Tax Season
Tax season is upon us and the new federal tax deadline is May 17. It’s an extremely busy time for everyone in the cryptocurrency industry right now but one of the most common questions I am getting right now is how are folks doing their crypto taxes?
With DeFi summer happening last year, many people made quite a bit of money yield farming and thus tax platforms have to be able to ingest ethereum addresses and integrate with these different decentralized finance protocols. First helpful tip is that you should link not only your ethereum addresses but all of your past centralized exchange accounts so that your cost-basis becomes more accurate.
I’ve used three different crypto tax software providers in the past and figured I’d share some quick thoughts on each, in no particular order, in case it’s helpful:
The company just raised a massive $100m fundraising round so they should be well-capitalized
User interface is a bit more old-school enterprise and the load times are laggy
The tool itself seems to do a fairly good job on tracking though you’ll probably still need to go through your past transactions and verify cost-basis
The portfolio view nor tax optimizer were helpful to me
Great responsive customer service
Pricing ranges from $50/year to $500/year based on number of transactions
The company came out of Y Combinator and raised a small $1.5m seed round a few years ago
User interface is very sleek and silicon-valley, probably the best of the three tools
The dashboard is quite comprehensive and the portfolio section gives you deeper analytics on your positions, both similar to popular DeFi tools like Zapper and Zerion, standing out from the competition which are mostly just tax tools
The tax tool was the most inaccurate of the three but customer service was solid
Tax plans range from $0 to $399/year based on number of transactions and you can subscribed to a portfolio assistant to help you manage your portfolio and do tax loss harvesting for $99/month
The company is bootstrapped and has not raised any funds
The user interface is probably right in between the other two products and down the fairway
The tax tool was about on par with TaxBit in terms of accuracy, maybe a tad bit more accurate
Tax plans range from $65/year to $799/year with the VIP service costing $2,500/year and includes advanced reconciliation
- Paul V
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LETS MEET UP
Bitcoin 2021, Miami, June 4-5
ABOUT ME
Hi, I’m Paul Veradittakit, a Partner at Pantera Capital, one of the oldest and largest institutional investors focused on investing in blockchain companies and cryptocurrencies. I’ve been in the industry since 2014, and the firm invests in equity, early stage token projects, and liquid cryptocurrencies on exchanges. I focus on early-stage investments and share my thoughts on what’s going on in the industry in this weekly newsletter.