll need to import your transaction details into the tax dashboard. Click on “Import Data” in the header of the website. There are two options once you’ve reached the “Import” page. You can either upload all of your transactions via a CSV file upload, or directly track all of the exchanges and platforms you’ve used this year with API integration. 

To upload all of your transactions via a CSV file upload, find your wallet addresses on Etherscan or similar transaction history websites and download a CSV file or download a CSV file directly from the exchanges and platforms you’ve used this year. Click “CSV” in the “Import” section of the TokenTax website, and then click “Upload.” Select the CSV files you’ve recently downloaded with all your cryptocurrency, DeFi, and NFT transactions and submit.

To directly track all of the exchanges and platforms you’ve used this year with API integration, you can choose “API” in the “Import” section of the TokenTax website. “Add Source" will allow you to select the exchange(s) and wallet(s) that you use to trade. Navigate to the exchange(s) and wallet(s) you’ve selected and follow the instructions for API integration provided by TokenTax. After adding the API Key, API Secret, Name, and Start Date, click “Submit" to begin the importing of transactions directly.

After all your transactions and tax information has been stored in TokenTax, the platform’s algorithm calculates your overall tax liability and displays all relevant information on its tax dashboard. To download your tax forms, click “Download Tax Forms” in the upper right-hand corner of the tax dashboard page. You can download via PDF, CSV, and other formats. 

Lucky Trader’s TokenTax Review Conclusion 

TokenTax makes it quick and easy to file complicated and confusing cryptocurrency and NFT tax returns. The user interface is simple and intuitive, and completing the entire process takes only a few minutes.

With TokenTax’s specialized tools for margin trading, tax loss harvesting, cryptocurrency mining income, and ICO taxes, even the most seasoned traders and collectors can take advantage of the TokenTax platform. 

Sign up today to take care of your tax returns for 2022 without spending hours manually finding and calculating your tax burden. 

For even more crypto tax software reviews, please see our ZenLedger software review

Do you still have questions about cryptocurrency and NFT tax obligations? Our friends at RKO Tax documented seven key things users should know before the end of the 2022 tax year.

 

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