Koinly Review: A Crypto Tax Software

It’s a tale as old as time, okay, maybe not that old, but we know taxes has been a pain in the backside for everyone since as far back as 6,000 BC in the ancient Mesopotamian city-state of Lagash. That is a lot of tax paid over the centuries, and while cryptocurrency may be a revolution, even crypto users are not spared this burden. But fret not, as there are tax software tools to make your tax responsibilities much easier, as you will find out in this Koinly Review.

Koinly is a crypto tax software that simplifies cryptocurrency tax reporting. It allows users to link crypto exchange accounts and wallets to generate tax reports in under 20 minutes. It also integrates with your wallets and exchanges to simplify the process of tracking your crypto activities.

The Key Features of Koinly Are:

  • Automated crypto tax reporting
  • Integrations with over 400 crypto exchanges and wallets
  • Real-time tracking of crypto transactions and gains/losses
  • Tax reports for over 100 countries, including the US, UK, Canada, and Australia
  • Supports multiple accounting methods, including FIFO, LIFO, Highest Cost, Average Cost Basis, and more
  • Comprehensive reporting of taxable events, including trades, transfers, airdrops, forks, DeFi income, and mining
  • Integration with popular tax software like TurboTax and TaxAct
  • Ability to import data from CSV and Excel files
  • Cryptocurrency portfolio tracking and analytics
  • Supports tax formats such as Form 8949, and can populate figures for Schedule D
  • Distinguishes income from different sources such as staking, mining, lending, etc.
  • User-friendly interface

Koinly Pros and Cons

Pros of Koinly:

  • Localized tax reports for over 20 countries, generic tax reports useful for over 100 countries.
  • Free version available.
  • Supports over 20,000 crypto assets, 170+ blockchains, 400+ exchanges and 100+ wallets.
  • Simple to use.
  • Clever enough to group small trades into a single transaction.
  • Crypto payments accepted for software use.
  • Detects duplicate transactions and transactions that should be excluded from tax reporting.

Cons of Koinly

  • Not 100% automated and some transactions require manual input.
  • IRS-compliant tax forms are only available for paid plans.
  • Some users encounter errors when importing transaction history.
Year Established:2018
Countries Supported:USA, UK, Canada, Australia, Sweden, Norway, Ireland and 20+ other countries for specialized tax report generation. General tax reports are available for 100+ countries.
Cryptocurrencies Supported:20,000+
Platforms Supported:400+ exchanges, 100+ wallets
Beginner Friendly?Yes
Used By:Retail traders, crypto investors, accountants, businesses, and accountancy firms.

The Problem With Crypto Taxes

If you are new to the world of crypto and taxes, it can be an absolute minefield. To start off, there is no “one rule” to govern all your transactions, and crypto is classified differently in different countries.

Some jurisdictions classify crypto as property, some as “miscellaneous,” while others consider it a commodity or “intangible property.” How it is classified changes whether the tax will be treated as capital gains tax or income, and this is just on the personal side. If your business deals with cryptocurrencies in any capacity, either as a service, to accept payments, or if you are trading as part of a business activity, now you have opened up a whole new dimension of the proverbial “can of worms.”

And if that isn’t complicated enough, consider all the different ways one can earn some form of profit on crypto, many of which are taxed differently. Here are some examples of events that are taxable in many countries:

  • Selling crypto for fiat at a profit or loss.
  • Exchanging digital assets on a DEX or centralized exchange- Yup, even swapping an altcoin for another altcoin or Bitcoin can trigger a tax event. You need to know the fiat value of the tokens at the time of swap, which is where crypto tax software comes in handy.
  • Receiving airdrops- Yes, apparently this is “income” in many countries.
  • Sale of NFTs- This can trigger capital gains, or income tax depending on the nature of the income.
  • Earning income from Blockchain and P2E games.
  • Staking income.
  • Providing liquidity or yield farming- Any APY earned may be considered income.
  • Using CeFi lending platforms like Nexo, an exchange, or DeFi lending protocols like Compound Finance or Aave.
  • Crypto mining.
  • Using crypto debit cards.
  • Earning rental/advertisement income from digital land or renting NFTs.

What I am driving at is that the problem with crypto taxes is that it’s complicated and there are many factors to consider. These distinctions matter because they determine how much tax you have to pay on each transaction.

To avoid trying to figure all this out yourself and risk making a mistake which can lead to fines or even jail time, I highly recommend a crypto tax software like Koinly.

How Koinly Solves the Crypto Tax Problem

Koinly makes crypto tax reporting easy. As mentioned, crypto taxes can be incredibly complex and difficult, and without a tool like Koinly, it can take hours to put together all the transaction data needed to prepare your crypto tax report documents.

Consider the following scenario:

If you use a decentralized exchange (DEX) to swap one token for another, you may have to pay a gas fee to execute the transaction on the blockchain, a liquidity provider fee to access the pool of tokens on the DEX, and a protocol fee to support the development of the DEX. Each of these fees can affect your cost basis and capital gains or losses.

DeFi transactions can also generate income that is taxable. For example, if you provide liquidity to a DEX by depositing your tokens into a pool, you may receive a share of the fees collected by the DEX as well as governance tokens that represent your voting rights in the protocol. Both of these rewards may be taxable as income at their fair market value when you receive them.

DeFi transactions can be challenging to track and report because they may not be recorded by your exchange or wallet. It is also highly doubtful that you will receive forms or statements from the DeFi protocols themselves for tax reporting purposes. That’s why it’s important to use crypto tax software that can help you identify and calculate your DeFi transactions accurately.

What is Koinly and How Does it Help with Crypto Tax Solutions?

Koinly is a crypto tax software that helps you manage and automate your crypto taxes, and is also a very valuable portfolio tracking instrument. It provides a comprehensive set of tools and features to help users accurately calculate their crypto taxes, while also providing an easy-to-use interface.

Perhaps the best thing about Koinly is that it can directly integrate with most crypto exchanges and wallets, even self-custodial and DEXes to import crypto activities automatically, saving you hours, if not days of work.

When I say days, I’m not exaggerating either. Many other crypto traders and users, myself included, would literally spend days scouring through crypto transactions like trades, staking, lending, etc, across various DEX and CEX platforms, making sure we were recording proper data. Then it got worse when I started using multiple different crypto debit cards and learned that thousands of purchases I had made over the year could also constitute taxable events, so yeah, tax season was a nightmare before knowing about tax tools like Koinly.

How Does Crypto Tax Software Work?

Crypto tax software simplifies the computation, calculation, processing, and collection of crypto transactions and enters the data with the appropriate tags and classifications and can populate that information into the appropriate tax forms.

The programs can help individuals and businesses calculate and report on their cryptocurrency activities such as trading, mining, staking, selling, lending, and more. The process is done by connecting the software to a user’s crypto wallets, exchanges, and DeFi platforms, and the information is automatically synchronized via API keys. If API keys are not available, the user can also export the data into a CSV file to upload into the tax software.

Once the data is collected in the crypto tax software, depending on the platform, the user can go ahead and file their taxes, generate a report that can be used in a tax filing tool like TurboTax, or forms can be printed and sent to an accountant.

Features & Benefits of Koinly for Crypto Investors

As Koinly automatically imports and organizes your crypto transactions, and the software is updated for compliance so it stays up to date with the constantly evolving regulatory environment, using Koinly ensures that users are not overpaying any unnecessary taxes on crypto investments or violating tax obligations.

The software is also capable of automatic tax loss harvesting and using capital losses to offset capital gains for maximum tax efficiency.

Portfolio Tracking

With Koinly, users can track their crypto assets and performance across multiple platforms. It is common for crypto users to have digital assets spread all over the place, from different wallets and platforms to exchanges, making it impossible to track your portfolio’s performance. Koinly provides an all-in-one dashboard view showing your total crypto asset position.

The portfolio tracking feature is useful as it can calculate your actual ROI across all holdings, growth over time, and provide an overview of any mining, staking, lending income, and more.

Data Import

Koinly wouldn’t be very useful if it didn’t support automation and mass data import, now would it? Instead of having to go back and forth between every platform you store crypto and enter every single data point, users can sync their data to Koinly and mass upload files for anything that cannot be automatically synced.

Supporting over 20k tokens, 170 chains, 400+ exchanges, wallets and services, here is what can be done:

  • Connect accounts via API and add wallets using x/y/zpubs and ETH tokens using your public address.
  • Track margin trading on centralized exchanges
  • Automatically tag “income” from imported sources coming from platforms like Nexo, Compound, Aave, etc.
  • Smart Transfer Matching- Koinly has an AI detection tool and can detect transfers made between your own wallets to exclude them from tax reports.

With automated data input, the software further eliminates manual effort by recording the date of the transaction, the number of tokens in the transaction and the price of the transaction.

Who is the Best Fit for Koinly?

Koinly is a tool that anyone who dabbles in cryptocurrency can use, from those who simply hodl, to advanced and professional users who frequently trade, run a business, or dive into the complexities of DeFi.

This tax software is used by retail traders, accountants, businesses, and accountancy firms alike, there isn’t anyone that Koinly isn’t suitable for. For anyone who finds crypto taxes overwhelming, Koinly also has a team of experts who are more than happy to walk you through the whole process to make sure you are confident with your tax responsibilities.

Koinly Fees

Koinly has a tiered fee structure ranging from free to €169 per year depending on usage and needs of the user. The free version is great for lite users who only need portfolio tracking and previews, then the prices increase as the user needs get more complex. Here is a look at the features that are available with each price level.

Bottom Line

Koinly is a fantastic tax tool that makes crypto tax management as easy as possible, providing one of the most comprehensive platforms available that can provide solutions to meet the needs of any crypto user.

The Koinly team has years of experience in the field of finance and accounting, as well as crypto, and this is evident in the platform developed that is trusted by both regular users and tax professionals around the world. I wouldn’t hesitate to recommend Koinly to anyone who is looking to make tax season as painless as possible.


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