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TaxBit Review 2021

TaxBit is a relatively new entrant in the market of crypto tax software platforms, but it is backed by some of the biggest names in the cryptocurrency investment space. While most crypto tax apps are generally focused on the final end user, TaxBit is also able to help enterprises who need to issue a large number of 1099s.

The plan is for TaxBit to be a one-stop shop for anyone who needs help with anything related to the taxation of cryptocurrencies,and whether the customer is a consumer or a company doesn’t matter. The TaxBit Consumer and TaxBit Enterprise versions of the app are also compatible, which means all users will get a seamless experience across all TaxBit products.

TaxBit users are able to automatically import their crypto trades from a wide variety of exchanges, and the level of professionalism found with this crypto tax software is hard to match. Even regulatory agencies have been known to use the TaxBit software to get a better grip on this emerging problem area for the crypto space.

Let’s take a closer look at why TaxBit has gained a lot of traction in the crypto tax application ecosystem in a relatively short period of time.

TaxBit Overview

Is Taxbit the right crypto tax software for you?

TaxBit Overview

  • Useful for consumers and institutions alike
  • A one-stop shop for cryptocurrency accounting
  • Very reputable company with backing from the biggest names in crypto
  • Money-back guarantee on all software
Cost tiers: Free Trial, $50 Basic, $175 Plus, $500 Pro
Exchanges supported Kraken, Gemini, Coinbase and numerous others

Pros

  • Backed by some of the biggest names in crypto

  • Works for both consumers and enterprises

  • Leader in crypto-focused 1099s

  • Used by regulatory agencies

  • Designed by CPAs and tax attorneys

  • Free trial available

Cons

  • Relatively new

  • Can be very expensive

  • No mobile app availability

  • Currently only works with the IRS in the United States

How Does TaxBit Work?

TaxBit is a relatively new offering in the sphere of crypto tax applications; however, they’re already making a lot of noise. The company made a bit of a splash in the media in early 2021 due to the announcement that they had raised $100 million from some of the biggest names in the crypto investment space.

The connections made with the likes of Coinbase Ventures and Winklevoss Capital have helped TaxBit quickly become the defacto solution for enterprises that need to help their customers with their 1099 forms every year. While the top packages for this crypto tax software platform are rather pricey, there may not be a more professional crypto tax app on the market right now.

TaxBit’s plan is to get anyone who needs to do their crypto taxes every year onto the platform, and they’ve even been able to help out regulatory agencies who are still learning how to navigate this new world of blockchain technologies.

Best Features of TaxBit

The best feature of TaxBit does not really have anything to do with the actual software at all. It’s more about the level of trust that users can put into the TaxBit system as a whole. TaxBit is built to be the most trusted crypto tax software on the market, and that goal is underpinned by the entities that have backed this project with their own money. Paradigm, PayPal, Coinbase Ventures, and Winklevoss Capital are some of the most prestigious names in the cryptocurrency investment space, and they’re all backers of the TaxBit crypto tax app. This sort of backing from well-respected investors in the crypto ecosystem makes TaxBit perhaps the most credible solution to the growing problem of how crypto will be taxed around the world.

Another key feature of TaxBit is the 360-degree view taken by the company in terms of who should use the platform. It doesn’t matter if you’re the average person on the street who just needs to figure out how much money they owe in taxes for a single bitcoin purchase or you’re a regulator trying to grasp the basics of crypto taxation, TaxBit has you covered in both cases. Additionally, the plan is for TaxBit to be the default option for enterprises who need to help their customers correctly file their crypto taxes every year. At the end of the day, TaxBit wants to become the trusted institution for all aspects of crypto taxation, sort of like the TurboTax for crypto.

Finally, a great feature of TaxBit is that they offer both a free trial and a money-back guarantee on their products. This company stands behind their crypto tax software platform, and they’re willing to let you try the product for free or get your money back if you don’t like the app. TaxBit’s free trial offering is available for all four account tiers, so you can make sure you’re getting the right version of the app before you buy access to it.

Is TaxBit Good for Beginners?

TaxBit’s overall goal is to be a crypto tax solution for any company or individual involved in the cryptocurrency ecosystem, and that definitely includes beginners who may be learning about crypto taxation for the first time.

The user interface for TaxBit is extremely intuitive, and the layout is designed in a way where an individual can see their entire portfolio and zoom in on specific transactions to get more details whenever necessary. This platform is also integrated into a number of different cryptocurrency exchanges, so some people may be beneficiaries of this product whenever they receive a 1099 form from a third party service in the crypto industry.

There is also a free trial available for TaxBit, which means those who do not know much about how crypto taxation works are able to try out the software and learn a bit more about the benefits of TaxBit before forking any money over for the app.

What’s the Sign-Up Process?

The best way to get started with TaxBit is to go to the official homepage and look for the “Join” button in the top-right corner of the page.

There are also various buttons you can click for starting a free trial offer on various TaxBit web pages. Once you’re on the sign-up page, you will be presented with a form to fill out that requests some basic information about you such as your postal code and estimated income.

This first part of the sign-up process is used to figure out the specific tax rates that can be applied to your capital gains accrued during the previous tax year. Once your tax rates are calculated based on your location and income, you will then be asked to connect all of your exchange accounts to the TaxBit platform.

This will automatically import all of your trades from these exchanges and calculate your gains and losses. Once this information has been complied and synced, you can then load all of your data in the TaxBit interface and get a high-level view of your crypto tax situation.

How Much is TaxBit?

Pricing for the TaxBit crypto tax software is similar to many of the other options on the market. There are three different paid tiers to choose from on the platform, and a free trial is available for whichever type of account you decide to purchase.

Basic Account

The first TaxBit account tier is known as Basic. This is the barebones version of the platform that will not offer you anything extra in terms of assistance with finding possible tax savings or easily important some of your more advanced uses of cryptocurrency throughout the year such as earning income from decentralized finance (DeFi) applications on Ethereum. This tier is limited to 250 transactions per year and costs $50. Additionally, it should be noted that a Basic account can only be used for the tax forms related to the most recent tax year.

Plus Account

With the Plus account, you really start to get loaded up with extra features for handling your yearly crypto taxes. A TaxBit Plus account works for any tax year, which means you can go back to previous years and report gains that you have not yet reported to the local tax authorities. Also, Plus users gain access to four additional tools for handling their crypto tax reporting: Tax Optimizer, Loss Harvesting, Portfolio Performance, and DeFi Beta. These tools are useful for more advanced crypto traders and DeFi users who use their crypto activities as at least a good portion of how they make a living. A TaxBit Plus account costs $175 per year and is limited to 2,500 transactions.

Pro Account

Finally, a TaxBit Pro account is basically for anyone who treats their crypto activities as a full-time job. While it may seem pricey at a cost of $500 per year, it is more than worth it in many cases due to the additional features that come along with this account tier. First of all, up to 25,000 transactions can be imported into TaxBit for Pro users. More importantly, this TaxBit Pro users are able to get their tax reports reviewed by a CPA before they are sent in to the local tax agency. Having a certified accountant look over your crypto tax filing can not only make sure that you avoid any mistakes on your tax forms but also potentially lead to additional savings that you missed when originally compiling all of your crypto trading data.

What Countries are Supported?

According to an FAQ on the TaxBit website, the crypto tax reporting platform currently only works for individuals who are reporting to the United States’s Internal Revenue Service (IRS). That said, the company is also working on increasing the number of countries of supported as quickly as possible to more than 100 different jurisdictions around the world. Additionally, you can contact TaxBit at support@taxbit.com if you would like to be notified when their crypto tax service becomes available in your country of residence.

What Exchanges are Supported?

Although TaxBit is currently limited to those who pay their taxes to the United States Government, pretty much every exchange around the world is supported by this platform. Most of the popular exchanges are compatible with TaxBit via direct API support, but the smaller exchanges that do not offer this sort of functionality can also be made compatible with TaxBit via manual CSV file imports.

TaxBit even has an automatic CSV import feature for dozens of exchanges that will make it much easier to deal with these kinds of files. On top of this extensive exchange support, TaxBit has native support for more than 2,500 different cryptocurrencies and has been developing a tool for tracking activities in the DeFi ecosystem that is currently in beta. Here are some of the most popular exchanges supported by TaxBit:

  • Bittrex
  • Bitstamp
  • OKEx
  • Uphold
  • Gemini
  • Kraken
  • CEX.IO
  • KuCoin
  • Coinbase
  • Binance
  • Abra

Potential Dealbreakers

Although TaxBit has an impressive list of investors backing the company, this platform is still extremely new and comes with a number of different potential dealbreakers for some crypto users.

For one, the cheapest version of the TaxBit app is much more limited than what is offered at most other crypto tax software platforms. While other platforms tend to simply limit the number of trades that can be imported into an entry-level account, TaxBit takes the extra step of also limiting the overall functionality of the app for these users. Those who are paying $50 for their yearly crypto tax reporting via TaxBit will not have access to somewhat common features such as tax loss harvesting and DeFi activity tracking. Those who have a limited number of yearly crypto trades may want to look elsewhere for their crypto tax tracking needs. It should also be noted that TaxBit is, generally, more expensive than other offerings on the market.

Another potential issue with TaxBit for some users is the fact that there is no mobile app available for this platform. While those with a lot of trading data to go through will probably have no issue with sitting down at their laptop for a few minutes to look over everything before sending their reports to the tax authorities, the reality is some people still enjoy the convenience of using an app on their phone rather than visiting a website in a browser on their desktop computer. That said, the lack of a mobile app could simply just a sign of how new TaxBit is as a crypto tax software application.

Another issue that may come down to the fact that the platform has not been around that long more than anything else is that TaxBit currently only works in the United States. The platform has plans to integrate many more jurisdictions in the future, but you’ll need to look elsewhere, at least for now, if you’re a crypto trader who does not pay taxes to the IRS.

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CryptoVantage Staff

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