ZenLedger Review | Crypto Tax Software With Hundreds Of Integrations

If you happen to’re a frequent cryptocurrency investor, precisely submitting your taxes will be difficult. For starters, you need to report capital beneficial properties from crypto trades. And issues like mining earnings, gasoline charges, and staking rewards solely complicate issues.

Fortunately, tax software program like ZenLedger focuses on cryptocurrencies and NFTs. If you happen to want help with monitoring your crypto beneficial properties, its paid plans may definitely assist. ZenLedger even integrates with TurboTax that can assist you correctly file your taxes.

However ZenLedger plans can get costly. And a few options are extra helpful than others relying on how typically you commerce. That’s why our ZenLedger evaluate is overlaying the primary options, pricing, and easy methods to resolve if this crypto tax software program is the proper selection for you.

ZenLedger is likely one of the hottest cryptocurrency tax software program choices on the market at present. The corporate started in 2017 and operates out of Washington state. In accordance with its web site, ZenLedger goals to “simplify DeFi, NFT, and crypto taxes for buyers and tax professionals.”

In 2014, the IRS started treating digital currencies like property. This implies anybody who offers with cryptocurrency has to think about tax implications. That is very true in the event you make frequent trades or earn further earnings from sources like cryptocurrency mining.

Like conventional tax software program, the benefit of utilizing ZenLedger is that it consolidates all your cryptocurrency transactions and efficiency so you have got an correct image when submitting your taxes.

When you have capital gains from cryptocurrency buying and selling or wish to offset your taxes by tax-loss harvesting, software program like ZenLedger is extremely helpful due to its number of tax options.

ZenLedger integrates with over 400 cryptocurrency exchanges, 40 blockchains, and 30+ DeFi protocols. This implies you may import your transaction historical past and holdings from varied exchanges, wallets, and crypto tasks into your ZenLedger dashboard.

A few of ZenLedger’s most notable integrations embody:

When you import your crypto transactions and holdings, your dashboard breaks down portfolio efficiency and value-per-holding. If you happen to pay for ZenLedger, you may dive a bit deeper into market and portfolio efficiency throughout totally different timeframes.

General, this offers a fast snapshot of how your cryptocurrency investments are doing.

Nonetheless, ZenLedger isn’t a devoted crypto portfolio tracker by any means. If you happen to’re in search of a complete portfolio tracker for stocks and crypto, software program like Kubera is certainly superior.

Associated: Best Portfolio Analysis Tools Of 2022

The primary purpose it’s best to contemplate ZenLedger is its downloadable tax studies. Since ZenLedger can import all your transaction information, it’s capable of shortly calculate further earnings in addition to capital beneficial properties and losses.

The primary tax types ZenLedger presents embody:

• IRS Schedule 1: ZenLedger calculates further crypto earnings from sources aside from wages, dividends, and curiosity.
• IRS Schedule D: With ZenLedger’s crypto tax calculator, you may calculate your capital beneficial properties and losses from crypto for the 12 months.
• IRS Type 8949 (Gross sales & Different Tendencies): This type helps you to report the precise date you acquired and bought totally different digital currencies. ZenLedger calculates proceeds from gross sales and in the event you incurred beneficial properties or losses.

ZenLedger additionally helps three value foundation strategies: First In First Out (FIFO), Final In First Out (LIFO), and Highest In First Out (HIFO). Your tax middle tab tracks taxable crypto earnings from quite a lot of sources, together with:

• Airdrops
• Dividends
• Forks
• Items
• Curiosity from crypto financial savings accounts
• Mining
• Miscellaneous rewards
• Staking

General, ZenLedger helps you to save time and enhance accuracy when submitting your crypto taxes. If you happen to’re a newbie investor or don’t commerce frequently, software program like ZenLedger probably suffices. Nonetheless, buyers with massive portfolios and quite a lot of cryptocurrency and DeFi exercise ought to nonetheless contemplate consulting a tax skilled.

One other helpful ZenLedger function is its tax-loss harvesting software. Tax-loss harvesting entails promoting property at a loss to offset capital beneficial properties to decrease how a lot you pay in taxes. The concept is to interchange the property you bought at a loss with comparable property so your portfolio composition stays the identical.

For instance, as an example you obtain $10,000 of Bitcoin because it was peaking at over $65,000. If Bitcoin’s value dropped and also you incurred a $4,000 loss, you can dump your BTC to understand that loss, utilizing the $4,000 to offset different taxes.

The deadline to understand crypto losses in December thirty first, so tax-loss harvesting is mostly an end-of-year strategy. And with ZenLedger’s tax-loss harvesting software, you get a whole overview of your unrealized beneficial properties, losses, and what quantity of cash you must promote to maximise loss.

This function isn’t too helpful for small portfolios since you’re going to incur buying and selling charges if you repurchase the crypto you dump. In the end, these charges reduce the influence of tax-loss harvesting and may even value greater than you find yourself saving on taxes.

However for bigger portfolios, tax-loss harvesting can offset as much as $3,000 in taxable earnings per 12 months, which is critical.

ZenLedger’s Grand Unified Accounting software exports a spreadsheet of all your transaction historical past throughout totally different exchanges and wallets. This features a line-by-line breakdown of:

• Transaction dates and which trade you used
• Cryptocurrencies concerned
• Transaction worth
• Buying and selling charges
• Lengthy-term and short-term capital beneficial properties

Your spreadsheet additionally consists of calculated tax. If you happen to’re working with a CPA to file your taxes, sending over this consolidated data is useful.

One of many predominant weaknesses of many crypto tax softwares is a scarcity of DeFi integrations. Sure, crypto tax software program covers hottest exchanges and wallets. However what in the event you stake, lend, or commerce with varied decentralized exchanges?

ZenLedger isn’t good on this entrance, however supporting 30+ DeFi protocols is best than rivals like CoinTracker, which helps 4 protocols. Notable DeFi protocols ZenLedger helps embody:

• AirSwap
• PancakeSwap
• ParaSwap
• SushiSwap
• Uniswap
• 1inch

DeFi integrations aren’t as essential in the event you solely commerce on centralized exchanges like Coinbase or Gemini. However in the event you’re diving down the DeFi rabbit gap, know that crypto tax software program has some catching as much as do.

ZenLedger integrates with TurboTax, so that you import all your transaction data into TurboTax in the event you’re submitting taxes your self. You too can invite your accountant to hitch your ZenLedger account, and there’s an expert tax suite aspect of the enterprise to assist CFAs handle purchasers.

ZenLedger even presents paid tax professionals in the event you want help. This isn’t one thing each crypto tax software program presents. Listed here are the three plans and their pricing:

• Session: $195 for a 30 minute name
• Single-Yr Tax Report: Begins at $2,500 per 12 months
• Multi-Yr Tax Report: Begins at $4,500 per two years

NFTs and DeFi help is included with these plans. Nonetheless, pricing depends upon your tax scenario, and complicated returns are most likely increased than these beginning costs.

ZenLedger’s free plan helps you to import and combination cryptocurrency transactions. You additionally get a fundamental portfolio monitoring dashboard. Nonetheless, viewing and downloading tax studies and utilizing tax-loss harvesting or unified accounting requires a paid plan.

Right here’s how ZenLedger’s varied plans evaluate when it comes to options and annual pricing:

Transaction limits and DeFi, staking, and margin buying and selling are the primary restrictions with the Starter plan. Newbie cryptocurrency buyers can most likely stick to Starter, however common merchants or anybody utilizing DeFi protocols wants Premium.

As talked about, cryptocurrency tax software program nonetheless has some catching as much as do. This isn’t stunning given how quickly the world of DeFi adjustments. This additionally implies that, proper now, it’s onerous to select a transparent winner within the crypto tax software program market.

That stated, ZenLedger stacks up effectively towards the competitors on account of its variety of integrations. Right here’s how ZenLedger compares with CoinTracker and CryptoTrader.tax, two different well-liked crypto tax software program platforms.

ZenLedger and CryptoTrader.Tax are two of our favorites, particularly since each help over a dozen DeFi protocol integrations. CryptoTrader.Tax integrates with TaxAct, however ZenLedger has extra trade and pockets integrations, so evaluate every choice to search out what’s best for you.

ZenLedger helps you to create an account along with your electronic mail deal with or by connecting by Coinbase or Google. Your complete signup course of takes underneath a minute or two.

When you join, you need to join a pockets, trade, or DeFi protocol to your ZenLedger account so it may well import transaction information. You may manually add transaction data with a CSV or the handbook entry software in the event you don’t wish to join ZenLedger with any accounts.

ZenLedger is protected and safe since you by no means present your non-public pockets keys when connecting your exchanges and wallets. Moreover, ZenLedger has read-only entry to your transactions.

ZenLedger additionally states it encrypts buyer information and avoids personally identifiable data as a lot as doable to assist enhance safety.

There are two methods to contact ZenLedger’s buyer help. Firstly, you may electronic mail ZenLedger at whats [email protected] for same-day help for non-urgent questions. Alternatively, textual content or name (877) ZEN-TAXS from 9am to 9pm EST, Monday by Friday.

If you happen to personal digital currencies, you must report that truth to the IRS. However how tough this reporting is depends upon your portfolio, buying and selling fashion, and record-keeping.

Software program like ZenLedger is well value its annual value if it saves you time and helps you file taxes precisely. Moreover, instruments like tax-loss harvesting can assist you get monetary savings by offsetting capital beneficial properties.

In the end, in the event you want a serving to hand with crypto taxes or frequently commerce, software program like ZenLedger is value it. If you happen to solely have just a few cryptocurrency transactions, you may attempt submitting taxes your self by utilizing software program like TurboTax earlier than paying for devoted crypto tax software program.