Crypto Portfolio Trackers Can Help You Avoid Tax Trouble. Here Are Some of the Best

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If crypto is giving you new headaches this tax season, a portfolio tracker could help you start planning now for a better experience next year.

With crypto’s rapid rise in adoption over the past year, regulators are taking it more seriously than before, with the IRS even asking Americans to go on record with regard to their crypto activity for the first time.

“The IRS may not have the ideal infrastructure set up yet to track and evaluate crypto transactions,” says Kate Waltman, a certified public accountant who specializes in cryptocurrency. “But what I can tell you is that it’s a focus area.”

If you bought or sold Bitcoin, Ethereum, or other types of crypto last year, you must report the profits as taxable income. To make things easier, tech companies have developed new apps and software that can track what’s inside your digital wallets. Meanwhile, crypto exchanges like Coinbase have added new integrations that can help users report accurate holdings

Here’s a look at what crypto portfolio trackers are, along with information to help you decide if one makes sense to start using.

What Are Crypto Portfolio Trackers?

Crypto portfolio trackers are third-party tools that link to your crypto wallets and provide a big-picture view of your crypto holdings. Rather than keeping track of every transaction manually, users can sync their crypto portfolio to their portfolio tracker and pull all of the data holistically, including total gains and/or losses for the respective tax year.

CoinTracker, ZenLedger, and Koinly are a few popular third-party tools that crypto investors might consider, says Waltman.

For both crypto newcomers and seasoned traders, knowing your tax position before you file is critically important to accurately paying taxes on potential capital gains — or reporting losses. That’s especially important this year, given that 55% percent of Bitcoin investors reportedly started investing in 2021, according to a study by crypto firm Grayscale Investments.

How Do Crypto Portfolio Trackers Work?

Each app works differently, but the best crypto portfolio trackers monitor price changes of your crypto assets, show you the total value of your portfolio, and pinpoint prices each time you make a transaction. 

Depending on which one you choose, the tracker might offer different features and integrations. For example, a tracker might sync your transactions across multiple crypto networks and blockchains, meaning it could capture more crypto exchanges than apps that focus on only one blockchain at a time. It may also sync with popular exchanges (Gemini, for instance) and multiple types of crypto wallets to get a big-picture snapshot of your crypto activity.

Just like with individual stocks or selling physical assets, crypto investors should expect to pay capital gains taxes when they profit from the sale of virtual currency. What makes crypto different is the lack of consistent reporting by exchanges to the IRS — though there have been signs over the past year that more rules could help clarify this in the future.

One thing that’s clear is the more trading activity you have, the more complicated the tax reporting can be, especially if you’re tracking your activity manually. Portfolio trackers can help investors keep accurate records that will ensure you’re paying the right tax rate based on your activity.

“If you had [your crypto] for less than a year, you would have a short-term gain and you would be taxed at your regular ordinary tax rate,” explains Lisa Greene-Lewis, a certified public accountant and TurboTax tax expert. “If you had it longer than a year, then you pay long-term capital gains tax rates, which are more beneficial for most people.”

How Do I Track My Crypto Portfolio in 2022?

Experts say the best crypto tax programs integrate across multiple wallets, exchanges, and/or blockchains — plus they are compatible with regular tax programs like TurboTax or TaxAct.

Waltman and other tax experts we’ve spoken to recommend CoinTracker for its tools and integrations. When in doubt, speak to a certified public accountant who specializes in crypto taxes. 

While experts say accounting for crypto in your tax return is easy for those who simply traded crypto on online exchanges, you may want to consult an expert if you mined crypto or engaged in decentralized finance trading (including staking, pooling, and/or lending your crypto). 

Not sure where to start? Read over NextAdvisor’s crypto tax guide.

What Are the Best Crypto Portfolio Trackers?

Crypto is a burgeoning industry, and there’s a multitude of new products for tracking your holdings and transactions. You’ll want to consider the cost, user ratings, wallet integrations, and cross-blockchain capabilities when deciding which crypto portfolio tracker is best for you.

Pro Tip

Compare the differences between free plans thoroughly before opting to pay for a crypto portfolio tracking service. Some free options offer robust IRS reporting. Others let you track a large number of transactions, but skip out on necessary forms.

Some trackers might charge for more trades, so you’ll want to factor that into your overall tax prep cost. And either way, it doesn’t hurt to work with your accountant and go over everything. “You can take advantage of third-party calculation tools to upload your wallet data and try to determine what the capital gain-loss is for you,” says Waltman. “It’s always good to look at your data line by line and do a thorough check. Make sure you agree with it — even if you do use a third-party service provider to make the calculation.”

In general, experts recommend sticking with crypto companies and platforms that are more established and with larger user bases, rather than smaller, niche service providers. That can be a good indication that the service offered will deliver for investors. Also keep in mind that many crypto companies are start-ups, so their product offerings and prices may change with the rapid growth of the crypto industry.

With all this in mind, here are five of the best options crypto investors might consider. This list isn’t exhaustive, but it can help you start thinking about what to prepare for when you report your crypto holdings for 2021. Each tracker offers different options, so you can consider what’s important to you. 

CoinTracker

CoinTracker is highly recommended by experts, and offers the ability to sync well with IRS forms, as well as TurboTax and TaxAct. But you do have to pay for more advanced features.

Cost:

  • $0 for up to 25 transactions
  • $199 for 1,000 transactions
  • Custom pricing for unlimited transactions

Pros

  • Ability to export your transactions into a CSV spreadsheet

  • Offers tax forms, exporting to tax prep software, and tax-advisor referral (additional fees apply)

  • Calculates cost basis & capital gains

  • Forum support included with the free version

  • 30-day money back guarantee

Cons

  • No individual tax summaries by wallet with the free version (starts at $179 and up)

  • Must pay more for email or concierge support

TokenTax

While TokenTax offers no free version, it does feature live chat support and unlimited tax form revisions. The premium plan ($199) and higher-tier plans also offer a comprehensive tax-loss harvesting dashboard, which lets you see unrealized losses that you could sell to offset your gains — thereby avoiding costly surprise bills. 

Cost:

  • Starts at $65 for up to 500 transactions
  • $199 for up to $5,000 transactions
  • $799 for up to 20,000 transactions
  • $3,500 for VIP customized support

Pros

  • Auto-fill IRS Form 8949 or International Report

  • Live chat support

  • Unlimited tax form revisions

  • 10% discount when you purchase multiple years

Cons

  • No free plans

  • The basic plan only covers Coinbase and Coinbase Pro APIs

  • No DeFi and NFT integrations with the basic plan

CoinLedger (rebranding from CryptoTrader.Tax)

With CoinLedger, you can sync unlimited exchanges and see profit and loss calculations, but the system offers no free plan.

Cost:

  • $49 for up to 100 trades
  • $99 for up to 1,500 trades
  • $199 for up to 5,000 trades
  • $299 for unlimited trades

Pros

  • 14-day money back guarantee

  • Can sync unlimited exchanges

  • DeFi support included in basic plan

  • Calculates Profit & Loss

  • Includes six tax forms: IRS Form 8949, Income Report, Capital Gains Report, End of Year Positions, Audit Trail Report, and Tax Loss Harvesting

Cons

  • No free plan

ZenLedger

Though NFT support starts with the $149 plan, ZenLedger can integrate with TurboTax and analyze your current holdings.

Cost:

  • $0 for up to 25 transactions
  • $49 for up to 100 transactions
  • $149 for up to 5,000 transactions
  • $399 for unlimited transactions

Pros

  • Analyze your current portfolio performance and holdings

  • Monitor real-time pricing

  • Unlimited exchanges included in free plan

  • Includes support for crypto income, donations, ICO purchases and donations

  • Includes tax-loss harvesting, third-party crypto tax advisor referrals (additional fees apply), and full tax report preparation option (additional fees apply)

Cons

  • DeFi and NFT support not included in free or $49 plan

Koinly

Koinly warns you if your balance becomes negative, and provides CSV spreadsheets of your trades. But you’ll need the $49 plan for most features.

Cost:

  • $0 for up to 10,000 transactions (limited tax reports, however)
  • $49 for 100 transactions
  • $99 for 1,000 transactions
  • $179 for 3,000 transactions
  • $279 for 10,000+ transactions

Pros

  • Import/export trades as CSV spreadsheets

  • 6,000+ cryptos supported

  • 6+ years of historical spot prices

  • Negative balance warnings

  • Additional tax and reporting features for paid plans

Cons

  • You basically need to buy the $49 plan to access most necessary tax solutions

  • Email support only included in $179 plan

Learn More: Here Are 6 Questions You Might Want to Ask Your Tax Pro