The global economy is inevitably transitioning from an analog to a digital ecosystem. We are moving towards a paperless future as digital transactions take over the financial system. Amidst this transition, the most promising new technology is cryptocurrency.
Unlike traditional currencies, cryptocurrencies are not regulated by central banks. They are a digital mode of payment that uses encryption techniques for generating, exchanging, and transferring value. Each unit of the currency is known as a coin or token.
Financial transactions made through cryptocurrencies are made possible with highly complex algorithms. These algorithms are used for the verification of asset transfer and to control the supply of the cryptocurrency. Instead of being issued by a government authority, cryptocurrencies use a public ledger, typically called a blockchain. The blockchain records all transactions within a currency’s ecosystem.
The last few years have brought cryptocurrency a significant amount of attention from investors, media, analysts, economists, politicians, and the general public. There is a multitude of good reasons why crypto has become a major talking point on a wide variety of forums. From being easily accessible to being fraud-proof and bringing a significant decrease in identity theft, cryptocurrencies offer versatility that other modes of payment do not.
In the United States and many other countries, tax authorities recognize crypto as a taxable asset, but for many, it can be unclear how exactly to calculate and report cryptocurrency taxes. As a result, crypto tax services have become a vital part of the crypto ecosystem.
TOKENTAX – THREE- STEP SOLUTION TO CRYPTO TAXES
Many crypto tax platforms miss the idea of why users need the service in the first place. Instead of prioritizing what matters the most, they bombard the users with every little detail of the process, lack understanding of specific user needs, and do not design user flows using basic UI principles. This is why TokenTax has grown popular in the cryptocurrency space, due to its understanding of what the crypto users need.
Based in New York City, TokenTax is a crypto taxation software platform and accounting firm. It was founded by Alex Miles and Zachary McClure in December 2017. The main purpose behind creating TokenTax was to provide users a tool to help them understand their tax liability and how they can file their crypto-related taxes.
The platform works in three steps:
- It imports the user’s transaction data from any exchange like Coinbase and Binance.
- It calculates the user’s tax liability using FIFO, LIFO, and their proprietary Minimization algorithm and displays it in a clean interface.
- You can then export Form 8949 for people filing in the US. It also has an international gain/loss report that works with any tax authority worldwide.
As of today, TokenTax is one of the leading crypto tax agencies operating worldwide due to its easy-to-use interface, affordability, and accessibility.
TOKENTAX- THE EASIEST TOOL FOR TAX FILING
Most people refrain from filling cryptocurrency tax returns because of a lack of knowledge – the tax process can seem daunting and complex. Every sale of crypto must be matched with an initial buying price, and every transaction must be reported via its fiat market value.
Fortunately for all crypto users, TokenTax makes the process easier. It educates users on best tax practices and helps them save money. It is also one of the few tax return apps that offer full tax return filing services as well.
To help users fulfill tax reporting requirements, TokenTax automatically imports the crypto trading history of the user and automatically creates the 8949 Form (for US filers) or a gain/loss report (for international filers). These forms are used for reporting capital gains on tax returns.
Another key feature of TokenTax that sets it apart from other firms is the level of connectivity it has with all major crypto exchanges. All the application requires is a connection via an API or CSV of its user’s exchange of choice to track the capital gains and losses along with their tax implications.
TokenTax supports all international exchanges and provides reports for different accounts. It can generate every type of cryptocurrency tax report based on the user’s needs. Forms include the 8949, the FBAR, a crypto income report (for mining or staking), and any other necessary documents for users to file. TokenTax is also used by cryptocurrency businesses and funds for investment reports, invoicing, payroll, and tax-loss harvesting.
Today, TokenTax has established a community of satisfied customers due to its exceptional service. To provide quality services and to put the needs of users first, the platform is rapidly increasing in popularity.