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Using free Crypto Tax Calculators to handle your Crypto Taxes

Reporting and handling crypto taxes can prove to be an arduous and confusing task for most crypto traders. However, the Internal Revenue Service (IRS) made its stance on filing crypto taxes clear to the public.

In July 2019, the IRS made an official statement where it mentioned that it had sent warning letters to over 10000 crypto taxpayers who were suspected of evading their crypto taxes.

In addition to this, they issued another set of letters specifically for taxpayers who had not reported their crypto transactions correctly.

These letters stated that failure to pay crypto taxes could attract penalties and, in some cases, land the crypto traders in prison. As a result, many companies began to release free crypto tax calculators to help crypto traders prepare their crypto tax reports.

Reporting your Crypto Taxes

Once you calculate all the required crypto information, you need to attach a copy and fill up the IRS Form 8949.

Make sure this form contains a detailed report of your entire list of crypto transactions, all of which will be checked against your capital gains or losses during the year.

Form 8949

The 8949 form is a tax form mandated by the IRS that needs to be filed by all crypto traders. Every crypto transaction, including purchases, sales, and trades, will have to be recorded, along with the purchase date and for how much it was originally bought.

Doing this will establish your Cost Basis and Fair Market Value, which is required to compute your capital gains and losses correctly. Once this is done, transfer the capital gains or losses amount to Schedule D. Schedule D is an attachment of Form 1040.

The Best free Crypto Tax Calculators

Using a free crypto tax calculator is your best bet to handle your crypto taxes. Here are a few free crypto tax calculators you ought to know about.

CoinTracker

CoinTracker is a popular free crypto tax calculator. It claims to be the one-stop solution for all your crypto needs. Here are some of their features:

  • It makes provisions for its crypto traders to review their tax summary and download completed reports they need to file their crypto taxes.
  • CoinTracker can be seamlessly integrated with TurboTax without hassle.
  • It gives crypto traders options that include fee and margin trading.
  • It also provides its traders with a performance tracker that can give you visuals on a trader’s crypto investment and portfolio management.

TokenTax

TokenTax is a free crypto tax calculator designed to support every major crypto exchange. Considering how great a tax calculator this is, you can find it on every top 10 free crypto tax calculator list. Aside from its ability to calculate your crypto taxes, TokenTax has many additional features to fulfill all your crypto needs.

  • TokenTax can automatically produce tax forms, such as Form 8949, for returns.
  • It can also import your crypto data and information from the exchanges it supports to fill in the 8949 form.
  • It allows the crypto trader to track capital gains, losses and other tax liabilities for every crypto transaction.
  • Finally, TokenTax has a tax-loss harvesting feature on its dashboard that can clearly display your unrealized gains and losses.

ZenLedger

ZenLedger is a stellar free crypto tax calculator that has begun to cement its place on the best free crypto tax calculators list. It functions as excellent crypto tax software and simultaneously provides a plethora of useful features. Here are a few features worth noting:

  • It is known to be compatible with all the leading crypto exchanges, supporting cryptocurrencies and conventional fiat currencies.
  • It also imports your entire crypto trading history and seamlessly generates essential documents, including donations report, capital gains report, closing report, and income report.
  • ZenLedger gives you accurate profit and loss statements that you or your Certified Public Accountant (CPA) can utilize.

CryptoTrader.tax

CryptoTrader.tax is another well-known free crypto tax calculator that allows crypto traders to calculate their capital gains or losses within minutes of importing their crypto trader data and makes sure that you do not overpay your taxes.

This free crypto tax calculator produces completed tax forms that are compatible with the IRS. CryptoTrader.Tax is widely known for its international tax support and its ability to calculate your capital gains and losses using conventional fiat currencies. The tax reports that it provides typically include precise information of a crypto trader’s activities. It consists of the following:

  • Your crypto Income Report
  • The IRS Form 8949
  • End of the Year Positions Report
  • The TaxAct Direct Import Report
  • A Crypto trader’s Audit Trail Report
  • Your long-term and short-term sales reports

BearTax

BearTax offers a plethora of useful tools to help you go about filing your crypto taxes. These include the provision to calculate your capital gains and losses and export documents to file with your tax report. Here are a few features:

  • A section dedicated to capital gains and losses for individual crypto trades
  • Shows vital information such as the date of purchase, sale or trade of each crypto coins
  • A ‘Smart matching’ algorithm that matches crypto deposits and withdrawals from numerous supported exchanges
  • The ability to review each trade and help avoid negative balances.

BearTax is compatible with centralized exchanges and decentralized exchanges as well.

There you have it. These are a few incredibly useful free crypto tax calculators you can utilize to simplify the process of filing crypto taxes.

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