Koinly is a service that can calculate your cryptocurrency taxes, track your assets across multiple exchanges and wallets through a portfolio, and even draft IRS-compliant tax reports.
The April tax deadline is coming, and if you’re someone who uses cryptocurrency, especially if you have multiple blockchain wallets or exchange accounts, it might be worth looking into Koinly.
The IRS is clear in its guidelines that Bitcoin and other cryptocurrency profits incur capital gains taxes and income taxes. Koinly makes tracking and reporting your crypto assets across multiple platforms much easier, saving you time and stress when tax season rolls around.
Quick Summary
Pros
Cons
About Koinly
Founded in 2018, Koinly advertises itself as a tax solution for crypto investors and accountants. It offers many services, including a tax calculator, portfolio tracker, and a profit/loss calculator.
People who buy and sell crypto likely know the difficulty of tracking every transaction. Koinly’s simplicity is its biggest draw, offering a single platform to view all transactions, an overview of gains and losses organized by year, and quickly calculate how much you’ll owe in taxes, all for free.
You can use the tools for up to 10,000 transactions for free, but the free tier doesn't provide tax reports.
Koinly can track various assets and transaction types, including cryptocurrencies, DeFi platforms, futures, options, margin trades, and NFTs.
Koinly Features
Koinly integrates with all major blockchains, wallets, and exchanges, including Coinbase, Binance, and Bittrex. To see your capital gains or losses, users simply have to connect to their exchange accounts via an API key or the wallets’ public addresses, and Koinly will do the rest.
Portfolio Dashboard
Koinly has a great dashboard that allows you to track your portfolio value, income, and gains/losses.
Tax Tracking
For those of you still insisting on doing your crypto taxes on your own, consider the following challenges. Reporting capital gains from crypto involves keeping a record of changing values over time. This means tracking the cost basis or fair market value of your crypto (the value of the crypto in fiat currency) on the day you receive it and sell it.
The IRS taxes the difference between the two values (if it’s a positive difference), also known as a Capital Gains Tax. While doing this for one or two transactions may sound simple enough, a crypto investor with hundreds or thousands of transactions a year has a much more daunting task.
The second challenge is separating which crypto assets are liable to capital gains tax from asset trades versus income tax from staking, mining, or minting new NFTs. It can be tedious and error-prone to categorize each transaction, especially if you have more than a few dozen.
Koinly offers to resolve both of these challenges. Once you’ve connected your exchanges and wallets with Koinly, it identifies all taxable transactions and calculates your capital gains and losses for you. This can save you hours if you’re dealing with thousands of transactions in one financial year.
Koinly also has a ‘Smart Matching’ feature that automatically matches transfers between connected wallets and accounts. Crypto transferred between two wallets you own is not taxable, so Koinly can save you from paying more in taxes than you owe.
Also, consider what is maybe Koinly’s best feature. Most of its features are completely free. Premium memberships give you additional access to tax documents and comprehensive audit reports. But the tax calculator, wallet-based cost tracking, and capital gains preview are all free to any user.
Tax-Loss Harvesting
Tax-loss harvesting is a popular tactic you can use to offset capital gains in order to reduce your tax burden. In a nutshell, it involves selling securities to realize a loss that you can apply against some of your capital gains. After selling off assets, you purchase similar assets to maintain your portfolio composition.
You can leverage tax-loss harvesting on crypto as well as stocks. Because Koinly tracks all of your capital gains and losses per crypto asset, it’s easy to tell which coins you can sell and how much you’ll realize in losses.
A slight downside of Koinly is that it doesn’t have an independent tax-loss harvesting calculator. Other crypto tax software like ZenLedger has a standalone tool that breaks out tax-loss harvesting in a spreadsheet, so you can certainly go to ZenLedger to use theirs.
In contrast, Koinly highlights your unrealized gains and losses on its dashboard. This is essentially the same information, but having a dedicated calculator that spells everything out per asset is preferred.
International Support
An advantage of Koinly over most crypto tax software is its international support. Currently, Koinly is available in over 20 countries for taxes, including:
- Australia
- Belgium
- Canada
- Denmark
- Finland
- France
- Germany
- Japan
- Norway
- South Korea
- Spain
- Sweden
- United States
When you change your home country, Koinly creates localized versions of your tax reports. This means it’s doing more than just changing currency figures around. For example, if you select Sweden as your home country, Koinly will provide additional tax report options like a K4.
Koinly Pricing & Fees
Accessing most of Koinly’s features is completely free. However, the free tier does NOT include tax forms.
There are three paid membership tiers ranging from $49 to $199 per tax year, which give you access to IRS-compliant tax documents, international tax documents if you live outside the US, and the ability to export said documents to a tax service like TurboTax or TaxACT.
Header | Free | Newbie | Hodler | Trader |
|---|---|---|---|---|
Price | $0 | $49 | $99 | $199 |
Transaction Limits | 10,000 | 100 | 1,000 | 10,000+ |
Tax Forms | No | Yes | Yes | Yes |
Support | Email Only | Email & Chat | Email & Chat | Email & Chat |
Koinly Alternatives
In researching alternatives to Koinly, we looked into other crypto tax and accounting companies offering similar services like ZenLedger. Both companies have unique features that could make them the right choice for you.
ZenLedger: ZenLedger condenses users' entire transaction histories across all wallets and exchanges into a single ledger. It also boasts more integrations than Koinly. ZenLedger has particularly worrying customer service reviews online, which point to potential issues with the software correctly importing transactions. ZenLedger allows only up to 25 transactions for free accounts, compared to Koinly’s 10,000.
You can also check out CoinTracker and CoinLedger as well.
Safety & Security
Per Koinly’s website, “Koinly services and data are hosted on Heroku. Heroku is a cloud application platform designed to protect customers from threats by applying security controls at every layer from physical to application, isolating customer applications and data, and by rapidly deploying security updates without customer interaction or service interruption.”
Users can authenticate via Google or Coinbase, in which case they don’t store passwords with Koinly. The platform doesn’t require private keys or access to funds for your exchanges, meaning withdrawing and trading privileges can be withheld when connecting API keys with Koinly.
Customer Service
Customer service reviews for Koinly are very impressive. The company currently has a 4.7/5 rating on Trustpilot, an Excellent rating, with over 1,800 reviews. Many of these reviews praise Koinly’s thorough customer service and fast response times. Most negative reviews are due to errors while importing transaction history, but few of those reviews mention bad customer service, which is a good sign.
In our brief interactions, we received prompt and friendly responses to all inquiries.
The Bottom Line
Koinly is a crypto tax and accounting service that provides users with many helpful tax tools for free. Users can easily calculate how much they owe in taxes, have their transactions sorted, and view capital gains and losses for free.
Koinly offers to generate IRS-compliant tax forms for users with a paid membership. Boasting strong customer service reviews and security measures, Koinly may be a great choice for you, especially if you’re a crypto investor with hundreds to thousands of transactions in a given financial year.
Eric Rosenberg is a financial writer, speaker, and consultant based in Ventura, California. He holds an undergraduate finance degree from the University of Colorado and an MBA in finance from the University of Denver. After working as a bank manager and then nearly a decade in corporate finance and accounting, Eric left the corporate world for full-time online self-employment. His work has been featured in online publications including Business Insider, Nerdwallet, Investopedia, The Balance, HuffPo, Investor Junkie, and other fine financial blogs and publications. When away from the computer, he enjoys spending time with his wife and three children, traveling the world, and tinkering with technology. Connect with him and learn more at EricRosenberg.com.