Lost in the wide world of crypto tax? Crypto is taxed around the world but navigating the rules is not always easy. Especially when things get tricky, leaving many investors wondering whether they should DIY-it or bring out the big guns in the form of a crypto accountant. If you're asking yourself, "do I need a crypto accountant?", we've got the answers.
When tax filing can already cost a chunk of change, it can be tempting to cut corners by filing your tax yourself. Especially when there's great tax calculators out there (like Koinly!) to help you calculate your tax liability and generate your crypto tax reports. For most crypto investors, the use of a good cryptocurrency tax tool is all they need. But if you find yourself in more complex waters, a crypto tax accountant is worth looking into.
We're all about making your crypto taxes as easy as possible - which is why Koinly has a dedicated directory of crypto accountants from around the world to pick from. Just head over to our directory of crypto accountants and find the right one for you.
It really depends on your crypto trading activity. If you've made massive gains, crossed the invisible line between investor and trader, been called up for an audit (yikes!), or invested in more of the cryptic cryptocurrency projects, then yes. The more complex your story, the more you'll need a crypto accountant, or crypto CPA even. As with anything, when the financial - and legal - stakes are high, it's time to call in the experts.
If however, your investing and trading activity is more low key - even if still at high volume - the combination of a good accountant and crypto tax software will get the job done.
Whether you're in need of a crypto tax expert, or just a good accountant with the tools of the trade, you may want to hire a tax accountant to handle it all for you. From working out your crypto tax liability to filing your final income tax return.
Your accountant may do the sums via statements, spreadsheets, and transaction reports that you supply them, or they make make use of a crypto tax calculator themselves. Koinly is a good tool for this in the sense that crypto investors can set up their profile - with all their crypto trades imported into a single dashboard - and invite their accountant to view their data with from an email invite.
There is also the chance that you need a crypto tax expert for only part of the job. Whether you've spent the hours upon hours to work out your crypto taxes, or skipped ahead with crypto tax software, you may want to share your final calculations with your accountant to sense check the numbers, and file on your behalf. Again, using a tool like Koinly can help you and your accountant get your taxes done faster, together.
Any time you're thinking about crypto taxes, remember that you need to keep a record of all your crypto transactions, including when and for how much you bought and sold each asset, and what their dollar worth was at the time. For crypto investors who trade at volume, this in itself is a lot of work. Let alone then identifying and calculating the different types of taxes for each transaction.
This is why using crypto tax software like Koinly is a much easier option when it comes to crypto taxes. Create an account and simply connect all your crypto exchanges and wallets to Koinly. Koinly does the maths and conversions and works out exactly what you've made in terms of short and long term gains, as well as income from crypto. Koinly then offers several reports that provide various levels of information, tailored to different countries.
If you're a crypto traders who wants to DIY a healthy chunk of the job, you can get to the report stage using Koinly and then share their report with your accountant. It will make their job a whole lot easier - even if they don't have years of crypto tax experience to back them up.
Any time you can lessen the admin burden for yourself, and your accountant, you're saving time and money.
Koinly offers a really cool feature that connects your accountant to your crypto tax report directly - without having to download it, email it or explain it. All you'd have to do is invite your accountant to view your dashboard, via a share link. Once they're in, they can then do a thorough check of your numbers, and potentially advise you on some tax-saving measures, like selling off badly performing crypto to offset a large capital gain.
If there's ever been a benefit to connecting your accountant to your complete crypto portfolio, it's to give them time to find ways to reduce your tax bill.
You can get some ideas on what to ask them here, in our guide on how to pay less tax on crypto - legally.