5 Tips to Prep Crypto Taxes
Get ahead of the tax deadline crunch with our five crypto tax prep tips that can help save you time and money in 2025.
Tax season is coming up fast. Wherever you are in the world, deadlines are around the corner.
We know taxes can feel overwhelming, especially when you’ve been trading crypto. But trust us, waiting until the last minute only makes it worse. Preparing early will save you stress and also help you optimize your returns. Here are our 5 top tips to make your crypto tax return as pain-free as possible.
1. Understand your reporting requirements
Prepping your crypto taxes starts with understanding when and what you need to report to your tax office. Each tax office has a different take on the amount of information they want reported, while tax offices like Canada's CRA or Australia's ATO are relatively relaxed in their reporting requirements and only want the top-level info on your gains and income, others like the IRS, want detailed records of every single taxable transaction you've made.
You can learn everything you need to know about your tax office's reporting requirements in our crypto tax guides.
2. Get your data sorted
The amount of work involved in getting all the data you need from the wallets, exchanges, and blockchains you use very much depends on the platforms you're using and the transactions you've made.
For many exchanges, you'll be able to import your data via API using a crypto tax tool. But it's important to understand that some of these APIs have limitations on the amount of data it'll return, meaning in some instances, data returned via an API may be incomplete.
Don't panic, this just means you'll need to import data using CSV files instead. The vast majority of exchanges have a simple export option. However, there are many exchanges that have limits on the number of CSVs you can generate within a given time period, which is why it's super important you start collecting the data you need now, so you're not left unable to export all of your data last second.
Meanwhile, for transaction data from wallets and blockchains, it's generally as simple as connecting to crypto tax software via API using your wallet address. This brings us to our next point - you need to review your data.
3. Import and review
Crypto tax calculators like Koinly are smart, but they can only work with the data they're supplied. While Koinly offers automatic tagging, transaction merging, and other awesome features to make your crypto taxes simpler - you still need to review your transactions once they're imported.
Depending on the scale of transactions you have, this can take a lot of time, especially if you're a degen who's never gone through their transaction history before. If you can afford it, we always recommend getting an experienced crypto accountant to help with this step.
If you're tackling it yourself, you'll need to review your transactions. We've got loads of help guides to help you do just that:
....and many more!
4. Check your cost basis method
The relevancy of this step very much depends on where you live. In some countries, like Canada and the UK, you can only use one cost basis method. If that's the case for you, skip ahead to the next tip.
However, for other countries, like the US and Australia, investors can use multiple cost basis methods including FIFO, HIFO, and LIFO, which can have a huge impact on the taxable gains and deductible losses you have in a given financial year. A tool like Koinly lets you change your cost basis method in settings so you can see how it impacts your tax liability.
No clue what we're on about? Read our crypto cost basis method guide.
For US filers, cost basis is particularly important because the rules around cost basis tracking are due to change from 2025 as part of the new reporting requirements of Form 1099-DA. From the 2025 financial year, you must have wallet-based cost tracking on and use the Spec ID cost basis method.
Of course, you can still follow given cost basis methods - like FIFO, HIFO, and LIFO - within the Spec ID cost basis method, but your transaction records will need to specifically show that you disposed of these assets in the given order you've claimed.
5. Optimize and save money
With all your data imported and reviewed ahead of the financial year, you'll have a figure for any taxable gains, less any losses, as well as income. But you can reduce this with Koinly's tax optimization tool.
Our tax optimization tool shows you assets with unrealized losses that you can simulate harvesting to see the impact it will have on your tax liability. Learn more about crypto tax loss harvesting and how Koinly can help.
Remember, if you're tax loss harvesting, you'll need to make any transactions ahead of your country's end of financial year, for example, by December 31 for US investors.
Preparing now benefits you
Tax season is notoriously busy. With deadlines hitting in April for the US and Canada, June for Australia, and January for the UK, the dates can come around quickly. Every year, we hear from “deadline dancers”—users who wait until the eleventh hour and are left scrambling to sort out missing transactions or tax reports. This stress is completely avoidable if you start your tax prep now - and it can actually benefit you to do so.
More time to get it right: Crypto taxes can be more complicated than you think. Missing a few transactions or calculating capital gains incorrectly can lead to costly fines. Early preparation gives you time to review and fix any issues with your data.
Avoid fines for late filing: Tax authorities like the IRS, HMRC, and ATO don’t take late filings lightly. Penalties for missing deadlines can be severe. Filing early gives you peace of mind.
Nicer life, better tax: When you’re not rushing, you’ll be more accurate and feel less stressed. Plus, filing early allows you to benefit from tools like Koinly’s Tax Optimization Dashboard. This feature helps you identify ways to reduce your capital gains by selling off assets at a loss or harvesting tax-saving opportunities.
Account for busy times: During peak tax season, tax advisors, accountants, and even platforms like Koinly experience a surge in support requests. Getting ahead of the rush ensures any issues you encounter will be resolved faster and without the stress of looming deadlines.
Use Koinly for quick crypto tax prep
Strategizing, optimizing, and preparing your crypto taxes can take hours. But not with a crypto tax calculator like Koinly.
Koinly lets you adjust your settings based on your location, the crypto tax laws where you live, and your cost basis method. All you need to do is import your crypto transaction history from the wallets you use through API or CSV files. Koinly will identify the different types of transactions, calculate your income, gains, and losses (as well as unrealized gains and losses), and calculate your crypto taxes.
Then you can head to the tax reports page where you’ll find an easy-to-read tax summary, as well as specific tax reports to download for your country.
Try Koinly free today.
