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Koinly Review:  Is this Crypto Tax Software Right for You?

Koinly is among the top tax calculators for cryptocurrencies today. As an analogy, it holds the same status among crypto tax software that Coinbase holds among cryptocurrency exchanges. One of the biggest selling points of Koinly is that it allows you to easily generate regulatory-compliant tax reports and monitor your daily cryptocurrency activities by integrating your wallets. 

Nowadays, crypto taxation is a fuzzy topic. Most countries treat cryptocurrencies as luxury assets, and those that have regulated them consider these assets the same way as real estate or gold. 

Hence, in such regulated countries, you are liable to pay a Capital Gains Tax every time you purchase cryptocurrency. This applies to major countries like Canada, the USA, South Korea, the UK, and more. But, generating tax reports after tracking hundreds of transactions can be a hassle. Koinly helps you automate this process by automatically providing localized tax reports based on your wallet activity.

But is Koinly worth it? In this review, we will take a deep look at this crypto tax software and help you figure out how it works. 

Is Koinly legit and safe to use?

Yes, Koinly is totally legitimate and safe to use. All that this app does is use API keys to retrieve your activity data. It does not gain access to any of your assets. So, even if there was a hacking attempt at Koinly, your assets will remain safe because Koinly cannot directly access them. 

Generally speaking, Koinly is a very secure service and there are no known vulnerabilities or backdoors. However, there are also other alternatives to Koinly that help you calculate crypto tax returns. This includes platforms like TaxBit, CoinLedger.io, and CoinTracker to name a few. 

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Koinly Services

Our Koinly Review: Everything You Need to Know About The Tax App

Why do you need Koinly?

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Sample Tax Report

Koinly is a crypto-tax calculating software that makes tax returns from cryptocurrencies very easy. It helps you generate automatic tax reports based on your airdrop, staking, mining, and trading activity.

The best part is that Koinly is fully automated. So, all you have to do is connect your wallets, exchanges, or other crypto services with the Koinly app using API keys. The software will do the remaining work for you. 

It will import all your transactions, calculate the market prices at the precise time when your trades occurred, double-check all transfers between your wallets (to avoid adding it to the overall some), and calculate overall gains and losses. Based on this, it will generate a localized tax report for you.

Koinly Features and Options

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Sample Report

Koinly is an advanced crypto tax calculator with a range of important features for taxation. These include: 

  1. Support for multiple countries. Koinly is available in more than 20 countries across the Americas, Asia, and Europe. It generates localized tax forms such as Sheet 9A, Schedule D, Rf1159, K4, and Form 8949. 
  2. Easy to import data. Unlike other tax report software, Koinly makes it easy to import your cryptocurrency data using API keys and manual CSV files. The manual CSV files can be in the form of xPub/yPub/zPub. Similarly, direct data migration from BlockFi, CoinTracking, and Bitmex is also possible. 
  3. Free basic account. You can use Koinly to track up to 10,000 transactions for free and generate previews of your capital gains tax. However, to export them, you will need a premium account. 
  4. Great customer support. Another notable feature of Koinly is that it has great customer support. Koinly offers you a comprehensive support section with a FAQ page that is very detailed and answers most of the common customer questions. You can also reach them via live chat, e-mail, or social media accounts on Twitter and Facebook.
  5. Good resources. Koinly provides you with various resources, such as regional tax guides, a tax accountant list, blogs for information, and a crypto tax calculator. 

For accountants, the following features are also available:

  • Accurate crypto gains reporting
  • Import data from 700+ integrations
  • Manage multiple clients from one account
  • DeFi, NFTs, Futures, Margin Trading
  • Reports for ATO, IRS, HMRC, CRA & more

Koinly Price Plans

Koinly offers 4 different plans, and you can choose any of these based on your requirements. These include the Free plan, Newbie plan, Hodler plan, and Trader plan. Let us take a quick look at each of these plans. 

The Free plan might be a suitable option if you are just getting started. It contains all the essential features and allows you to track your portfolio value. At the same time, you can get a preview of your capital gains. It will track your futures, margin trades, and other DeFi activities. Lastly, you can track up to 10,000 transactions. 

The Newbie plan is suitable for those who have tried the free plan and want to take their usage to the next level. The annual pricing for this plan covers localized tax reports and an additional hundred transactions that can be filed. 

The Hodler plan is the most recommended for anybody who is more than just a hobby trader and has a higher number of transactions. It allows you to track an additional 1000 transactions on top of what the free plan offers. 

Lastly, consider choosing the Trader plan if you are a full-time trader. For an annual charge, you can track 10,000+ (3000 additional) transactions and enjoy all the features of the first two plans. On top of that, you can also pay an additional price for another 10,000 transactions. 

Koinly has an online free account that is useful in your portfolio monitoring and allows the creation of tax reports similar to those available in the free versions. The Koinly account is not supported by fax or other forms. DeFI, margins, and futures are not supported.

Koinly Exchanges and Wallets

Koinly supports a range of integrations with over 350 crypto exchanges, 50+ wallets, and 6000+ coins and offers 10+ diverse services in the world of crypto.

Some major exchanges that it supports include Coinbase, Coinbase Pro, Luxor, Binance US, Binance, Crypto.com, Bittrex, Kraken, KuCoin, Gemini, Bitfinex, CEX.io, BitMEX, GateHub, Bitbuy, and a lot more. 

It also supports all major wallets, such as Trezor, BlockFi, TrustWallet, Celsius, Exodus, Leader, and more. This makes Koinly an inclusive option for people with all preferences. 

As far as blockchains go, it has support for more than 6000 cryptocurrencies. Along with that, you can also enjoy its automatic import feature for 14 major blockchains, including Bitcoin, Ethereum, NEO, Polygon, EOS, Binance Chain, Litecoin, Avalanche, and more. 

Koinly Tax Reports

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Koinly is developed in close collaboration with tax firms around the world to ensure they comply with all the applicable tax laws as they relate to cryptocurrency. Koinly generates advanced and automatic tax reports that are localized for your region. For instance, it supports 100+ countries, including: 

  1. Canada and the US territories
  2. Europe – UK, Germany, Sweden, Denmark, Finland, Norway, Netherlands, France, Spain, Italy, Lichtenstein, Ireland, Czech Republic, Estonia, Malta, Luxembourg, Belgium, Poland, Ukraine, Iceland, Switzerland, South Africa
  3. Asia – India, Singapore, South Korea, and Japan
  4. Oceania – New Zealand and Australia

As far as localized tax reports go, Koinly generates the following formats and more: 

  1. Capital gains summary (UK)
  2. Schedule D and Form 8949 
  3. Rf1159
  4. Sheet 9A
  5. K4
  6. Swiss Valuation Report 

Other than these localized reports, it also shares standard reports that cover the following: 

  1. Complete tax returns. This report contains the original gains summary, capital gains transactions, margin gains, end-of-the-year balance, income reports, and asset summary. You can download this in the form of a PDF. 
  2. Transactions. This report covers all the transactions that you made and can be downloaded in the form of CSV. 
  3. Capital Gains. This contains all the disposals. 
  4. Income report. This CSV file will contain different income transactions that include staking rewards, interest, forks, and airdrops. 
  5. Gift, lost assets, and donations. This CSV file contains transactions that have been marked as donations, lost, or gifts. 
  6. Expenses. This report contains transactions that have been marked as your costs. However, it does not include the trading fees which are already covered in the capital gains. 
  7. Turbotax. This CSV file will contain transactions that can be imported to a filing software like Turbotax. 
  8. End of the year holding. This contains all your holdings at the end of the particular tax year.

Koinly Accessibility

Easily sync your data to Koinly and get a complete picture of all your trading activity.

  • Automated data import. Connect your accounts via API, add your BTC wallets using x/y/zpub keys and ETH tokens with your public address
  • Margin & Futures trading. Traded with margin on BitMEX, Binance, Kraken, or any other of our supported exchanges? No problem.
  • Staking, Lending & DeFi. Been using Nexo, Compound, Celcius, etc? Koinly recognizes and tags all your income
  • Smart transfer matching. Koinly uses AI to detect transfers within your own wallets and excludes them from tax reports

Koinly Security

As with all crypto tax software Koinly supports reading only API connection when it imports transactions. Koinly is not allowed to modify a cryptocurrency exchange or wallet. Koinly does not use any private key. Koinely also encrypted your information when you transfer it to another computer. This is overall the reason for Koinly becoming an extremely secure cryptocurrency tax tool. Koinly offers security on the web and in the brochure.

How to Set Up Koinly

Koinly works as a spreadsheet. It is similar to excel but with quicker and more automated functionalities. The usual process of finding your tax returns with Koinly is as follows: 

Step 1. Add Your Wallets

Wallets in the Koinly ecosystem represent containers for transactions from exchange accounts or crypto wallets. To get started with Koinly, one wallet can be created to be used in the exchange you trade with. To open the wallet click on the Wallet button. You can select your wallet by using the search function. You can use Koinly’s services in other apps to create your own custom wallets.

Step 2. Import your transactions into Koinly.

This can be done with API keys that you can get from your exchanges and wallets. Alternatively, you can export a CSV file from your exchange/wallet and import it into Koinly. 

Step 3. Check your calculations.

It is important to double-check the calculations to make sure that all your activities are properly reported. This free overview works similarly to usual portfolio tracker applications that provide insights into your holdings.

Step 4. Export your tax reports.

This is where you will require a paid package from Koinly. Once the tax returns have been calculated, you must export the report and then file your taxes manually or with any filing software. Koinly eases this process by offering different tax forms, such as Schedule D and Form 8949. Similarly, it also generates IRS tax forms for US residents. 

One great thing about Koinly is that it is exceptionally good at spotting and differentiating between various types of cryptocurrency activities. So, it will also calculate information from staking, margin trading, borrowing, lending, and mining. 

If you are using Ledger, here’s the process:

How to do your Ledger taxes with Koinly

One of the most popular hardware wallet providers, whichever Ledger device you’re using, it’s easy to do your Ledger taxes with Koinly.

  1. Sign up to Koinly and choose your country and currency
  2. Connect Ledger with Koinly to import all your Ledger trades safely and securely
  3. Koinly categorizes Ledger transactions into gains, losses, and income
  4. Koinly calculates your Ledger Capital Gains Tax and Ledger Income Tax
  5. Download your Ledger tax report from Koinly
  6. File your Ledger taxes online or with your crypto tax accountant

How to connect Koinly and Ledger via API

Ledger does have an API function so you can automatically get your transaction history imported into a crypto tax app.

You’ll need to get your wallet address for each blockchain you interact with from Ledger – for example ETH, BTC and BNB. The instructions will be slightly different for each depending on whether you need your public address or xpub key. When you’re connecting these in Koinly, you’ll see instructions for whether you need your public address or xpub key. Let’s take a look.

On Ledger

For Ethereum & any ETH tokens

  1. Log in to Ledger Live
  2. Select accounts from the left hand menu
  3. Select the blockchain/coin you want to connect, for example Ethereum
  4. Copy the public address

For BTC, BCH, BSV, DOGE, DASH & LTC

  1. Log in to Ledger Live
  2. Select accounts from the left hand menu
  3. Select the blockchain/coin you want to connect, for example Bitcoin
  4. In the top right corner, select edit account
  5. Select advanced
  6. Copy your xpub key

On Koinly

  1. Log in to Koinly and go to the wallets page
  2. Select add new wallet
  3. Search and select Ledger
  4. Select set up auto sync
  5. Select connect blockchain
  6. Search for and select the blockchain you’d like to connect
  7. Paste your public address/xpub key
  8. Select import

Important

1. You’ll need to connect every blockchain you interact with using Ledger to Koinly. So for example, if you have ETH, BTC and DOGE in your Ledger wallet, you’ll need to connect all of these to Koinly via your public address/xpub key in order for Koinly to calculate your crypto taxes correctly.

2. If you’re interacting with many blockchains on Ledger, it may be quicker to use the CSV file method below instead.

For other formats, you may refer to this Koinly resource.

Koinly Pros and Cons

Pro – Offers localized tax reports 

This is the best feature of Koinly. It supports more than 20 countries in Europe, Oceania, and North America. You can download localized tax reports for your country and save yourself the hassle of manually creating reports.

Pro – Free version with limited options

Koinly offers a free version that allows you to track up to 10,000 transactions and preview your capital gains. However, to download tax reports, you will have to go with one of the paid options. 

Pro – Extensive support for crypto apps

Koinly supports more than 6000 crypto products and 350 exchanges, with wide support for the most commonly used wallets.

Pro – Easy to import data

Unlike other tax report software, Koinly makes it easy to import your cryptocurrency data using API keys and manual CSV files. The manual CSV files can be in the form of xPub/yPub/zPub. Similarly, direct data migration from BlockFi, CoinTracking, and Bitmex is possible. 

Con – Does not accept crypto payments

It is disappointing that Koinily does not accept crypto payments despite being a crypto tax calculation app. So you are limited to KYC bank methods only. 

Con – Expensive for small traders

Koinly’s cheapest package, called “Newbie” starts at €39 per year. However, the “Hodler” plan offers the best value, but at €89, it can be expensive for small traders.

Koinly: Is It Right for You?

Koinly is suitable for traders looking for an all-in-one tax calculation system that delivers localized tax reports. However, before purchasing Koinly, you should check Koinly’s list of supported countries to get the best out of localized reports. 

While it is not cheap, it offers market-competitive pricing plans for traders of all levels. Another notable advantage is that Koinly offers a free plan to track 10,000 transactions. You can try it before choosing any of the yearly plans.

Start Your Koinly Account Today

Koinly is an advanced cryptocurrency tax software that tracks your portfolio accurately and with the right tags. Unlike other cheap options, this software does not mix up your transactions. So, you can stay assured that your taxes are being calculated accurately. Other than crypto taxes, the Koinly app also gives you an accurate picture of your cryptocurrency finances, based on:

Actual ROI and invested fiat. See how much you have invested in your coins
Income overview. Get an overview of your mining, staking, lending, and other crypto income
Profit/loss & capital gains. Easily see how much you are up or down. View realized and unrealized capital gains

It has wide support for most of the popular cryptocurrency exchanges, platforms, and wallets. So, you can easily connect your preferred platforms with Koinly using API keys. This will allow Koinly to track all your activity and report the returns for the particular tax year in localized formats based on your country of residence.

View your total holdings and portfolio growth over time – across all your wallets and accounts – along with your tax liabilities. Koinly is the best crypto portfolio tracker. Whether you are a taxpayer looking to get an accurate crypto tax report, a business looking to track your inventory, or an accountant trying to work your way through a maze of transactions, the Koinly app gets all your data covered.

FAQs

Is it safe to connect to Koinly?

Yes, it is very safe to connect to Koinly. That is because it only uses API keys to track your activity across different exchanges. This application does not access any of your wallets or funds in your exchange accounts. 

How accurate is Koinly?

Koinly is very accurate and has a high rating from its users. It generates localized reports based on your country of residence.

Does Koinly report to IRS?

No, Koinly does not directly report to the IRS. All it does is calculate your tax returns and give you a thorough report. You can also use it as a portfolio tracer. 

Does Koinly work with DeFi protocols and NFTs?

Yes, Koinly works with NFTs and DeFi protocols. It imports ERC-721 and ERC-115 NFTs automatically. So it will support NFTs from blockchains like Eth, FTM, POLY, AVAX, and more. The application’s developers are still working on adding support for other chains like SOL, XTZ, and WAX. You can also manually add your NFT trades from chains that are not supported.

For what countries can Koinly be used?

Koinly supports over 100 countries globally - only the most common ones are listed below. If your country uses any of our supported cost basis methods (such as FIFO, LIFO etc) then Koinly can help you with your crypto taxes! See the list of countries in our report.

Koinly's Comprehensive Tax Report is suitable for anyone looking to declare taxes - no matter which country.

Disclaimer. The information provided is not trading advice. Cryptopolitan.com holds no liability for any investments made based on the information provided on this page. We strongly recommend independent research and/or consultation with a qualified professional before making any investment decisions.

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Damilola Lawrence

Damilola is a crypto enthusiast, content writer, and journalist. When he is not writing, he spends most of his time reading and keeping tabs on exciting projects in the blockchain space. He also studies the ramifications of Web3 and blockchain development to have a stake in the future economy.

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