BearTax is a powerful crypto tax tool that helps streamline the collection of crypto trade data when submitting a tax return. Check out our review below.
Filing a tax report is a complicated task for anybody that generates an income. Calculating the tax impact of cryptocurrency trading, however, can be far more stressful. Whether you’ve made losses or gains over the last year of trading, it’s certain that that ATO is going to want to know about it — which means keeping fastidious records of every single cryptocurrency trade.
There are many factors that can influence your cryptocurrency trading tax filing. These factors can include the total number of trades you’ve completed over the year, the number of different cryptocurrencies you own, and the various different exchanges you use to trade. Accumulating, sorting, and submitting all of this information can be an extremely time-consuming process.
One of the simplest and most effective methods of generating a cryptocurrency trading tax report is to use a third-party crypto tax platform. These platforms perform all of the heavy lifting and number crunching necessary to compose a report and significantly minimise the likelihood of errors.
In this review, we’ll take a look at BearTax, an extremely straightforward and easy to use crypto tax platform.
What is BearTax?
BearTax is a simplified crypto tax platform that is designed to take the hard work out of filing a cryptocurrency trading tax report. BearTax allows users to import transactions and balances from over 40 different exchanges and consolidates them into a single data set.
After collecting all of the disparate trades made by traders, BearTax then allows traders to calculate their capital gains in a few simple steps. The most impressive feature of BearTax is the way in which it autonomously gathers trade data though a smart matching algorithm that matches deposits and withdrawals across exchanges. The matching algorithm also allows users to review sources before finalizing calculations.
What Does BearTax do?
BearTax provides traders with two different methods of capturing trade data. API connection options are available for multiple exchanges, which streamlines the data collection process. It’s also possible, however, to upload transaction reports in CSV or Excel format for the more security-minded or for traders using exchanges for which API support is unavailable — including decentralized exchanges.
The list of exchanges supported by BearTax includes Coinspot, BTCMarkets, Independent Reserve and Binance. Importantly, BearTax is capable of supporting an extremely high volume of transactions, making it ideal for traders using HFT bots or professional traders.
The tracking abilities delivered by BearTax provides traders with a complete trial of gain/loss data paired with root transactions, and allows users to download capital gains and losses in PDF format.
Is BearTax Safe?
Cryptocurrency allows users to be their own bank — which also places the security of their capital under their control. This makes many traders extremely wary of any platform that is able to access exchange data.
BearTax doesn’t ask users for private key data for any wallets used in the auditing process — the smart matching algorithm used by BearTax to collect trade data integrates with major exchanges via read-only API key access. Importantly, these keys aren’t stored, and are only used in the collection process then deleted immediately after.
How Much Does BearTax Cost?
Considering the amount of time the BearTax trade data collection process saves on crypto trading tax report generation, the fee structure offered by the platform is relatively attractive. BearTax plans start at just $0.99 per annum — while this plan delivers email support, unlimited exchange support, and gain/loss statement functionality, it is limited to just 20 transactions, which is not ideal for regular traders.
Functional BearTax plans start at $29.99/year, which provides support for 200 transactions, ranging up to $199.99/year for unlimited transactions.
Why Engage a Third Party for Your Crypto Tax?
It is possible to perform your own data collection and gains/loss calculation for crypto trading. Depending on the amount of trades you’ve made in a financial year, however, the amount of data you’ll need to collect and organize can be extremely long. This potentially creates situations in which you may overpay tax due to poor record keeping.
Platforms like BearTax are streamlined, cost-effective solutions that save a significant amount of time in the tax preparation process, and ensure that every single transaction is captured with virtually no error.
If you need assistance in getting advice & for tax planning around your crypto tax return please reach out to our team.