What is Koinly and how can it help me with my cryptocurrency taxes?

Koinly is a cryptocurrency tax software that automates the tracking of transactions from various exchanges and wallets, simplifying the often complex process of calculating capital gains and losses for tax purposes.

The software can connect with over 800 exchanges and wallets, including popular platforms like Coinbase and Kraken, allowing for seamless data import and management.

Koinly calculates your tax liability by tracking the market price of cryptocurrencies at the time of each transaction, which is crucial for determining accurate capital gains or losses.

The software supports various tax reporting standards, making it adaptable to the tax laws of more than 20 countries, which is particularly useful for international investors.

Koinly can handle different types of cryptocurrency transactions, including trading, staking, mining, and DeFi activities, making it versatile for different investment strategies.

It employs a method known as FIFO (First In, First Out) for calculating capital gains, which means it assumes that the first coins you buy are the first ones you sell, a method commonly accepted for tax purposes.

Users can also track their cryptocurrency portfolio's performance over time, gaining insights into the growth and volatility of their investments.

Koinly helps to exclude insignificant transactions, such as small rewards or spam transactions, which can clutter tax reporting and complicate calculations.

The software supports various crypto tax forms and can generate tax reports that are compliant with local regulations, reducing the risk of tax-related penalties.

Koinly can also integrate with accounting software, enabling accountants to easily access their clients' crypto transaction data for more streamlined reporting.

The platform is designed to handle large volumes of transactions, making it suitable for active traders who conduct thousands of trades annually.

Users can view their tax liability in real time, allowing for better financial planning and management throughout the year rather than just at tax time.

Koinly's calculations are based on actual market prices at the time of transactions, which can differ significantly from current prices, underscoring the importance of accurate historical data.

The software can also facilitate the reporting of income earned through staking or mining, which is often overlooked in traditional tax software.

Koinly's user interface is designed for simplicity, making it accessible even for those who may not have extensive knowledge of cryptocurrency or tax regulations.

The platform offers various pricing plans, catering to different levels of cryptocurrency engagement, from casual investors to professional traders.

Koinly's tax reports can be generated in a matter of minutes, which is significantly faster than manual tax calculations, especially for individuals with many transactions.

The platform's built-in security measures help protect users' data, a critical consideration given the rise in cyber threats specific to the cryptocurrency space.

Koinly allows users to export their data in multiple formats, which can be useful for filing taxes with different jurisdictions or sharing with accountants.

The software is continuously updated to reflect changing tax laws and regulations surrounding cryptocurrencies, ensuring users remain compliant with the latest requirements.