TaxBit, a Utah-based firm, launched its tax reporting software in January 2019. And ever since, it has made its way to the thick of the crypto taxation conversation by offering topnotch services to crypto practitioners looking to find a fast and efficient way to report taxes. In this review, we will explore the TaxBit platform, gauge its efficacy, and discuss its strengths and weaknesses.
What Is TaxBit?
TaxBit is a tax reporting tool essentially created for crypto participants who are finding it difficult to track their transactions and calculate their taxes. Unlike many of the crypto tax software out there, TaxBit claims to have added contributions from blockchain Certified Public Accountants (CPAs) and tax attorneys when creating its products. This beats the common trope where tax software development teams are made up of only developers. By involving experts, TaxBit can ensure that users get to comply with existing tax regulations and stay updated on future modifications.
Owing to its decision to allow reasonable inputs from crypto tax experts, TaxBit, therefore, can provide full cryptocurrency audit trails to their clients. With this, users can access an extensive breakdown of cost basis and capital losses/gains calculations in the event of a CPA or IRS investigator-induced tax audit.
Also, the software avails an automated way of calculating and reporting taxes. It oversees the synchronization of transaction data, the calculation of gains and losses, and claims capital losses while it is at it. To do this, the software avails an API integration system, which automates the importation of transaction data from crypto exchanges and wallets in a matter of seconds and runs your data through the appropriate tax codes applicable to your jurisdiction.
Note that the information garnered on the platform’s website suggests that the TaxBit software solely caters to crypto practitioners in the U.S. and would use IRS tax codes as guidelines for its tax reporting operations. Extensive research revealed that the platform is looking to extend its services to other countries like the UK, Canada, and Australia. However, as of now, the platform focuses on IRS guidelines for reporting crypto tax, and it even offers to help users draft IRS letters and download tax forms.
Another interesting detail regarding the efficacy of TaxBit tax software has to do with its integration system. At the time of this review, TaxBit supports 4,200 cryptocurrencies/commodities/equities, a broad array of crypto exchanges/wallets, and all fiat currencies. Hence, users can automatically link their crypto exchange/wallets to the TaxBit platform via APIs and process all of the transactions they had authorized. In rear cases where TaxBit does not support an exchange, you could capitalize on the software’s automatic CSV conversion tool. Nonetheless, as noted in the guide for this review section, API integration is the ideal choice. Therefore, verify that TaxBit supports your exchange before subscribing to any of its plans.
Besides, you can access a real-time portfolio tracking tool for the exchanges and wallets that TaxBit supports. This tool avails on-the-spot calculation of tax rates for each transaction authorized on the third-party platforms, which is an ideal way to monitor how your crypto activities affect your tax liabilities.
Having highlighted the main services and features available to TaxBit users, let’s discuss its pricing system.
TaxBit’s Subscription Plans
TaxBit has three subscription plans. The first is the $50 per year basic plan, which provides subscribers with a tax reporting service for 250 transactions and 10 exchanges/wallets. Likewise, users can only download one tax form. The second plan, named Plus, has a price tag of $175 per year, as it offers tax reporting services for 2,500 transactions and provides users with an unlimited number of supported exchanges and wallets. Unlike the basic plan, subscribers of the Plus plan can download all tax forms from 2014 to 2019.
Whereas, the Pro plan, priced $500 a year, lets users process 25,000 transactions from unlimited data sources. Likewise, subscribers have access to tax forms from 2014 to date and are eligible for a CPA audit. It is worth mentioning that TaxBit offers free trails and an incentive program rewarding users who refer new clients.
What Are the Pros of TaxBit?
Premium User Experience and Website Design
TaxBit was thoughtful enough to implement a simple, slick, and mobile-friendly website design that improves user experience. Needless to say, navigating the site as well as accessing features and service portals was very easy while researching the website.
It Supports A Broad Array of Coins and Platforms
A Tax software product requires sophisticated integration systems for it to serve its purpose efficiently. Knowing fully well that this is a vital standard, the TaxBit team has, therefore, chosen to incorporate a robust synchronization tool that takes only about a minute to import transaction details from third-party websites. It also helps that TaxBit supports 4,200 assets and has a real-time portfolio tracking tool for users who want to see how each transaction they execute impacts their tax liabilities.
Higher Conformity with Tax Regulations
The team had indicated its seriousness in facilitating an accurate tax reporting system when it welcomed insights from blockchain CPAs and tax attorneys while designing TaxBit. This move has given it an edge over a majority of tax software products, as it runs data through carefully analyzed tax codes to ensure the compliance of reports to existing rules. With this in place, it is easy to provide a full cryptocurrency audit trail to users.
Customer Support Is Topnotch
Although TaxBit segments its customer support channels to users according to the plan they choose, there is, however, no reason to believe that this support model limits the chances of users to access help as at when due.
The Team Constantly Communicates Crypto Tax Updates
While noting that the crypto tax regulation in the U.S. is still in its formative state, the TaxBit team has made it its responsibility to update users, via the website’s blog, on happenings in the crypto tax scene and how they affect their tax obligations.
What Are the Cons of The TaxBit Platform?
Its services are limited to people in the U.S.
At the moment, TaxBit is far from being a global tax reporting brand, as its services are tailored to the jurisdiction where IRS rules prevail. In other words, the platform is not ideal for users located in regions with different crypto tax frameworks.
After reviewing the entirety of the TaxBit platform, we discovered that it implements a viable tax reporting business that puts its users’ needs above every other thing. As such, it is only fair that we mentioned this crypto product on our site and offer our readers a comprehensive review of its features and services.