Need to File Fast? Follow This No-Nonsense Guide From Koinly

Need to File Fast? Follow This No-Nonsense Guide From Koinly sponsored

Left your crypto taxes until the last second? Here’s how to get your crypto taxes done by April 18 with the least amount of friction possible.

The IRS has been really clear that cryptocurrency is definitely taxed– and that they’re able to track crypto investments through various channels. In brief, crypto is subject to Capital Gains Tax and sometimes Income Tax. You’ll pay long-term Capital Gains Tax between 0% to 20% or you’ll pay short-term Capital Gains Tax or Income Tax between 10% to 37%, depending on your Income Tax bracket.

Let’s just cut to the chase with what you need to do to report your crypto tax by April 18. Get a comprehensive view of all your crypto dealings, from every exchange – and the very beginning of your trading journey. Aggregate your complete trading history into a single chronological record – and in US dollar terms. Identify your capital gains and separate the total into long-term and short term gains. Identify your income from crypto. You can file once you know your totals. File with your accountant or use tax apps like TurboTax and TaxAct. Aggregate your transactions with Koinly

If you’re an active investor using multiple wallets, exchanges and blockchains, getting your complete crypto transaction history together is no quick job.

To do so manually, you’d have to download CSV files from every exchange, wallet and blockchain you use. Then you’d need to identify your transfers from your taxable transactions, identify which kind of tax you’d need to apply for each taxable transaction and calculate your subsequent capital gains or losses, as well as the fair market value of any crypto income.

Koinlymakes it easy to aggregate your transaction history. Koinly has been supporting crypto investors with a fully IRS-compliant tax reporting system since day 1, so if you’re looking for a solution right now – it can be as simple as jumping onto Koinly and connecting all your wallets, exchanges and blockchains. Koinly supports more than 650 exchanges, wallets and blockchains – all you need to do is connect via API or by importing a CSV file of your transaction history. Let’s take a look at how.

Among Koinly’s supported exchanges are Binance, Coinbase, FTX, Kraken, and KuCoin. To automatically get your transaction data, you can use the API. Just head into your exchange and create a read-only API key – you’ll normally find this under API management or settings.

Once you’ve created your key, copy your API key and API secret and head over to Koinly. Select the exchange you want to add, then the set up auto-sync option and enter your API details and your transaction data with that exchange will be automatically imported into Koinly.

If you need assistance connecting Koinly to a specific exchange, wallet or blockchain – don’t panic, Koinly have done the digging for you. Koinly integration pages feature step by step guides on how to get connected with Koinly.

Convert crypto values into US Dollars

Once you’ve got all your exchanges, wallets and blockchains connected with Koinly, it does the complex work of converting all your crypto into fiat currency terms. It saves you hours of searching through historical crypto price data on price aggregator websites.

Koinly determines the market price of your transaction through a number of different methods. First, it’ll try to determine the market price using data available from your transaction history. For example, if you bought ETH using USD on a given day, Koinly will set this as the market price.

If you bought crypto using a different fiat currency to your base currency in Koinly, Koinly will use Forex rates for the day of your transaction to identify the market price.

Finally, for transactions that don’t involve any fiat currency – like income or crypto to crypto trades – Koinly uses market price aggregators like CoinMarketCap or CoinGecko to identify the market price for your crypto. Koinly may also fetch market rates directly from certain exchanges if you’ve used API.

After Koinly has converted everything to dollars, it can now calculate crypto taxes.

Calculate Capital Gains and Income from crypto

Koinly can help by identifying your taxable transactions from your non-taxable transactions, calculating your capital gains and losses, as well as any crypto income for you.

For capital gains – Koinly will identify each time you’ve sold, traded or spent crypto and calculate your subsequent capital gain or loss for you. It even separates out your short-term capital gains from your long-term capital gains, so you can rest easy knowing you’re not paying too much tax.

For mining, staking, and interest income – Koinly identifies the fair market value of any crypto income in USD on the day you received it. This is separated out in your crypto tax report, and even broken down into the different types of income if you need to report each separately.

When tax season rolls around, DeFi is a particular challenge for investors, but not with Koinly. Koinly supports a wide range of popular web wallets used to interact with DeFi protocols – so whether you’re providing liquidity on Uniswap or staking CAKE on PancakeSwap – Koinly can handle it all. Koinly is evolving just as quickly as the DeFi market, so we’re always adding support for new tokens and protocols.

Now that your crypto taxes have been calculated, there’s just one step left… creating an IRS-compliant report.

File your crypto taxes

Koinly has the reportyou need, no matter how you choose to file.

Filing yourself

Though it’s probably too late to file with paper forms unless you have an extension – we’ll cover it anyway.

You’ll need to report each disposal of crypto (any time you sold, traded or spent crypto) on IRS Form 8949, as well as your net capital gain and loss on Schedule D. Koinly provides this exact form, pre-filled with your transactions.

You’ll also need to report your crypto income on Schedule 1, generally under the ‘other income’ section – although if you’re self-employed this would go on Schedule C instead. Koinly can help with this too, download either the Complete Tax Report or Income Tax Report which will include all your crypto income totals in USD, ready to add to your forms.

After completing your additional forms, fill out your Form 1040 and attach your Schedule D, Form 8949 and Schedule 1 (or C) and you’re done!

Filing with an accountant

Do you have an accountant on hand? Koinly makes their job much easier!

It is possible to grant access to Koinly to your accountant. Just log into your Koinly account, go to settings, then team and invite your accountant, CPA or tax agent. They can then view your Koinly account and do your crypto taxes for you.

Filing with a tax app

Are you filing with a tax app like TurboTax or TaxAct? Koinly can also generate reports for these apps.

For TurboTax, just download the TurboTax Online or Desktop Report from Koinly (depending on the version of TurboTax you’re using) and then upload this to TurboTax when you’re filing your investments and savings. If you’ve got income, add the total income figure from your Koinly Complete Tax Report (or Income Tax Report) as miscellaneous income.

For TaxAct, you’ll download your Form 8949 and Schedule D from Koinly (as well as your Complete Tax Report or Income Tax Report if you have any crypto income). You can upload this to TaxAct when filing your capital gains, and you can report any crypto income as other income in TaxAct.

If you’re racing to get your taxes done,sign up to Koinlytoday!

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