Home » Evaluating Koinly and Crypto Accounting Solutions: What You Need to Know

Evaluating Koinly and Crypto Accounting Solutions: What You Need to Know

Choosing the right tool for crypto accounting is crucial for managing digital assets effectively. As cryptocurrencies become more integrated into business operations, the need for specialized accounting software grows.

This article explores Koinly, a popular crypto tax software, and compares it with other comprehensive accounting solutions.

Importance of Choosing the Right Tool for Crypto Accounting

Crypto accounting software helps businesses and individuals manage their digital assets, ensuring compliance with tax regulations. While Koinly is well-known for its tax reporting capabilities, it is critical to understand its strengths and limitations.

Crypto Tax Software vs. Crypto Accounting Software.
Disclaimer: Crypto tax software like Koinly focuses on tax calculations and reporting. In contrast, crypto accounting software offers broader functionalities, including financial reporting and audit support, essential for businesses handling large volumes of transactions.

The Data Problem With Crypto Taxes

Crypto taxes can be an absolute minefield, especially for newcomers. There is no “one rule” to govern all transactions, and crypto is classified differently across various countries. Some jurisdictions classify crypto as property, while others consider it a commodity or “intangible property.” These classifications affect whether the tax is treated as capital gains or income.

For businesses, the complexity increases when dealing with cryptocurrencies for services, payments, or trading. Each activity introduces new tax challenges. Additionally, different ways to earn profit from crypto, such as selling for fiat, exchanging on DEXs, receiving airdrops, selling NFTs, staking, providing liquidity, or using lending platforms, all have unique tax implications.

Tracking the fiat value at each transaction point is crucial, but difficult without proper tools. The problem with crypto taxes is their complexity and the multitude of factors to consider. These distinctions determine the tax liability for each transaction, highlighting the need for reliable crypto tax software like Koinly to simplify and accurately manage the process.

Why Do You Need Crypto Tax Software Like Koinly?

Using tax software like Koinly is essential for managing these complexities. Cryptocurrencies involve numerous transactions, including buying, selling, staking, and trading across multiple platforms. Each transaction may have unique tax implications.

Software like Koinly simplifies this by automatically importing and tracking transactions, calculating capital gains, and generating tax reports that are compliant with regulatory standards according to different supported locations. This ensures accurate tax filing, helps avoid penalties, and saves time.

Is Koinly Trustworthy?

Koinly has earned a strong reputation for its reliability and user satisfaction. User reviews highlight its ease of use and robust security measures. With over 1.6k reviews on Trustpilot, Koinly has proven to be a trusted platform​​.

Scammers Warning
Be aware that scammers and phishing attempts have targeted Koinly’s popularity. There have been complaints about fraudsters pretending to represent Koinly, asking for payments to file taxes. Koinly is a SaaS platform and will never ask you to send crypto to them. All data shared with Koinly is mainly via read-only API and public addresses. Never share your private keys or send money outside of the subscription plan. Always verify you are on the official Koinly website before sharing any information.

Is Koinly Legit?

Koinly is fully compliant with regulatory standards in over 20 countries, including the US, UK, and Canada. It supports tax forms required by various jurisdictions, making it a legitimate choice for individual crypto tax reporting​​.

Should I Use Koinly?

Koinly is a popular choice for cryptocurrency tax reporting and portfolio tracking for individuals, but is it the right tool for you? Let’s explore its features, benefits, and some user feedback to help you decide.

Ideal Use Cases, Features, and Limitations

Koinly is best suited for individuals and small investors who need to manage their crypto taxes and track their portfolios. The platform offers several features that make it attractive:

  • Automated Transaction Imports: Koinly can sync with over 350 centralized exchanges and 50 wallets, making it easy to import your transactions.
  • Real-time Portfolio Updates: Users can see their portfolio’s value and performance in real-time.
  • Comprehensive Tax Reports: Koinly generates tax reports compatible with IRS forms, as well as other international tax formats.

However, Koinly has its limitations. It is primarily a tax and portfolio tracker and may not meet the needs of larger businesses requiring full-fledged accounting ledger features.

Can You Use Koinly For Free?

The free plan offers valuable insights, while paid plans provide detailed tax documents. Is Koinly’s free plan any good?

Is Koinly Compatible With TurboTax?

Koinly supports TurboTax, and you can import data directly from the Koinly website. However, remember that Turbotax only allows a total of 1,000 transactions.

User Reviews: What Do Users Like About Koinly?

Koinly has received mixed reviews from users. While some appreciate its ease of use and comprehensive tax reporting features, others have encountered issues with customer service and software limitations.

Key Positive Reviews:

  • Good Overall Performance: Users appreciate Koinly’s performance compared to other similar services, despite some areas needing improvement.
  • Easy to Use: The platform is user-friendly, and tutorials make tax reporting straightforward.
  • Effective for Small Investors: Small transaction investors find Koinly efficient for managing their crypto taxes and tracking portfolios.

Real User Review of Koinly in TrustPilot "The process was mostly simple. Warnings and Turbotax import could be clearer"
Check out this Real User Review of Koinly in TrustPilot

Real User Review of Koinly in TrustPilot "Good enough"
Check out this Real User Review of Koinly in Trustpilot

What Are Users Complaining About Koinly?

Some users find Koinly’s pricing plans expensive, especially for frequent traders. The free version lacks official tax report generation, and there is limited support for NFTs【108†source】

Key Negative Reviews:

  • Customer Service Delays: Users report dissatisfaction with the slow response time from customer service.
  • File Import Limitations: Some users encountered issues with file size limits and lack of API connections.
  • Accuracy Concerns: A few users found inaccuracies in Koinly’s accounting, leading to potential legal liabilities.

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Real User Review of Koinly in TrustPilot "Buyer Beware"
Check out this Real User Review of Koinly in Trustpilot

Real User Review of Koinly in TrustPilot "Koinly fell short on first impression"
Check out this Real User Review of Koinly in Trustpilot

Is Koinly Better Than CoinTracker?

When comparing Koinly and CoinTracker, several factors come into play. Both platforms offer robust features, but each has its strengths and weaknesses.

Feature Comparison Table

FeatureKoinlyCoinTracker
Ease of UseUser-friendly interfaceSimple interface, but can be complex
Tax ReportingExtensive, supports multiple jurisdictionsComprehensive, includes NFT tracking 
Portfolio Tracking Real-time updatesReal-time updates
PricingFree to $279 per yearFree to $599 per year
Customer SupportLive chat, email support, detailed guidesEmail support, detailed guides
API IntegrationsSupports 350+ exchanges Supports 300+ exchanges

Alternatives to Koinly for Complete Crypto Accounting

For businesses seeking complete accounting solutions, other platforms may offer more comprehensive features:

  1. Cryptoworth: Designed for businesses to streamline their financial close, multiple calculations, and run automatic detailed financial reporting for audit-readiness clarity. It has received multiple awards for its outstanding quality and speed of support.
  2. Softledger: Provides a traditional main ledger and has an extra paid add-on to support a restricted amount of blockchains and exchanges.
  3. Blockpit: The company offers a platform that transforms data from decentralized finance, custody, over-the-counter trading, and exchanges into auditable records for accounting, treasury, and tax filings.

Conclusion

Choosing the right crypto accounting tool depends on your specific needs. Koinly is excellent for tax reporting and portfolio tracking but may fall short for businesses requiring full-fledged accounting services. For comprehensive management of digital assets, consider platforms like Cryptoworth. Evaluate your needs and choose the tool that best supports your financial operations and compliance requirements.

For more detailed reviews and user experiences, refer to the sources used in this article.

Sources

– “Koinly Review 2024: Pros, Cons & How It Works.”

– “How pricing works on Koinly – Koinly Help Center.”

– “Calculate Your Crypto Taxes With Ease – Koinly.”

– “Tax Plans and Pricing – Koinly.”

– “Koinly Review 2024: Pricing, Plans, and Tax Features.”

Cryptoworth

Cryptoworth, a leading crypto accounting software that helps web3 accountants speed up month-end closing.

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