A complete Koinly Review to perfectly manage your Crypto taxes. Get to know what it is, how it works, etc along with its comparisons with other crypto tax software:
What is Koinly?
Koinly is online software that enables cryptocurrency investors, traders, and accountants to easily track transactions, calculate taxes, and report their taxes by importing activity data from over 600 cryptocurrency exchanges, wallets, blockchains, and platforms.
It utilizes imported data to calculate taxes due from mining, lending, NFTs, DeFi, trading, staking, and other crypto income-generating activities for free. Finally, a paid plan generates a report that can be sent and accepted by tax agencies.
Currently, its users and customers can automatically import data from Ethereum, Polygon, BSC, and Chronos, among other Ethereum Virtual Machine-based blockchains. More blockchains are also being integrated. There is also the option to add NFT trades manually.
Table of Contents:
- Koinly Review – A Complete Guide
- Why use Koinly or Other Tax Calculating & Reporting Software
- How Koinly Works
- Koinly Features
- How Much Koinly Cost/Charge to Report Taxes
- Koinly Pros & Cons
- Comparison Table of Koinly with Other Crypto Tax Calculators and Reporting Software
- Koinly vs Cointracker
- Zenledger vs Koinly
- Koinly vs CoinLedger
- Koinly vs Other Crypto Tax Software
- Koinly FAQs
- Conclusion
Koinly Review – A Complete Guide
Koinly takes the trouble to figure out what and how much tax is due and manually calculates and reports crypto taxes. Thus crypto investors, traders, and their accountants have an easier job managing taxes and transactions.
All they need to do is to link their wallets and exchange accounts using APIs. The tool applies to people in 20+ countries although it is not a favorite for those who trade huge volumes.
This Koinly review looks at what it is, how it works and how to use it, its advantages and drawbacks, as well as how it compares with other crypto tax software. Koinly have mobile Android and iOS apps.
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Market Trends:
- Over 10 million citizens asked for more time to file taxes with the IRS (19 million or 1 in 8 persons or 12% of all taxpayers in 2021). The number differs each year.
- The penalty for not filing or missing the deadline is 5% of taxes due (up to 25%). Those late for over 60 days pay $435 or 100% of the tax shown on the return, whichever is less. Some underpayment interest may accrue.
- Taxpayers are to keep some tax payment records for up to seven years depending on circumstances. This manual paper storage can be a concern.
Expert Advice:
- Using tax filing software like Koinly can make it easier and expedite the calculation of taxes and tax refunds due and the filing of tax returns for high-volume crypto traders and corporations. They help ease the work of calculating capital gains, cost basis, and fair market value for crypto, NFT, and DeFi trades, mining, lending, airdrops, and hard forks, for whichever you may want to submit tax returns.
- Crypto tax software like Koinly allows you to manually upload or automatically pull transaction histories from your exchange/crypto services and wallet accounts, generate reports automatically, and then export them to tax apps. Koinly also allows you to invite the accountant to do the job.
- It is essential to include information from all wallets and where your transactions come and go to prevent erroneous tax calculations or records. If some of your wallets or exchange accounts in which your transactions are involved are not added to any crypto tax software and yet they contain some crypto transfers/transactions, the software may end up treating some transactions such as mere transfers from one wallet to another as sales or income yet they are not and are not taxable events. It may also generate errors.
- Before creating and linking up APIs to Koinly or other crypto tax software that do not involve trading, make sure they are read-only APIs (this will be shown when creating or after you create an API with your wallet service before synching with Koinly) so that the APIs so created are not similar to trading APIs that leave APIs capable of transferring crypto from crypto accounts, which could be harmful in case a third-party service is compromised.
- Filing taxes on time in the US can prevent tax liability from failure-to-file penalties. The failure-to-file penalty reaches a maximum of five months. You can also reach an installment agreement using the Form 9465 Installment Agreement Request or apply online for outstanding tax of less than $50,000. The latter will save you on user fees. The agreement prevents any enforcement action even though the failure-to-file, failure-to-pay penalties, and tax interest continue to accrue.
Why use Koinly or Other Tax Calculating & Reporting Software
Filing taxes with tax agencies can take time and money as you try to calculate not just the capital gains and losses from transactions but also the cost basis for each asset traded or spent, and the fair market value for the assets such as crypto on the day received as income.
The filing also requires identifying each taxable transaction and the type of tax that applies. The latter is not easy, especially for DeFi because IRS only gives basic guidance that capital gains tax is to be paid on any profit resulting from selling, trading, or spending crypto transactions.
Income Tax may also be due from mining, airdrops, and hard forks depending on the location.
The IRS report also requires reporting every single sale, trade, and spend, including the date, proceeds, and capital gain or loss (or none), which can be too much to take for those waiting until the last date of filing. An assessment of the fair market value of any crypto income is also to be made in the report.
There are obviously many pieces of software to ease calculating taxes and reporting but only a few that specialize in crypto tax reporting and Koinly is one of them.
What types of taxes can you calculate and report with Koinly?
- Capital gains tax from mining, staking, lending, forks, margin trades, normal crypto trades, DeFi, futures trading, etc.
- Tax reports that can be generated include FIFO, LIFO, Average Cost, Form 8949, and Schedule D.
How Koinly Works
How do you use Koinly to file your taxes?
Koinly calculates taxes and generates tax reports based on your crypto taxes and losses.
Step #1: Sign up on Koinly: Koinly allows signing with Google or Coinbase accounts. You can also sign up by entering your name, email, and password. From there, you can choose your country and base currency, and then choose a plan.
The account is set up as a read-only account to prevent cases of someone transferring money from the exchange and wallet accounts through the Koinly platform.
Step #2: Synching your crypto accounts and importing data from your crypto trading and transaction accounts: Koinly requires the customer to import data regarding their crypto transactions.
One way to import transactional data to Koinly is to add Ethereum blockchain-based wallets which Koinly auto syncs with. For this, you do not have to add any APIs manually.
To add a wallet/exchange/blockchain, log in and tap/click the Add Wallet tab on the top left. Choose either Exchanges/Blockchains/Wallets/services tabs.
Synching Crypto Exchanges: Go to the Exchange tab, select your exchange from the available long list of supported ones, and proceed to connect to the crypto exchange, log in to your wallet, and select Import or continue to the exchange.
Authorize the API to set it up automatically. Ethereum-based exchanges are synched automatically. Coinbase, for instance, will sync automatically without you having to manually set up the APIs.
For services like Binance US or Kraken, you will need to create an API and enter the API keys manually when synching a wallet with Koinly. A good example is all the exchanges that are not supported for automatic syncing. To do so, first, visit your wallet or service or blockchain and create API keys and secrets, then come back to Koinly.
Log in to Koinly, click on the Exchange tab, select your Exchange to sync, and enter the API keys and API secret created with the crypto exchange.
If you haven’t found a way to set up API keys on your crypto exchange, click the “Learn how to find this information” link and you will be directed to an article on how to create or find the APIs for your exchange that you need to sync with Koinly.
The API setting allows the customer to integrate any exchange, wallet, crypto services, or blockchain using API keys. The service – like any crypto service that allows generating API keys and has guides on how to set up API keys. The API keys are encrypted with AES-256-GCM.
API keys are generated from wallet, blockchain, and crypto exchanges in which the user trades or transacts crypto deals, and each of them may have different settings for creating API keys.
Simply copy the API keys from your service and go to Koinly to paste the details required. You will need to choose when or a time from which you will be importing transactional data when setting up the API.
Synching Blockchain: To connect a blockchain wallet, you will use the Blockchain tab to set up auto sync, click Connect Blockchain button. Go to your blockchain wallet account which you need to connect to Koinly and copy the account wallet address.
Then go back to Koinly after clicking Connect Blockchain, copy the wallet address, and set up the time from when you want to start importing data. Click or tap Import.
For example, to connect a wallet to a blockchain wallet, choose Bitcoin blockchain and copy your Bitcoin wallet address. Once the sync is finished, it will display all the transactions from your wallet.
Synching Wallets and Other Services: Repeat the process in the above steps. Select the wallet, paste in your wallet address, choose the time from when to import information, and click/tap the Import button.
For all the cases of synching blockchain, exchanges, wallets, and other crypto services, it will show you once the sync is complete. You can then head over to the crypto tax report section.
Another option for syncing your wallet or service accounts is to download CSV files from the wallet or crypto exchanges and upload them manually on Koinly.
Step #3: Wait for gains to update and review the data: Once the sync of data is complete, you should confirm that all the data has been added correctly. This does not require purchasing a plan with Koinly. This means you can use the software as a portfolio tracker that tracks crypto investments across different crypto platforms and services.
Koinly will then go through the transaction history and calculate the cost basis and fair market value of crypto assets dealt, short and long-term capital gains, and income. A tax summary is then availed for free.
Head over to the crypto tax report section on Koinly.
Step #4: Download or export tax reports to tax apps: You can manually or automatically, with software like TurboTax, file taxes, by exporting the tax reports generated from Koinly. However, a paid plan is needed for this to work.
Koinly will generate a PDF that contains a summary of the capital gains, other gains, a list of all capital gain transactions, end-of-year balances, asset summary, and income transactions.
The software creates filled IRS tax reports for those filing in the United States. It can produce Form 8949, Schedule D, TurboTax Online and Desktop reports, and Schedule 1 (Form 1040) that can be filed with the IRS. These can be filed in the normal way by uploading to a tax app, sending by post, or to an accountant.
Koinly allows facilitating exporting of the generated reports to TurboTax and TaxAct.
Here is a full video on how the software works:
Adding a CPA to Koinly Account
Clicking the Settings button exposes the Team menu from where you add the email address of the accountant you want to invite. Proceed to invite them.
Koinly Features
Here are the features:
- Track transactions for 6,000+ cryptocurrencies and 700 crypto exchanges, wallets, and crypto services. It also supports hardware wallets such as Trezor and Ledger. It also supports 14 blockchains including Bitcoin, Ethereum, Litecoin, NEO, Avalanche, Polygon, Binance chain, and EOS.
- Exchange and transaction fee tracking.
- Six years of historical spot prices.
- Migrate data from Cointracking and Cointracker apps.
- Error Reconciliation: Auto balance verification, negative balance warning, double-entry for each asset, advanced transaction filtering, transaction sorting by gains, and cost analysis (the last one available for paid plans). It highlights issues that would result in negative account balances, including missing transactions and erroneous imports.
- Portfolio Tracking: Use the tool to track transactions as well as value and realized and unrealized gains over time.
- Tax Loss Harvesting: It helps to find opportunities to realize losses in crypto and NFTs. This can be used to offset gains and thus reduce the total tax bill.
How Much Koinly Cost/Charge to Report Taxes
The range for pricing is between $49-$179/year but the cost is organized into different plans. To start with, it offers a free trial plan per year with limited functionality/features. It allows, among other things, to import up to 10,000 transactions, connecting unlimited wallets and accounts, etc but it does not avail for downloading or exporting to tax apps.
The newbie package costs $49 per tax year for up to 100 transactions, auto-generating of form 8949 and Schedule D and international tax reports. It also supports generating a comprehensive audit report and wallet-based cost tracking.
The Hodler plan costs $99/per tax year for up to 1000 transactions and the Newbie plan offers, and the Trader plan costs $179/per year for 10,00+ transactions alongside the Hodler plan offers.
Koinly Pros & Cons
Pros:
- Generate localized tax reports for 100+ countries.
- Automated data extraction, exporting to tax apps, and portfolio tracking.
- The free edition supports 10,000+ transactions.
- Invite an accountant to handle tax filing.
- Integrate with 700+ exchanges, wallets, and services; 6,000+ coins and tokens, most of which are not available on competitors.
Cons:
- Expensive for high-volume traders.
- Some customers complain that it takes time to sync after connecting the APIs.
Comparison Table of Koinly with Other Crypto Tax Calculators and Reporting Software
| Crypto Tax software name | Pricing | Free Plan Available | Exchanges/wallets/ accounts/services to integrate | Reports to generate |
|---|---|---|---|---|
| Koinly | $49-$179/year | Yes | 600+ | FIFO, HIFO, LIFO, Average Cost, Form 8949, and Schedule D. Expense and fee reports, etc. |
| CoinTracking | $10.99 - $54.99 per month with an option for custom corporate plans. | Yes. | 100+ | LIFO (Last In First Out), HIFO, LOFO, HPFO, LPFO, HAFO, LAFO, AVCO, OPTI, ZERO. Income and capital gain tax reports. |
| Coinpanda | $49 to $189 for between 100 to 3000+ transactions. | Yes. | 800+ | Form 8949 and Schedule D, K4 blanketten for Sweden, RF-1159 (Norway) among others. |
| Accointing | $79 to $299 | Yes. | 300+ | FIFO, LIFO, and HIFO, and formal tax reports for different countries' regimes. |
| TokenTax | $65 to $2,500 per tax year. | No | 85+ | IRS Form 8949. Capital gain and income tax reports. Audit Trail Report, Tax loss harvesting report, Mining and Staking Income Report, ETH Gas Fee Report, International Gain / Loss Report, and FBAR Highest Yearly Balances among others. |
| ZenLedger | $49 to $399 per year. | Yes | 400+ | Capital gains and income tax reports. Form 8949, Schedule 1, and Schedule D. |
Koinly vs Cointracker
As can be seen in the table above, Koinly competes favorably with some crypto tax software in some aspects and badly in other aspects. In the Koinly vs Cointracker debate, Koinly pricing wins in terms of the software’s free plan because the forever free plan allows up to 10,000 transactions unlike Cointracker’s 25 transactions only.
Koinly pricing also seems lower for other pricing tiers because CoinTracker tiers are $59, $99, $199, and $299+ for 26 – 100; 101 -200; 201-1,000; and 1,000+ transactions respectively.
In terms of customer experience and satisfaction, both crypto tax software pieces have had their ups and downs. Some Koinly customers complain that the platform mislabels transactions, does not make it easy to re-classify transactions manually for tax purposes, and takes time to sync with some crypto accounts and wallets.
Some CoinTracker customers also complained of bugs and difficulties with classifying different types of transactions. However, both support thousands of crypto and multiple blockchains and crypto exchanges.
Feature-wise, Koinly is richer with support from NFTs, DeFi, FIFO, LIFO, HIFO, email, live support, error reconciliation, CSV, and wallet imports. CoinTracker features DeFi and NFT support but for higher price tiers only. It also supports FIFO, LIFO, HIFO, tax summary by wallet, CSV, and wallet import.
Koinly is also a clear winner in terms of customer reviews, scoring 4.8/5 on TrustPilot having been reviewed by 1,132 reviewers compared to CoinTracker’s 3.1/5 from 258 reviewers. Many other reviewers agree Koinly is better than CoinTracker in many regards.
Koinly is available in more than 30 countries, including the U.S., while CoinTracker serves 5 countries fully though it is also available in the U.S. Koinly also offers support via email and live chat for all customers, while CoinTracker offers support for those subscribed to higher price plans.
Those asking if is Koinly safe may find solace in the fact that both Koinly and CoinTracker use encryption, have their platform securely audited by third parties and provide two-factor authentication on user accounts.
Zenledger vs Koinly
Both Koinly and ZenLedger offer support internationally, with ZenLedger offering explicit support for tax documents in the United States. You can only download the documents needed to report crypto tax activity to the IRS. Koinly provide documents for tax reporting in countries that use Average Cost, LIFO, FIFO, HIFO, etc in calculating capital gains.
Koinly integrates more than 700 crypto exchanges, over 35 blockchains, and 70 wallets. In comparison, ZenLedger supports over 400 crypto exchanges, 40 blockchains, 10 NFT projects, and 100 DeFi projects. More are supported via automated APIs. Hence ZenLegder is a clear winner in the DeFi space.
Koinly wins in terms of the freemium with a limit of 10,000 transactions on it while ZenLedger provides up to 25 transactions for free. Both score equally on the second-level plan at $49 per year for up to 100 transactions with generous features. TurboTax integration is free on Koinly but will, however, cost $150/hour on ZenLedger if requested.
ZenLedger’s premium plan costs $149 per year for up to 5,000 transactions and is better than the Trader plan on Koinly in terms of pricing except in terms of other features beyond the number of transactions.
If we were to compare Koinly’s $279 per year Pro plan, which offers 10,000+ transactions with ZenLedger’s Executive Plan, the former wins in pricing and features. The Executive plan on ZenLedger costs $399 per year for unlimited transactions.
Koinly allows inviting a tax professional to the account. ZenLedger offers Tax Professional Prepared Plans for 30 mins consultations at $195, $3,500 per year, and $6,500/per two years.
ZenLedger is rated 3.5/5 by 50 reviewers on TrustPilot compared to Koinly’s 4.8/5 by 1,132 reviewers.
Koinly vs CoinLedger
CoinLedger wins in many regards against Koinly in terms of transaction importing, customer support, and tax software integration (it integrates TurboTax, TaxAct, Taxslayer, and H&R Block against Koinly’s TurboTax and TaxAct).
CoinLedger also has more blockchain integrations than Koinly. It also provides more features and its interface is regarded as easier to use than Koinly’s regarding classifying transactions.
Koinly, though, has a higher user rating on TrustPilot with 4.8/5 by 1,132 reviewers compared to ZenLedger’s 4.8/5 but from 792 reviews.
Koinly vs Other Crypto Tax Software
Koinly also scores a higher customer rating than CoinLedger (4.8/5 from 792 reviews) Accointing (3.9/5 by 94 reviewers), TaxBit (3.8/5 from 377 reviewers), TokenTax (4.6/5 by 139 reviewers), which are some of the best crypto tax software pieces.
Koinly FAQs
Q #1) How to import Koinly to TurboTax?
Answer: Importing the tax report to TurboTax on Koinly starts with generating the report. To generate a tax report on Koinly, you need to connect an exchange, wallet, blockchain, or crypto service via an API or simply download transaction history in the form of CSV.
Visit the Wallet tab while logged in to connect to an exchange or crypto service account, or upload the transaction histories. You will then be able to generate a report.
The second step is downloading the report generated on Koinly as a TXF file and saving it to your computer or phone. Log in to TurboTax, navigate to File>Import>From Accounting Software, and then select Other Financial Software (TXF file).
Click Continue, browse the file, and select the TXF file. The file should appear as 1099-B. Click/tap the Import Now button to import.
Q #2) How to add Trust Wallet to Koinly?
Answer: You require signing up for an account with Koinly if not yet. To connect to Trust Wallet, visit the Wallet tab from the menu. Select Add new wallet. You will select Trust Wallet from the list, select set up auto-sync, click Connect blockchain, and search for and select Blockchain. Paste your wallet address and click/tap Import.
By connecting the two, Koinly will import all the trades and transactions from Trust Wallet. It will also calculate the gains, losses, and income from Trust Wallet transactions. The tax report is also available for download on Koinly.
Q #3) How long does Koinly take to sync?
Answer: According to information issued online by Koinly, adding an account on an exchange or wallet service takes 15 minutes to sync. There is an option for manual sync triggering instead of auto-syncing.
The other option is to download a CSV file from your exchange or wallet account and upload it manually on Koinly. That way, you won’t have to sync the exchange.
Some exchanges, however, do not grant the API full access to user transactions even after adding the API keys.
Q #4) How much does Koinly cost?
Answer: Koinly costs between $49 and 179/year depending on which package you want to choose. First, there is a free option that provides tracking for up to 10,000 transactions but does not have the option to download or export tax reports to tax apps. For the latter to work, you would have to purchase a plan.
The paid plans are differentiated by the maximum number of transactions tracked, from 100 in the Newbie plan, 1000 in the Hodler, and 10,000+ in the Trader plan. The paid plans also have additional benefits.
Q #5) How much is Koinly?
Answer: Koinly is free to download and use with a paid plan that allows users to track up to 10,000 transactions. The free plan allows for generating tax reports but one can’t download or export them without a paid plan.
Otherwise, the paid plans cost between $49 to $179 for transactions of between 100 and 10,000+ in addition to downloadable and exportable tax reports.
How to use Koinly Promo Codes to buy a plan?
The Internet, both on the Koinly website and third-party promo code websites, is the source for Koinly coupon codes. Koinly promo codes are available for specific purchases or site-wide applications. In other words, you can apply them during the purchase of a specific tax plan or all of them.
To get Koinly coupon code, visit the website or search for the words on the Internet. The latter displays sites such as Reddit discussions and other sources of promo codes. Some were emailed to users from the company. To use it, sign up on Koinly and proceed to buy a plan in the normal way and you will be presented with an opportunity to enter the code.
If it is valid, the system will apply a discount as specified by the provider of that code and you pay lesser on the plan.
Conclusion
Koinly tax software allows crypto tax reporting and calculation almost a walk in the park especially for small businesses that have few transactions but it is never easy to manage for a big business with a huge amount of transactions.
It makes it easy to pull transaction records from hundreds of crypto exchanges, wallets, blockchains, and services, to then automatically compute taxes due and generate reports for submitting to tax agencies – all depending on the customer’s jurisdiction.
Koinly is easy to manage in terms of adding wallets and blockchains including through APIs. It makes it easier to auto-sync for the Ethereum blockchain and some wallets. It also compares favorably, sometimes scoring a 5/5 rating online against CoinTracker, ZenLegder, and other crypto tax software.
Coinly is not only more popular but also has a higher rating on TrustPilot compared to these and many others. It is beaten featurewise, ease of use, tax software integrations, and blockchain integrations by CoinLedger.
Research Process:
Time Taken for Koinly Review: 1 day