Countries worldwide are beginning to regulate cryptocurrencies. Hence, most countries have started taxing these digital assets. Frequent cryptocurrency traders would agree that calculating crypto taxes can be quite stressful and time-consuming. This is where products like Token Tax enter the picture!
Token Tax is a cryptocurrency tax calculation platform founded in 2017 and started as a simple tool used to import data from Coinbase. However, over the years, Token Tax grew into a full-fledged platform allowing direct integrations from most of the popular centralized and decentralized exchanges.
In this article, we will put together everything you should know about Token Tax and help you decide if this crypto tax service is right for you.
Token Tax: Our Initial Takeaways
Like many other tax calculation platforms, the prime purpose of Token Tax is to solve one fundamental barrier to crypto adoption, i.e., accurate calculation of taxes. Previously, users were required to pay for a particular plan early on when they signed up. But that has now changed!
In 2023, users can create a free account on Token Tax and explore all its features before paying for a full-fledged plan. However, you cannot use any of its features without paying for them. But on the positive side, Token Tax is quite affordable as its basic plan starts at only $65 per year.
For users with complex tax situations, Token Tax also allows you to take help from certified public accountants for the manual preparation of taxes. Overall, it is a full-fledged crypto tax calculation firm and not just a regular tool.
But is Token Tax suitable for you? Let us move ahead and find that out!
Complete Token Tax Overview
Token Tax Features
Token Tax allows you to seamlessly import data of your transactions from major exchanges and crypto products such as BlockFi, Bitfinex, Coinbase, crypto.com, and more. It also supports all the major blockchains. However, your available integrations may be limited based on your chosen plan. For instance, the basic plan only allows integration with Coinbase and Coinbase Pro, while the Premium package supports every centralized exchange.
Other than syncing your data, Token Tax allows real-time tax bill previewing. This allows you to track your liability accurately. Furthermore, Token Tax uses a minimization algorithm in which the platform automatically chooses the purchases that minimize your taxes.
When it comes to crypto tax forms, Token Tax allows you to download every tax format. These include Form 849, FBAR, Schedule D, and international forms. On top of that, it also has integration with other tax filing software like TurboTax.
If your situation is a lot more complex and you require accounting assistance, Token Tax will go one step ahead and offer you help from professionals. In such cases, Token Tax can handle issues like missing cost basis, messy data, high volume of transactions, transactions across different chains, and much more.
Token Tax Pricing
|Plan||Pricing||Integrations||Transactions Limit||Customer Support||Extra Features|
|Basic||$65 per year||Coinbase & Coinbase Pro||500||Live chat||Integration with Tax Act and TurboTax|
|Premium||$199 per year||Basic + NFT imports, DeFi, and CeFi exchanges||5000||Live chat||Basic + Eth gas fee reports, tax loss harvesting, and automatic CSV imports|
|VIP||$3,499 per year||Premium + all DeFi and NFT platforms||30,000||Priority chat and two consultations for 30-minutes each||Premium + IRS inquiries review, and advanced reconciliation|
|Enterprise||No specific amount||VIP + all DeFi and NFT platforms||Unlimited||Priority chat and expert consultations||VIP + additional accounting solutions|
Those who are just starting out with crypto tax calculation and only use Coinbase or Coinbase Pro for their crypto-related activities may find the basic plan suitable. While cheap, it only allows tracking up to 500 transactions, which may be too low for many serious and hobby traders.
The Premium plan offers the best value in this regard, as it allows you to import NFT data and supports a wider range of exchanges. On top of that, the transaction limit is increased to 5000, and you can also enjoy automatic CSV imports.
Moving ahead, the VIP plan is more suitable for full-time crypto traders as it supports 30,000 transactions and a wide range of other tax calculation features. But at $3499 per year, this plan is only suitable for serious traders with a higher budget.
Token Tax Usability
Token Tax is incredibly easy to use and has an intuitive user interface for beginners who have never calculated their crypto taxes. On top of that, its performance is top-notch, as it is capable of processing calculations quickly. They also have proactive customer support, and you can reach out to them via e-mail or live chat. Depending on your chosen plan, you can get priority consultation, further improving your useability.
Token Tax Security
Token Tax works by importing API keys from various exchanges and wallets. New crypto users naturally wonder if the application gains full access to the exchange accounts. Well, API keys only allow Token Tax to read data. So, even if there was a data breach at Token Tax, nobody can steal your tokens or get access to exchange accounts via API. So it is very safe to use. On top of that, Token Tax also uses solid encryption protocols to prevent unauthorized access. But there is one downside! Token Tax does not have a feature for two-factor authentication. This means that all you need is your pass word and username.
Not having two-factor authentication is risky because hackers only need to know the credentials of the users in order to break into an account. Two-factor authentication prevents that and requires unauthorized users to enter more information, thereby acting as a barrier. So, Token Tax does lack in that aspect.
Token Tax Wallets & Exchanges
Token Tax supports almost all of the known crypto exchanges and wallets in the world. However, it is important to note that not all exchanges are considered equal by the software. For instance, some of the most popular exchanges support API keys integration. However, you cannot directly link your account to the smaller exchanges. Instead, you can use import CSV files into Token Tax after generating them on the exchange.
Nevertheless, it is still impressive to see that Token Tax also supports some of the new decentralized exchanges in DeFi. Some of the popular exchanges that are listed on the official website of Token Tax include:
- Celsius Network
- Yearn Finance
- Cash App
But these are not all. Token Tax supports a wide number of exchanges and wallets. Even if you do not find the integration, it is always possible to upload CSV data, and the software will easily track all your transactions.
Token Tax Accessibility
Token Tax makes it easy for new users to calculate their crypto taxes. It has a very easily navigable interface that makes crypto tax calculation accessible for traders of all levels. But unfortunately, Token Tax does not have a mobile application. This might come off as a surprise because most serious platforms have support for multiple devices.
Nevertheless, it is not uncommon for crypto tax calculators to lack mobile support. It can be tricky for mobile app developers to include features like importing data, file formatting, onboarding, etc. Instead, it is significantly easier and more efficient to carry out these processes through websites. So, not having mobile support is not a big downside for Token Tax.
Token Tax FAQs
What is the Difference Between Token Tax vs. Other Crypto Tax Platforms?
Token Tax allows integrations with a wide range of centralized and decentralized exchanges. This may not be true for other crypto tax platforms, as many other platforms only support popular centralized exchanges. Token Tax also has more comprehensive packages and supports NFTs at higher plans as well.
What’s Unique About Token Tax?
TokenTax offers specialized tax accounting services along with crypto tax calculation. So, it is a full-fledged tax calculation service instead of a simple app. You can get priority consultations with trained accountants and tax experts at higher plans in real time. This helps traders who have complex cases and are looking for customized solutions.
How Do I Sign-Up for Token Tax?
To sign up for TokenTax software, follow these steps:
- Go to the TokenTax website.
- Click on the “Sign Up” button in the top right corner of the homepage.
- Choose a plan that suits your needs and click on the “Get Started” button.
- Enter your email address and create a password to register for an account.
- After completing the onboarding process, you can start calculating your crypto taxes.
What Are the Pros and Cons of Token Tax?
Pros of TokenTa:
- Token Tax supports a wide range of cryptocurrency exchanges and wallets, making it easy to import transactions and generate tax reports.
- The software offers a user-friendly interface and helpful customer support to assist users with any questions or issues that may arise.
- Token Tax provides a range of tax reports, including Form 8949 and Form 1040 Schedule D, to help users comply with tax regulations and accurately report their cryptocurrency gains and losses.
- Token Tax offers competitive pricing compared to other cryptocurrency tax software providers.
Cons of TokenTax
- Token Tax does not offer a free plan, and pricing can be higher for users with a larger number of transactions or more complex tax situations.
- The software may not be suitable for users who prefer to track and calculate their cryptocurrency transactions for tax purposes manually.
- Token Tax only supports tax reporting for cryptocurrency, so users will need to use other software or services to report gains and losses from other types of investments or assets.
Token Tax: Is It Right for You?
Token Tax is highly suitable for traders of all levels who want to report their tax returns accurately. It is particularly useful if you have been making trades on multiple exchanges and wallets, as it has extensive support for different exchanges and wallets. However, to integrate all exchanges, we suggest choosing the Premium plan because the Basic plan only supports Coinbase and Coinbase Pro. Since it does not have a free package, it is suitable for serious traders who are making actual profits on an annual basis.
Is Token Tax a Worthy Investment?
Yes, Token Tax can be a worthy investment if you are a serious trader who generates some form of profit from cryptocurrencies throughout the year. It can help you accurately calculate your annual taxes in localized formats quickly and efficiently. However, the basic plan does not offer much value due to its lack of support for exchanges other than Coinbase. We suggest you take a thorough look at the pricing and plans before deciding.