TaxBit Review

TaxBit Review

Robert McDougall 

January 9, 2024

Cryptocurrency

Crypto taxation is a complex and ever-evolving topic. With increasing government involvement and losses from bankrupt exchanges influencing the need to track even small crypto transactions — calculating and reporting your crypto tax can be challenging. This is where TaxBit steps in as a reliable solution that automates calculating and reporting your crypto taxes. 

As a crypto accounting and tax software, TaxBit enables users to manage and compute their tax returns efficiently. To simplify the process, the software integrates with over 500 crypto exchanges and wallets, including Coinbase, Binance, and Gemini. This means you can easily input your trades and calculate the payable tax on your earnings and losses. So, as long as you have TaxBit, there's nothing left for you to do manually.

What's more? This software comes with a free plan, which allows you to get an overview of all your transactions on one software. But is it easy to use this software? And how exactly does it simplify tax calculating and reporting tasks? What do other users say about this software? Let's explore all that (and more) in this detailed review. 

Key Features of TaxBit 

One of the key factors to consider when choosing a crypto tax software is its features. Besides, there are various other crypto tax software available today. So, what makes TaxBit stand out in the competition? Let's take a look.

Automated Tax Calculations for Cryptocurrency Transactions

Firstly, TaxBit simplifies calculating your payable taxes through automated tax calculations. How do these calculations work? Simply put, TaxBit enables automated data feeds for 500+ exchanges and crypto services, giving you a complete picture of all your tax activity in real-time. 

Add all your necessary accounts to your TaxBit dashboard to use this feature. This will allow you to keep track of all your cryptocurrency activity in one spot, making TaxBit your one-stop solution to access all your activity records. 

Integration with Major Exchanges

Despite being limited to users who pay crypto taxes to the U.S. government, this software is compatible with almost every exchange globally. While its direct API support makes it compatible with most popular exchanges, TaxBit extends its accessibility to even the users of smaller exchanges through manual CSV file imports. 

TaxBit also offers an automatic CSV import feature for most exchanges, making dealing with such file types easier. Some of the major exchanges TaxBit supports include: 

But wait, that's not all! TaxBit also supports over 2,500 unique cryptocurrencies, crypto wallets, and DeFi platforms. Notably, some popular non-exchange products supported by this software include: 

  • Exodus
  • BitPay
  • BitGo
  • Phantom Wallet

User-Friendly Dashboard and Reporting Tools

Another notable feature that makes TaxBit stand out is its user-friendly dashboard and reporting tools. This refers to the portfolio performance tab on your TaxBit dashboard, which is accessible to Plus and Pro subscribers. 

This portfolio performance tab lets you track your digital assets and view your daily/monthly gains and losses. If that's not enough, this tool also lets you view various divisions of your portfolio, which can be sorted according to asset type, exchange, or source.

Tax Optimization

TaxBit also allows its Plus and Pro users to make smart trading/investing decisions thanks to the tax optimizer. This tool lets you check the real-time impact of trades on your tax portfolio before you execute them. In other words, it gives you a glimpse into the future. This way, you can determine whether to acquire or sell an asset based on the impact on their tax return statement.

How Does TaxBit Work?

Now comes the real question: how can you use the advanced tax calculating and reporting tools TaxBit offers? Initially, I thought anything related to tax reporting would be complex and time-consuming. After all, you must be very careful when reporting your crypto tax to avoid legal issues on your assets. But gladly, that’s not the case when using TaxBit. In fact, TaxBit simplifies tax calculating and reporting it through automated features. All you have to do to get started with TaxBit is: 

  • Sign up for TaxBit from the official homepageYou can begin a free trial or directly become a paid user at TaxBit. 
  • During Sign-up, you have to fill out a form with basic information. This will include your name, anticipated salary, postal code, etc. This initial step in the registration procedure determines the tax rates that can be applied to your capital gains from the previous tax year. 
  • After the software calculates your tax rates based on location and income, you must connect your exchange accounts to the TaxBit platform. 
  • Next, the software will search and obtain all transaction details from your exchange deals, i.e., profits and losses. TaxBit will then automatically analyze the data and generate thorough reports appropriate for filing with the IRS. 
  • Once your data has been compiled and synced, you can load the data on your TaxBit profile and view your current crypto tax position. Your tax report will now be ready for download for tax submission. 

TaxBit Pricing and Plans

While I was glad that TaxBit provides some free features, I realized they might not be enough for everyone. Hence, you must subscribe to one of its paid plans to access all the advanced features I mentioned earlier. Gladly, these paid plans are divided according to various user needs and budgets, each offering basics and some additional features. These include: 

Free Plan

As I explored TaxBit’s free plan, I found it ideal for users beginning their crypto accounting journey. It allows users to submit transaction history and calculate their earnings and taxes from Ethereum NFTs and DeFi. However, it is worth noting that this plan lacks the versatility that a regular trader may require. Unfortunately, TaxBit’s customer service also doesn’t provide much help. The only way to explore more options is to opt for a paid plan.  

Basic Plan

The TaxBit Basic plan progresses slightly by providing users with a broader list of platforms to pick from and input their transactions. As I tried it myself, I found this plan ideal for users who trade on multiple blockchains and platforms. However, with Basic, users cannot access any accounting feature. So if you’re looking for that feature, you must upgrade your pricing plan. 

Plus Plan

Taking its features one step forward, the Plus plan introduces users to the first level of personalized assistance. Notably, this subscription includes all of the benefits of the lower-tier plans, as well as an additional support team for CSV uploads, an NFT management suite, and a portfolio performance suite. 

While these are quite handy features, the Plus plan has some limitations. Specifically, it doesn’t let you search for CPA or IRS assistance in a Plus plan. To access that, of course, you will have to switch to the Pro plan. 

Pro Plan

As I mentioned, this Pro plan offers one free consultation with a CPA and assistance with your IRS audit +  all of the benefits of the previous tiers. 

Other than the different features each of these plans offers based on different user needs, it is worth noting that each is priced differently. You can refer to the table below to get a better idea of the prices and features of each plan.

Plan

Pricing

Features

Free

No subscription costs

This plan offers automatic sync with 70+ exchanges, NFT tax engine for Ethereum, DeFi tax engine for Ethereum, CSV upload for 400+ digital platforms, and current year tax forms for all TaxBit network partners.

Basic

$50/year

This plan offers all Free plan perks + current year tax forms for all other platforms and historical tax forms

Plus

$175/year

This plan offers all the perks of the Basic plan + custom support for CSV uploads, tax-loss harvesting portfolio performance Suite, and NFT suite tax optimization.

Pro

$500/year

This plan offers all the perks of the Plus plan, including IRS audit support and CPA review.

Security and Compliance

Undeniably, security is one of the crypto space's pillars, and TaxBit takes it seriously. Speaking of which, some key security features that make TaxBit one of the most reliable crypto tax software include: 

User Data Encryption 

To ensure the best user security, TaxBit encrypts all user data. This is a vital security approach because encrypted data is far more difficult to extract. Hence, you can rest assured that your personal information is protected even if hackers get access to the TaxBit data storage.

GDPR Compliance and Data Reduction

TaxBit gathers only the most essential personal data required for the business to provide its services in complete conformity with GDPR laws. Additionally, the company follows the "data minimization" approach, which focuses on collecting as little data as possible while reducing the amount of information you must disclose when using the software.

Two-Factor Authentication

Another key security factor TaxBit offers for added account security is two-factor authentication. This security feature allows you to add an extra layer of log-in procedures to ensure that only you can access the account. Every time you log in, you must confirm that it's you via email or phone.

TaxBit's User Experience 

Are you curious to know what TaxBit's past and present users have to say about the software? Well – for one – almost every user of TaxBit said that the software was really simple to understand and use. TaxBit simplifies the tax procedure for its consumers, from the signup process to generating tax documents and linking with other exchanges

So you can certainly count on the positive user feedback about TaxBit, stating that it is a user-friendly software with a simple interface. 

Besides these reviews, TaxBit also holds a 3.7 rating on a trusted review site like TrustPilot. Not to mention the 260 5-star reviews it has received out of 379 reviews. In fact, according to one of these 5-star reviews from a satisfied user, TaxBit maintains its positive reputation for offering the best integration/selection of exchanges, wallets, and API support. 

Most reviews also praise the standout customer service the TaxBit team offers to help solve user queries. All these reviews prove that TaxBit remains one of the most user-friendly, accessible, and reliable crypto tax software.

Pros and Cons of TaxBit

Pros and Cons

Pros
  • The software features a free plan
  • It is very easy to use
  • For all price plans, an unlimited amount of transactions can be imported.
  • It supports the integration of around 500 exchanges and automation features.
  • The Pro plan allows you to access free pre-prepared tax forms and a free CPA consultation.
Cons
  • TaxBit is only accessible through a web-based platform.
  • It is now only available to users that report their taxes to the US government.

Comparing TaxBit to Competitors 

As a crypto trader myself, I understand that tax calculation and reporting processes are very critical. You must be careful when calculating the tax associated with your trading profits and losses. So when choosing a crypto tax software that helps make tax reporting easier, it’s not smart to just choose the first option that comes to you. Instead, I suggest you opt for the best one available. 

Speaking of which, Is TaxBit really the best crypto tax software out there? The only way to find that out is by comparing it to some of its competitors. To help you with that, I have compared TaxBit with popular software like ZenLedger and CoinTracker in the table below.

Software

Free Version

Paid Plans

Availability

Accessibility

Transactions Import Limit

TaxBit

Yes

Ranges between $50-$500/yr

Mainly focuses on US users while being globally available.

It is only accessible through a web platform

Unlimited

ZenLedger

Yes

Ranges between $49-$999/yr

Mainly focuses on US users while being globally available.

It can be accessed through desktop, web platform, & mobile app. 

The free plan has a transaction limit of 25.

CoinTracker

Yes

€59 – Unlimited (custom plans are available: unspecified price)

USA, UK, Canada, Australia, and India.

It is accessible through the web platform & mobile app.

Like ZenLedger, CoinTracker’s free plan also has a transaction limit of 25.

Customer Support and Resources 

Having an active customer service team is one thing, and being easily accessible through various means is another. Sadly, TaxBit only excels in the former. Now, this doesn’t mean it doesn’t offer enough options to help you find answers to your queries. It actually does, through its FAQ section. However, the only drawback in TaxBit’s customer service I found was having only one means of contacting their team: email. 

Besides this drawback, I found that TaxBit also offers:  

  • A Demo Call: This is for organizations wishing to integrate TaxBit features into their crypto or web3 business to handle crypto-related taxation tasks better. When you fix a demo call, you are connected with one of the professionals at TaxBit to give you a thorough guideline. 
  • Help and Support: Here, you can find all the answers to your questions by navigating through how-tos, FAQs, and technical support sections. Personally, I was able to find all the answers and solutions a beginner and intermediate-level trader would want when using TaxBit.
  • Media & Press: This section contains the most recent news and updates on the software, allowing users to readily discover and utilize what's new at TaxBit. 

Conclusion 

From what I have explored, TaxBit is a high-performance crypto tax software that succeeds at what it does best: expediting the tax process. So, even though it doesn’t feature a mobile app for added user convenience, I believe the software compensates for this minor inconvenience with its extensive functionality, service, and support availability. 

Additionally, its emphasis on requiring limited user data and ensuring complete protection of this data is a plus when considering the reliability of TaxBit. So, if you're struggling with crypto tax-related tasks, TaxBit is one of the best crypto tax software out there. However, when using TaxBit, consider each plan it offers and only proceed with the plan that best fulfills your usage needs and budget.


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