How to do your Binance taxes
Koinly can help you do your Binance taxes safely and quickly, and generate accurate Binance tax reports. All you need to do is sign up to Koinly and connect Binance automatically via API or by uploading a CSV file. Koinly will then calculate your Binance gains, losses, income, and more, before generating your crypto tax reports.
Follow these steps to sync your Binance data automatically to Koinly:
- Log in to Binance.
- Go to the Binance API management page.
- Select Create API
- Complete the 2FA.
- By default, only the read permission will be granted. Make sure that no other permission has been granted to the API keys and that there is no IP restriction
- Copy the API key and API secret to Koinly
Note:
Binance also has a special Tax Report API, which will also work with Koinly. However, the Tax Report API will not allow full access to the Futures transaction history, which is why we recommend creating the regular API keys instead.
Subaccounts
If you use subaccounts with Binance, you will need to import this data as well.
If using API, create separate API keys for each subaccount. Add them to separate Binance wallets in Koinly.
Please check your Transfers between the main account and your subaccounts, as these may need to be added manually.
On Koinly:
- Create a free account on Koinly
- Complete onboarding until you get to the Wallets page and find Binance in the list
- Select API > Paste the API keys you copied above in the appropriate box
- Hit Import and wait for Koinly to sync your data. This can take a few minutes
- Review your transactions on the Transactions page to ensure everything is tagged correctly and no missing data
- Go to the Tax Reports page to view your tax liability!
- If you have enabled Futures on your account then you may receive emails and SMS messages when Koinly is syncing your transactions
- Convert trades are only imported starting from 2021
- Dust conversions are only imported for the last 1 year
- Commission rebates are not provided by the API
- Earn bonuses/penalties are missing and need to be added manually
- Bot trades and NFT trades are not provided by the API
- Because of Binance limitations, the API can take up to an hour to fully sync
- Head over to our help center
- Hit up our discussion boards - we might have already answered your question
- Ask us on social media - we're on Twitter and Reddit
- Contact us on email or live chat
- Got a feature request? Give us feedback on Canny
If you're using Binance US, your steps will be slightly different. See our full guide on how to get your Binance US tax forms.
How are Binance transactions taxed?
Tax varies depending on where you live, so make sure to check out our crypto tax guides for more information in your country. This said, generally speaking, two taxes may apply to your Binance transactions:
Capital Gains Tax: When you dispose of a capital asset (like crypto) on Binance and make a gain, Capital Gains Tax may apply. Disposals of crypto include selling, swapping, spending, and sometimes gifting crypto, depending on where you live. This generally also applies to other investments like gains from margin trades, futures, and derivatives.
Income Tax: When you earn new coins or tokens, Income Tax may apply. This would apply to earning new tokens, from investments such as Binance Earn.
Does Binance automatically deduct taxes?
No. Binance does not automatically deduct taxes on behalf of users. It's your responsibility to identify taxable transactions and pay any tax due from gains or income from your Binance transactions to your tax office.
What's the Binance Tax Center?
The Binance Tax Center is a free tool to help Binance users calculate and report their cryptocurrency-related tax obligations. It allows users to import their transaction history from the Binance platform, categorize activities, and generate CSV reports such as capital gains and income summaries.
The tool supports up to 100,000 transactions and includes country-specific tax rules for certain regions, although users in other jurisdictions are advised to consult local tax professionals. It can be accessed directly from a user’s Binance account under the Tax section.
However, Binance Tax Center only supports Binance transactions. So if you're using other exchanges and wallets like most investors are, it will not be able to calculate your taxes for you.
Why isn't my Binance tax report accurate?
If you've only made transactions on Binance, including buying your crypto, and you're in a supported country, for Binance Tax Center may be accurate. For most users, however, this won't be the case, and much of this comes down to cost basis.
Your cost basis is whatever it cost you to acquire your crypto, plus any allowable fees. It's the figure you subtract to calculate any gain or loss from a disposal of crypto (like a sell, swap, or spend). If you didn't buy your crypto on Binance and instead transferred it in from another wallet or exchange, Binance may not have an accurate cost basis. As such, your calculations for your capital gains and losses may be inaccurate.
This isn't an issue exclusive to Binance either. Crypto exchanges are yet to set up a means to share cost basis data between platforms so users can more easily calculate any tax due. That's why most investors opt to use dedicated crypto tax software like Koinly, as it supports 900+ exchanges, wallets, and blockchains to make importing and collating your tax data easier.
Does Binance report to tax offices?
In short, yes. The majority of tax authorities around the world, including the IRS, are taking a similar hard stance on crypto tax evasion. They're working with major exchanges operating in their country to share KYC information and ensure taxpayers are paying their fair share. As Binance is the largest crypto exchange worldwide, they have likely been contacted by multiple tax authorities to share customer information. You can learn more in our guides:
Does Binance send tax forms?
No - and for good reason. Binance serves millions of users worldwide, meaning the exchange would need to be able to generate a huge number of tax forms in order to serve all its users! However, you can use a crypto tax calculator like Koinly to get your Binance tax forms easily.
How do I get my Binance tax documents?
To include your Binance crypto investment activity in your annual tax return, you'll need to calculate and report any income or capital gains, or losses, you made throughout the year. There are two ways to do this:
Identify your taxable transactions, calculate your net capital gain or loss, and determine the fair market value of any crypto income.
Use a crypto tax calculator like Koinly to do it for you.
Koinly works by importing your Binance transaction data to analyze what's taxable and what's not. Let's look at an example - here are some transactions in a Binance account.
You can import your Binance transaction history via API integration or by uploading CSV files of your Binance transaction history. Once you've done this, you'll be able to see your Binance transactions in Koinly - like this.
Once your Binance transaction history is imported, Koinly will:
Identify your taxable transactions
Categorize your transactions into the subsequent tax treatment depending on your location settings
Calculate your gains and losses (including your unrealised gains and losses)
Identify the fair market value of any income in your fiat currency on the day you received it
Generate your tax report, ready to download and use to file with your tax office
Optimize your Binance taxes
Experienced investors don't wait until the tax deadline to figure out their tax liability. They use a tool like Koinly to help them identify unrealised losses ahead of the end of the financial year, so they can harvest these losses and offset them against their gains to reduce their overall tax liability.
Koinly offers tools to help investors save money on their taxes (depending on your location), including a tax optimization tool to help you identify losses and simulate how realising these losses would impact your tax bill, as well as an asset maturity dashboard to help you identify the best assets to sell for a lower long-term Capital Gains Tax rate.
