Emily Clarke

3 Reasons You Should Use a Crypto Tax Software

Whether you're new to crypto or a seasoned investor with hundreds of thousands of dollars tied up, you can't avoid taxes. Cryptocurrency is decentralized, but the IRS classifies it as property. Therefore, it's subject to federal taxes just like any other investment you make.

Keeping track of all your investments can be a massive undertaking. Virtual currency changes at the drop of the hat, forcing investors to become more active than they often would with traditional stocks. Thankfully, the best tax software for crypto is available to make your life easier at tax time. If you don't already use tax software, here are a few reasons why you should.

Stay Compliant with Current Tax Rules

Cryptocurrency is still relatively new. While the tax rules are similar to other assets you invest in, things change quickly with virtual currencies. There are more than 20,000 coins, each with unique values.

Keeping track of all your transactions to view losses and gains can be a nightmare. Tax software simplifies that process and creates forms in minutes. Generate every document you need to file your taxes board accurately. Avoid the headache and let technology take care of the heavy lifting.

Connect to Multiple Wallets and Exchanges

The best tax software for crypto will give you as much flexibility as you need. Managing a large portfolio can be challenging. You might have several wallets and work with more than one exchange to make investments.

Well-designed software will connect to everything you use, creating a centralized place to view information and generate tax documents.

Track Your Portfolio

Finally, tax software is an excellent tool for monitoring your entire portfolio. Use the software to organize your trades, view transaction history and gain more insight into your performance as an investor. Some of the best platforms even use cost basis accounting methods, allowing you to tax-loss harvest. This feature alone could save you thousands and make you a much better trader.

Tax software is a must for crypto, no matter how much you invest. It can help you throughout the tax year, keep you informed about the performance of your portfolio and make tax prep a breeze.

Author Resource:-

Emily Clarke writes about portfolio management, finance tracking and Consumer SaaS services. You can find her thoughts at crypto tax software blog.