Still unsure how you’re going to claim your cryptocurrency gains on your taxes this tax season?
Have no fear, TaxBit is here!
Our TaxBit article will go into detail about exactly how they do this quickly and efficiently.
Background and Company Information
Table of Contents
- Background and Company Information
- What is TaxBit?
- How Does it Work?
- What tax forms do I need for cryptocurrency tax?
- TaxBit Features
- Is TaxBit easy to use?
- TaxBit Cost & Fees
- Pros and Cons
- The Real Review: TaxBit – Best Cryptocurrency Tax Preparer?
- Frequently Asked Questions
- Do I have to pay taxes on crypto?
- Can the IRS or FBI track Bitcoin?
- How can I sell Bitcoin without paying taxes?
- How can I avoid paying capital gains tax?
TaxBit was founded in December 2018 by Austin and Justin Woodward in Salt Lake City, Utah. Their company has built a tax engine that processes users’ cryptocurrency trades into reportable content for their taxes.
Justin Woodward comes from a long history of being an attorney. He understands the challenges that different CPAs and Tax attorneys experience with regular tax forms, let alone getting real-time data from crypto exchanges.
Austin Woodward has been in the accounting space for over half a decade so these two know what is needed to run a company like TaxBit. PayPal and many others knows this too.
The TaxBit team has been getting tons of support from investors and the crypto customer base alike.
If you’re doing taxes for an enterprise or just yourself, no matter who, you can leverage the TaxBit software to make it a breeze to handle your taxes.
What is TaxBit?
TaxBit simply automates the experience of cryptocurrency tax preparation. If you haven’t done your crypto taxes yet, then you may want to consider TaxBit.
To successfully process your cryptocurrency taxes, you must review your entire trading history. All the coins you’ve staked, swapped, brought, and sold are taxable events. This can be a very daunting task with any sizable amount of transactions.
TaxBit eliminates all the stress with this process. Their software streamlines everything you.
If you’ve experienced any losses or gains then you get awesome tax optimization strategies.
How Does it Work?
With tax automation, of course! You can easily get your TaxBit application up to speed by connecting their APIs to your exchange and it’ll automatically pull all the necessary details of your transaction history.
Once you completely connect all the exchanges you’ve used, you get a real time tax breakdown and service.
What tax forms do I need for cryptocurrency tax?
Every AML/KYC exchange out there will be sending you a 1099-K or 1099-B tax form that shows the crypto activity that you’ve done on their platform.
On your personal taxes, you will have to provide an IRS 8949 tax form showing the cryptocurrency taxable events.
The best thing about using the TaxBit platform is that they create all the documents necessary to do your taxes with little headache. You won’t have to worry about the documents you process once you are done with TaxBit.
TaxBit offers more premium features once you move up to their Plus+ package.
Some of the best features in their product includes their dashboard center. It showcases your taxable gains and provides a full-fledged tax optimizer. This solution makes it easy to see how much you should sell to reduce your taxable gains.
Another great feature of TaxBit is their full customer service support regardless of the package you have with them. Simply from the other reviews on TrustPilot, their users think that their customer service support is great and the TaxBit team as a whole has really impressive rating.
Is TaxBit easy to use?
TaxBit prides itself on providing users an easy to use dashboard that breaks everything down. You won’t get many challenges as TaxBit syncs everything down to the smallest detail.
Along with this, TaxBit has created their application to showcase the transactions in a full experience. If you are a novice to the tax industry, TaxBit will provide all the assistance and support needed to work for you.
TaxBit Cost & Fees
To use TaxBit, the pricing stretches from $50 a year to $500 a year dependent on the volume of transactions. If you know that you’ve done many trades last year then you may want to review your transaction amount.
The simple pricing structure compares to what you’ll find in the market, but TaxBit is a bit more premium.
With the higher price tag, you’re getting the complete gambit of services. Such as their Tax Optimizer, Loss Harvesting, Portfolio Performance, and CPA review.
Support is always included free of charge and you’ll be able to access their knowledge base.
With Koinly, you get the chance to actually test out doing your taxes with a crypto tax platform for free!
They have a forever free plan that allows you to get an idea of how you want to present your taxes. However, you don’t get the necessary documents and reports like your Schedule D or Form 8949 on the free plan.
But this is a great idea if you’re looking to actually test out this sort of software before you buy!
Check out Koinly here
In our review of Cointracker, here, we go over a bit more about its features and functionality. You’re getting a great tax platform with either CoinTracker or TaxBit. But the difference definitely lies in the pricing.
CoinTracker definitely costs more if you only need taxes done, but with their other apps. You are getting your money’s worth.
Check out CoinTracker Here
Very much an underdog in the crypto tax space, but BearTax has proven to be a tough competitor all around. You’re getting awesome pricing and a robust platform all in one.
If you find yourself in need of a more premium provider with an on-hand CPA to assist. Then you’re going to want to consider TaxBit for this sort of thing.
But our review of BearTax goes in-depth on how you can use the product and services.
Check out BearTax here
Pros and Cons
- TaxBit platform is highly focused on security and great service from their team
- TaxBit has an all-star rating
- Simple reporting on TaxBit dashboards and full transparency with their data
- To get access to the more premium features, you have to spend more money
- Unfortunately, the United States is the only country with support with TaxBit
The Real Review: TaxBit – Best Cryptocurrency Tax Preparer?
If you’re looking to make a decision on which tax software you should use to prepare your cryptocurrency taxes. Then TaxBit will be a great option for you to consider and many more people believe that too.
You get all the necessary documents you need at a reasonable price and if you need much more help, they have a streamlined experience to make that happen.
Frequently Asked Questions
Do I have to pay taxes on crypto?
Yes, you do have to pay taxes on the crypto gains that you’ve made. As with any asset purchase, taxes are a part of that investment so consider this in your cash-out strategy.
Can the IRS or FBI track Bitcoin?
Yes, the entire idea of Bitcoin and cryptocurrency is that it is on a ledger that never changes. So if you purchase Bitcoin from a KYC/AML exchange, you will have that coin tied to your identity and wallet.
If you brought Bitcoin, not from one of these institutions, then it’s still easy to track if the funds. Dependent on how your spending patterns are laid out.
How can I sell Bitcoin without paying taxes?
There is no legit way of selling Bitcoin without paying taxes. All the illegitimate routes can involve you losing your Bitcoin in the process. This would eliminate all the gains that you’ve made on the asset.
If you’d like to purchase gifts with Bitcoin, a great option would be to use a service like Fold App or BitRefill. You’re getting awesome discounts to use your Bitcoin to buy gift cards for yourself.
How can I avoid paying capital gains tax?
Of course, this isn’t financial advice or tax advice in any way.
But, we wouldn’t be shocked if in the future you can move your Bitcoin gains into a rental property.
Consult with your tax expert to find out if you could do so with your gains. You’ll still pay taxes on it though unless if you wait for more updates from your local governance.