There's no escaping it. You gotta pay taxes on your cryptocurrency activity no matter how much you wish you didn't. But fear not, sorting out your crypto tax is far easier than you think. That's because a super accurate cryptocurrency tax calculator like Koinly has it all figured out, with seamless integrations to all your crypto wallets and exchanges.
Just how easy? Watch and see! In this video we'll show you step by step instructions on how to do your cryptocurrency taxes with Koinly.
We'll start by setting up your currency and tax base, and connecting the Koinly tax calculator to the most popular crypto wallets; Coinbase, Coinbase Pro, Binance and Ledger. We will also go over how to review transactions and fix some common issues.
Let's begin. The first thing you will see on Koinly after signing up is the Setup page.
Here you'll select your base currency, which is the currency you will be paying your taxes in. In our demo video, we went with USD.
Next, you'll select your home country so Koinly can set up your account with the required tax settings for it. We set ours to the United States.
Just so you know, Koinly supports a number of countries like the US, Canada, Australia, UK, Germany and more, and the instructions are the same for all of them (only the tax settings are slightly different). The goal with crypto tax software is to end up with a useable tax report. Using Koinly, you'll be able to download your Schedule D & Form 8949 (USA), Capital gains summary (HMRC), Schedule 3 (Canada) and any other tax declaration forms required by your country.
This is where you'll import your crypto transaction data. The good news is that Koinly supports hundreds of different crypto exchanges and wallets.
In our crypto tax demo video we went with Coinbase and Binance. We also show you how to import data from a Ledger wallet.
To connect Coinbase to Koinly, click on the Coinbase option and select Auto-sync. This will redirect you to the Coinbase website where you'll have to give permission so Koinly can read your transaction history and balances.
This is all read-only data which means Koinly will only be able to read your history, and not actually trade or transfer funds. Using Koinly to compute your crypto tax is a safe way to import data.
Once you've hit 'Authorize' Koinly will now import all transactions from your Coinbase account. This takes a couple of minutes.
Next we will add a Coinbase Pro exchange account. Keep in mind that Coinbase and Coinbase Pro require 2 separate wallets. Koinly won't get access to your Pro trades just by connecting to your main Coinbase account.
The setup process is a little different here as Coinbase Pro uses API keys. For those who don't know, an API key allows computer software and applications, such as Koinly, to access your account and read the data that you give it permission to read.
To complete the setup, head over to the Coinbase Pro website:
Next, we add the crypto exchange, Binance. To connect Binance to Koinly, click on the Binance option and select Auto-sync
The connection steps are the same as Coinbase Pro, so you'll just need to find your API keys. The Binance API also has some restrictions like if you bought or sold using fiat. If so, then that data will not be imported and needs to be added using csv files.
Now, copy your newly generated API key and secret key and paste these into Koinly. Hit Import and you're done.
If you have more exchanges or wallets to add you can continue to select from the available options on the Koinly Wallets page and synch away.
Need to add data from your Ledger wallet? Click on Wallets, select Ledger and auto sync.
Wallets like Ledger do not have any API keys but we can still auto sync the data using public keys.
A public key basically allows Koinly to import data directly from the blockchain. You will have to enter the public key for each of the coins in your wallet separately.
In our video, we add Ethereum and Bitcoin. Let's start with ETH:
Next, we add Bitcoin.
And that's it. We've now imported our transaction history to Koinly. The next step is to quickly review the data to make sure things are looking good.
A quick way to check that everything was imported correctly is to compare the balances that you see on Koinly with what you actually have on your exchange account. Some exchanges like Binance do not provide your complete transaction history via the API which means the balances on Koinly may be different.
If you used API to import all your data then Koinly will actually do this balance comparison for you and show a yellow icon next to any wallets where some balances did not match.
You can click on the wallets to see your balances. There are a few things you want to look out for:
Next let's head over to the Tax Reports page to see some estimates.
On the Tax Reports page you can download the tax reports you need. The great thing about using cryptocurrency tax software like Koinly is that it supports lots of different forms, as per the requirements of your country's tax office.
Good to know - Your Koinly crypto tax report is available for download in English & German.
That's basically one year of crypto tax headaches solved in less than 15 minutes and you won't have to worry about this next year since Koinly can now automatically import your data!