The number of cryptocurrency traders and investors is increasing around the world and it’s no different in Canada.
As cryptocurrencies continue to grow in value and popularity, it’s important for Canadians to keep track of their transactions, understand their tax implications and file taxes on their crypto gains and losses.
Thankfully, you don’t have to do it manually. There are several crypto tax software and calculators available that can help you with your crypto tax filing and save you some time.
Cryptocurrency tax software can be a big help to you if you are confused about how to go about the taxation of your crypto related transactions. But with so much cryptocurrency tax software out there, it can be different to choose the best one.
In this article, we’ll cover some of the best crypto tax software for Canadians that are perfect for keeping track of your cryptocurrency portfolio and ensuring that your capital gains taxes are calculated correctly.
What is a Crypto Tax Software?
A cryptocurrency tax software is a tool that provides individuals and businesses with an easy way of calculating their crypto-related taxes owed in accordance with the Canada Revenue Agency (CRA) guidelines.
Cryptocurrency tax software programs can assist taxpayers in accounting for the trading income and/or capital gains of their portfolio, transfer the data to tax software and then report them to the CRA.
The best crypto tax software can help you calculate your capital gains or losses for both your taxable trading activity and for your non-taxable transactions.
These software programs import transaction data from cryptocurrency exchanges, crypto wallets, and crypto payment processors.
The data is then used to calculate the cost basis of your coins and adjusted for sales, exchanges and other transactions that impact your cost basis for tax purposes. The process is all automated, helping you to save time, money, and avoid costly mistakes.
Why Use Cryptocurrency Tax Software?
Now you may be asking yourself: why should I use cryptocurrency tax software? It is essential to understand the importance of using these software tools and why they are worth investing in.
Below we will go over some reasons why you need a crypto tax software.
Saves Time and Stress
If you have many trades, manually keeping track of each one can be difficult. Tax software makes it easy, quick and less error-prone to keep track of all your transactions. This will help save time and stress during the tax-filing season.
Crypto tax software allows you to connect your exchanges and wallets, and import your transactions. It then generates a variety of crypto reports that make it easier for you to file your taxes without stress.
Helps Avoid Penalties
If the CRA determines that you did not report gains or have a taxable income, there is a chance that you could face penalties, depending on your situation.
However, using cryptocurrency tax software will help ensure that you follow existing guidelines and avoid penalties as much as possible.
Your cryptocurrency transactions may be complex and difficult to track without specialized cryptocurrency tax software.
The result could be inaccurate reporting that leads to trouble with the CRA. Using cryptocurrency tax software means that your records will likely be more accurate than they would otherwise be, which leads to a more accurate tax filing.
5 Best Crypto Tax Software For Canadians
There are several cryptocurrency tax software options available for Canadians. Some of them are paid while some are completely free.
So, let’s check out the best crypto tax software for Canadians:
Koinly is an online service that helps you calculate your crypto taxes using data from exchanges, wallets, and transactions. It offers a free plan that allows users to create tax reports.
The Koinly platform allows you to connect with popular exchanges and import your trading data directly. It then generates a tax report that can be uploaded to the tax software (e.g. Wealthsimple Crypto) you’re using to file your income tax returns with the CRA.
Koinly is easy to use. You don’t need to be a blockchain expert to use this software, as it offers automated data import and syncs with more than 300 exchanges and wallets.
This means you can connect your accounts to Koinly using an API key or CSV files and Koinly will automatically import your transactions and holdings into one place.
If you have trouble importing or uploading your data into Koinly, their customer support team is always available to help you out.
Koinly Key Features
- It supports transactions from over 300 exchanges, wallets, and other digital platforms.
- All your capital gains and losses are automatically tracked with Koinly, so you never have to worry about losing any records or manually tracking your profits/losses again.
- The platform utilizes AI technology to help users avoid paying more in taxes than they legally owe.
- A proprietary algorithm that looks at your entire trading history and suggests strategies for optimizing future tax returns.
- Supports 350+ exchanges, 50+ wallets and more than 6,000 cryptocurrencies
- Koinly offers a powerful portfolio tracker that works in real-time! The tracker keeps track of your buy & sell transactions as well as any transfers between wallets and automatically calculates how much profit/loss you made.
Koinly has a free plan that you can use for unlimited returns but with limited features and support. Also, you’ll not be able to export your data to other tax software on the free plan.
You don’t even need to enter your credit card details to get started. However, you need to upgrade to a paid plan if you want to download your tax report and import to a tax software like TurboTax, H&R Block and more.
Koinly paid plans range from $49/year for newbies to $279/year for pro traders.
Learn more: Koinly Review
2. Wealthsimple Tax
Wealthsimple Tax is a software tool that helps you file your crypto tax return faster. It maximizes your refund and finds every deduction you’re eligible for.
Unlike the other crypto tax software on this list, Wealthsimple Tax is a full-fledged tax filing software for Canadians. Even if you don’t have crypto gains or losses to declare, you can use the software to file your annual returns to CRA.
For 2021 tax filing, Wealthsimple Tax has improved its platform to allow easy import of your crypto transactions from more than 300 crypto exchanges and wallets. The feature is powered by Koinly. It’ll then automatically calculate your capital gains or losses.
With smart tools to help you find every deduction, you can be sure of getting the maximum refund possible with the tax software. Wealthsimple Tax knows tax time can be stressful, which is why they do everything they can to make it as easy as possible.
It guides you through the entire process with step-by-step instructions and all the information you need to make filing your taxes a breeze.
Wealthsimple Tax is for everyone, whether it’s your first time filing taxes or you have an unusual situation. And if you have any questions or need help navigating the process, Wealthsimple Tax has tax experts waiting to help.
Wealthsimple Tax Key Features
- Wealthsimple Tax automatically calculates the credits and deductions you qualify for.
- Wealthsimple Tax automatically imports all of your income tax info and investment details from CRA and Revenu Québec.
- It enables you to connect numerous crypto wallets from different exchanges and automatically compute capital gains or losses.
- Files your completed returns with CRA.
Wealthsimple Tax Pricing
Wealthsimple Tax is free for Canadian tax filers. You can file a basic return for free. No catches, no gimmicks, and no hidden fees.
It doesn’t charge you a percentage of your tax refund or asks you to pay based on the complexity of your return.
For crypto taxes, Wealthsimple Tax is completely free if you had less than 500 transactions. If you have more transactions, you’ll receive a prompt to sign-up with Koinly and see how much you’ll need to pay.
Coinpanda is a cryptocurrency tax software that helps you to calculate your crypto taxes due to help you easily file your tax reports.
It supports all major exchanges, wallets, and blockchains. The platform is super user-friendly and does all the hard work for you.
With Coinpanda, you can calculate your capital gains and income from all exchanges in minutes, even if you have thousands of transactions.
It offers different plans to suit all needs and budgets, ranging from a free plan to an enterprise plan.
The free plan includes most of the features you need to calculate your capital gains but supports a limited number of transactions. You can easily upgrade your subscription at any point if you want to unlock more advanced features.
Coinpanda Key Features
- Auto-sync with all exchanges, wallets, & DeFi protocols
- It supports over 18,000 cryptocurrencies
- Coinpanda automatically imports all transactions with no manual entry required.
- Accurate calculations based on the first-in-first-out (FIFO) method.
- Coinpanda generates tax reports with all the information you need to file your taxes
Coinpanda offers a free plan but it is limited to just 25 tax transactions. It has the following paid plans:
- Hodler: $49 per year
- Trader: $99 per year
- Pro: $189 per year
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CoinTracker is one of the most popular crypto tax calculators on the market. It assists users in calculating the tax liability on profits made in the crypto market by keeping track of all activities.
It offers a simple, intuitive, and easy-to-use interface, which makes it easy to navigate through a large number of transactions and make sense of the data presented in your tax forms.
The service automatically imports your crypto transactions from over 300 exchanges and wallets, and it also supports over 10,000 coins.
CoinTracker is suitable for those who are looking to make their life easier by using a dedicated tool to help with their crypto tax reporting. It will also appeal to those who trade frequently and would like to use the service as an extension of their portfolio tracker.
With CoinTracker, you will be able to keep track of your capital gains and losses while filing taxes. It also has a neat way of telling you how much capital gain could have been deferred if the cost basis was adjusted by donating a crypto coin.
CoinTracker Key Features:
- Automatically calculates estimated taxes owed on crypto transactions.
- Compatible with over 300 major exchanges, wallets, and blockchains.
- CoinTracker provides the ability to view your overall portfolio on a dashboard
- Through CoinTracker, you can also get information on your portfolio’s performance, profit/loss reports, and gain/loss analysis.
CoinTracker offers a free basic plan that allows over 20 transactions. In addition to providing a free service, CoinTracker also offers three paid plans. The three plans are as follows:
- Hobbyist: Begins at $59 per year
- Premium: Starts at $199 per year
- Unlimited: This plan’s price is customized according to individual needs. It also offers unlimited transactions per year
TaxBit is a tax software platform that allows cryptocurrency users to calculate and file their taxes at the push of a button.
The platform supports all major exchanges, such as Binance, Coinbase. TaxBit makes filing your crypto taxes easy and gives you peace of mind by eliminating the stress of wondering whether you filed correctly.
By using TaxBit, you can be sure that no mistakes have been made and that all your bases have been covered.
You can import your transaction history from an exchange or wallet. TaxBit analyzes your data and determines which transactions are taxable.
TaxBit calculates the amount of gains or losses that occurred during the year and applies them to your tax forms.
With TaxBit APIs you can easily import transactions with a cost basis, or automatically sync transactions and get a full tax report.
TaxBit Key Features
- TaxBit automatically calculates your capital gains based on data that it imports from different exchanges and wallets across the globe.
- The software is easy to use, with a simple interface that makes it easy for anyone to access their data and generate the necessary documents.
- TaxBit uses a variety of tools to gather data, calculate cost basis, and generate the necessary tax forms needed for filing.
- TaxBit helps you accurately report crypto income on your taxes because it follows all IRS guidelines for crypto.
TaxBit offers three different plans depending on what you need: Basic, Plus, or Pro. All three plans include free trials.
The following is the pricing for the three plans:
- Basic: $50. It supports up to 250 taxable transactions per year
- Plus: $175. Supports up to 2,500 taxable transactions per year
- Pro: $500. It supports up to 25,000 taxable transactions per year
CryptoTaxCalculator is a software solution that simplifies the tax filing process for crypto investors. It automatically calculates the cost basis of your crypto holdings for all your trades so that you don’t have to worry about this.
It can generate a full tax report in just seconds after linking to your exchange accounts or uploading a CSV file of your transactions. This tool integrates with many popular exchanges, such as Binance, Coinbase and more.
These integrations help CryptoTaxCalculator generate highly detailed and accurate tax reports using your trading data.
The tool also takes into consideration all types of transactions that can have tax effects, such as ICO participation rewards, and DeFi staking.
CryptoTaxCalculator Key Features
- CryptoTaxCalculator automatically imports transactions from all the leading exchanges, so you can simply select the coins and dates you want to calculate your gains for.
- It provides a full trade-by-trade breakdown for every calculation.
- CryptoTaxCalculator exports your capital gains calculations in a format suitable for inclusion in your tax return.
- It supports several countries.
CryptoTaxCalculator offers a free trial for all of its plans, so you can test it out, see its tax reports in action, and make sure you’re satisfied with how it works before upgrading.
CryptoTaxCalculator’s free trial is available for 30 days from the time you sign up.
After the free trial expires, you will need to upgrade to a paid plan to export your tax reports or continue using CryptoTaxCalculator.
CryptoTaxCalculator’s paid plans are as follows:
Hobbyist: $99 per year
Investor: $249 a year
Trader: $499 a year
CoinTracking is another popular crypto tracking and tax preparation tool. It offers investors of digital currencies a useful portfolio monitoring tool that tracks the prices of more than 22,000 cryptocurrencies.
It tracks all your transactions and calculates your Profit/Loss automatically so you can determine whether you are making a profit or loss with your trades.
In addition, CoinTracking provides an easy, secure, and accurate way to track your cryptocurrency trades and prepare a report to help with your tax reporting.
It works with several of the top crypto exchanges, platforms and wallets to automatically import your transactions.
Cointracking Key Features
- CoinTracking provides a time-saving and useful service that creates a tax report for the traded cryptocurrencies, assets, and tokens.
- It tracks the profits and losses in your coins. The data can be viewed, printed, or exported anytime.
- Cointracking allows importing data from over 110 crypto exchanges and platforms, including popular ones such as Binance, BlockFi and Coinbase.
- It analyzes your trades and generates real-time reports on profit and loss, the value of your coins, realized and unrealized gains, reports for taxes, and much more.
Cointracking offers a free trial of up to 200 transactions. It also has paid plans as follows:
- Pro: $12.99 per month
- Expert: $19.99 per month
- Unlimited: $69.99 per month
What to Look for When Choosing Crypto Tax Software
When choosing crypto tax software, take a look at the features each provider offers and think about which one fits your situation.
Here are some features you may want to look for when narrowing down your selection:
1. Cost of the Software
Some online crypto tax software offer free plans while others offer different subscription-based pricing tiers.
If you only have a few crypto transactions and plan to use the software once a year, it may not make sense to pay for a subscription.
On the other hand, if you’re a serious crypto trader or investor with hundreds to thousands of transactions, then you may find value in paying for premium software that provides more functionality and support.
2. Ease of Use
You should also look at how easy it is to use the software you choose.
The best crypto tax software has an intuitive interface with clear directions on how to upload your cryptocurrency transaction logs and generate reports from them.
Choose a crypto tax software that can help you quickly generate your crypto tax reports without stress.
As with any financial software, security is paramount when it comes to crypto tax software.
Look for software that leverages encryption, two-factor authentication (2FA), and makes use of a secure HTTPS connection.
You should also look for a company that has been around for a while with excellent customer service.
4. Importing Transactions
Some crypto tax software allows users to import transaction data from exchanges, wallets, or other sources via CSV files instead of entering everything manually, which is time-consuming and error-prone.
If you want to avoid errors and save time, choose a crypto tax software with flexible importing options.
5. Compatibility with Exchanges
Does the platform support all the exchanges where you trade? You’ll want a crypto tax software that supports the exchanges you use in trading.
FAQs on the Best Crypto Tax Software for Canadians
If you don’t record taxable crypto transactions and are audited by the CRA, you might face fines, interest, and possibly criminal prosecution.
Gains on sales and other taxable crypto transactions are taxed in the year of the transactions at the taxpayer’s normal tax rate, much like earned income. The gains will be classified as either capital gains or business income, with varying tax treatments.
Like other capital gains in Canada. 50% of your crypto gains will be taxable and added to your income for the year and taxed at your marginal tax rate.
A Form T1135 must be filed with the Canada Revenue Agency (CRA) by Canadian residents whose total cryptocurrency investment exceeds $100,000. You’ll also need to use the appropriate tax forms to file your capital gains (T5008) or business income.
Final Thoughts on the Best Crypto Tax Software for Canadians
To comply with the Canadian Revenue Agency (CRA) tax requirements, you need to be up to date with your crypto tax return.
Above are five crypto tax software that we believe will help you out greatly in filing your crypto taxes. Each software has a different price point and capabilities.
But when narrowing the best option, use the above tips as a checklist.
Whichever one of the crypto tax calculators you go with, ensure that the product reflects your needs and that it will be able to meet your expectations.
Below are some related articles for more information on filing your crypto taxes in Canada.