Skip to main content

​
Overview

CryptoTally simplifies crypto tax preparation by automatically tracking fiat values, organizing transactions by category, and generating tax-ready reports. This guide covers best practices for using CryptoTally to prepare for tax season.
CryptoTally provides transaction tracking and reporting tools but is not tax software or tax advice. Always consult with a qualified tax professional or CPA for tax filing.

​
Tax Obligations for Crypto

​
When Crypto Is Taxable

In most jurisdictions, cryptocurrency transactions trigger tax obligations:

Income Events

  • Receiving payment for goods/services
  • Freelance/contractor payments
  • Salary paid in crypto
  • Mining or staking rewards
  • Airdrops

Capital Gains Events

  • Selling crypto for fiat
  • Trading one crypto for another
  • Using crypto to purchase goods
  • DeFi swaps
Tax treatment varies by country. The examples below primarily cover US tax treatment. Consult local tax authorities for your jurisdiction.

​
CryptoTally’s Tax Features

​
1. Automatic Fiat Valuation

CryptoTally records the fair market value in USD (or your chosen currency) at the time of each transaction using historical price data.

​
2. Income Categorization

Tag transactions as:
  • Customer Payment (Business income)
  • Salary (W-2 or contractor income)
  • Grant (Varies by grant type)
  • Interest/Yield (Investment income)

​
3. Expense Tracking

Categorize deductible expenses:
  • Vendor Payment (Business expenses)
  • Gas Fees (Transaction costs)
  • Software/Tools (Operating expenses)

​
4. Tax-Ready Reports

Export CSV files formatted for:
  • Tax software (TurboTax, TaxAct, etc.)
  • Accountant review
  • IRS reporting (Schedule C, Form 8949)

​
Preparing for Tax Season

​
Step 1: Tag All Transactions

Before generating tax reports, ensure all transactions are properly tagged:
1

Review Untagged Transactions

Go to Transactions → Filter by “Untagged”
2

Categorize Income

Tag all inflows:
  • Customer Payment
  • Salary
  • Grant
  • Interest/Yield
  • Other Income
3

Categorize Expenses

Tag all outflows:
  • Vendor Payment
  • Contractor
  • Gas Fees
  • Operating Expenses
  • Personal (if mixing personal/business)
4

Mark Transfers

Tag wallet-to-wallet transfers to avoid double-counting

​
Step 2: Review Fiat Values

CryptoTally automatically captures fiat values, but you should:
  1. Spot-check major transactions
  2. Verify values for large payments
  3. Flag any suspicious values for manual review
If a price seems wrong, you can manually override it in transaction details by clicking “Edit Fiat Value”

​
Step 3: Separate Personal vs. Business

If you mix personal and business transactions:
  1. Create tags: Business and Personal
  2. Apply appropriate tags to all transactions
  3. Generate separate reports for each

​
Step 4: Reconcile Wallet Balances

Before exporting:
  1. Go to Wallets page
  2. Compare CryptoTally balances with actual wallet balances
  3. Investigate any discrepancies
  4. Refresh wallet sync if needed

​
Generating Tax Reports

​
For US Freelancers & Contractors

Report Configuration:
  • Date Range: Full tax year (Jan 1 - Dec 31)
  • Tags: Customer Payment, Business Income
  • Direction: Inflows
  • Format: CSV
Export Includes:
  • Date received
  • Amount in crypto
  • Fiat value (income amount)
  • Customer/client (from notes)
  • Description
Tax Form: Schedule C (Part I - Income)
Report Configuration:
  • Date Range: Full tax year
  • Tags: Vendor Payment, Contractor, Software, Gas Fees
  • Direction: Outflows
  • Format: CSV
Export Includes:
  • Date paid
  • Vendor (from notes)
  • Amount
  • Category (from tags)
  • Description
Tax Form: Schedule C (Part II - Expenses)
For transactions involving selling or trading crypto:Report Configuration:
  • Date Range: Full tax year
  • Tags: Asset Sale, Swap, Trade
  • Format: CSV with cost basis
You’ll Need:
  • Date acquired
  • Date sold
  • Proceeds (sale price)
  • Cost basis (purchase price)
  • Gain/loss
CryptoTally currently tracks transaction history. Cost basis tracking and capital gains calculations are coming soon.

​
For Startups & Organizations

Track when crypto payments are received for accounting purposes:Report Configuration:
  • Tags: Customer Payment, Subscription, Grant
  • Direction: Inflows
  • Group by: Month
Use Case: Recognize revenue in appropriate accounting period
Document all business expenses paid in crypto:Report Configuration:
  • Tags: All expense tags
  • Direction: Outflows
  • Include: Attachments (invoices, receipts)
Use Case: Support deductions during audit
Track employee compensation paid in crypto:Report Configuration:
  • Tags: Salary, Payroll
  • Direction: Outflows
  • Group by: Employee (use notes)
Use Case: File W-2s or 1099s for employees/contractors

​
Tax Software Integration

​
TurboTax / TaxAct

  1. Generate CSV export from CryptoTally
  2. Open tax software
  3. Import CSV as business income/expenses
  4. Map CryptoTally tags to tax categories
  5. Review and finalize

​
QuickBooks / Xero (Manual Entry)

  1. Export monthly CSV reports
  2. Import as journal entries
  3. Map to chart of accounts:
    • Income → Revenue accounts
    • Expenses → Expense accounts
  4. Reconcile monthly
Coming Soon: Direct integrations with QuickBooks, Xero, and TurboTax for one-click import

​
Common Tax Scenarios

​
Scenario 1: Freelancer Paid in USDC

Situation: You received $50,000 in USDC payments from clients in 2024. CryptoTally Setup:
  1. Tag all client payments as “Customer Payment”
  2. Add notes with client names and invoice numbers
  3. Attach invoices as documentation
Tax Report:
  • Export: CSV with all Customer Payment transactions
  • Report shows: Date, Amount (USDC), Fiat Value ($50,000)
  • Tax Form: Schedule C, Line 1 (Gross receipts)

​
Scenario 2: Startup with Grant Funding

Situation: Organization received $100,000 grant in ETH, spent on development. CryptoTally Setup:
  1. Tag grant receipt as “Grant Funding”
  2. Tag all grant-related expenses with “Grant Expense”
  3. Use dedicated wallet for grant funds
Tax Report:
  • Export: PDF Audit Report showing:
    • Grant receipt transaction
    • All expenses paid from grant wallet
    • Attached receipts and invoices
  • For Auditor: Proof of proper fund usage

​
Scenario 3: Multi-Wallet Business

Situation: Company uses 3 wallets across Ethereum and Polygon. CryptoTally Setup:
  1. Add all wallets with labels (Treasury, Operations, Payroll)
  2. Tag transactions consistently across wallets
  3. Mark internal transfers between wallets
Tax Report:
  • Export: Consolidated CSV across all wallets
  • Exclude: Internal transfers (to avoid double-counting)
  • Result: Clean income and expense summary

​
Record Keeping Best Practices

Keep Records for 7 Years

The IRS recommends keeping tax records for at least 3 years, but 7 years is safer for crypto transactions.

Attach Supporting Documents

Upload invoices, receipts, and contracts to CryptoTally for each transaction. This creates a digital audit trail.

Document Unusual Transactions

Add detailed notes for large or unusual transactions explaining the business purpose.

Export Annually

Even if you don’t need it immediately, export a full-year report at year-end and archive it securely.

​
Tax Deductions for Crypto Businesses

​
Potentially Deductible Expenses

If you run a business that accepts crypto:
  • Gas fees on business transactions
  • Exchange fees for converting crypto to fiat
  • Accounting software (including CryptoTally!)
  • Professional fees (CPA, tax advisor)
  • Hardware wallets for business security
  • Blockchain infrastructure (RPC nodes, APIs)
Personal expenses are not deductible. Only business-related crypto expenses qualify.

​
Working with a CPA

​
Preparing for Your CPA Meeting

  1. Generate Annual Report from CryptoTally (full year, all transactions)
  2. Export CSV with all columns enabled
  3. Gather Supporting Docs:
    • Bank statements showing fiat conversions
    • Invoices for major transactions
    • Wallet address verification
  4. Organize by Category:
    • Income by type (business, freelance, investment)
    • Expenses by category
    • Capital gains/losses (if applicable)

​
Questions Your CPA May Ask

CryptoTally uses CoinGecko API for historical price data at transaction time.
Yes, you can sign a message with your wallet or show transaction history on blockchain explorers.
CryptoTally syncs automatically, but you should reconcile balances to ensure completeness.
Tag as “Transfer” to exclude from income/expense calculations.

​
Sharing Data with Your CPA

  1. Generate PDF or CSV report
  2. Share via secure method:
    • CPA’s client portal
    • Encrypted email
    • Secure file sharing
  3. Provide CryptoTally export along with:
    • Blockchain explorer links
    • Bank statements
    • Invoices/receipts

​
International Tax Considerations

  • Crypto is property (not currency) for tax purposes
  • Subject to capital gains tax
  • Business income taxed as ordinary income
  • Report on Form 8949, Schedule C, or Schedule D
  • Tax treatment varies by country
  • Some countries tax as income, others as capital gains
  • VAT may apply to certain transactions
  • Consult local tax authority (HMRC, Finanzamt, etc.)
  • HMRC treats crypto as assets
  • Capital Gains Tax applies to disposals
  • Income Tax for mining/staking/airdrops
  • Annual CGT allowance (£3,000 for 2024/25)
  • 30% tax on crypto gains (Section 115BBH)
  • 1% TDS on transactions above ₹10,000
  • No deduction for expenses (except acquisition cost)
  • Report on ITR forms
CryptoTally supports multiple currencies. Set your preferred currency in Settings → Preferences

​
Common Mistakes to Avoid

❌ Not tracking every transaction - Even small amounts are taxable ❌ Forgetting gas fees - These are deductible business expenses ❌ Double-counting transfers - Mark wallet-to-wallet moves as “Transfer” ❌ Missing documentation - Attach invoices and receipts ❌ Using wrong cost basis - Track when you acquired crypto (coming soon in CryptoTally) ❌ Waiting until April - Start organizing transactions throughout the year

​
Tax Season Checklist

1

Review All Transactions (January)

  • All transactions tagged
  • Notes added for major transactions
  • Attachments uploaded
  • Balances reconciled
2

Generate Reports (February)

  • Income report (all inflows)
  • Expense report (all outflows)
  • Capital gains report (if applicable)
  • PDF summary for CPA
3

Organize Documentation (February)

  • Bank statements
  • Invoice copies
  • Wallet ownership proof
  • CryptoTally exports
4

Meet with CPA (March)

  • Share reports and documentation
  • Answer CPA questions
  • Clarify unusual transactions
  • Review draft return
5

File Taxes (April 15)

  • Submit tax return
  • Archive all documents
  • Export final CryptoTally report
  • Set reminder for next year

​
Resources

​
Official Tax Guidance

​
Tax Software

  • TurboTax Crypto: Crypto-specific tax filing
  • CoinTracker: Comprehensive crypto tax software
  • Koinly: Tax reports for 20+ countries
  • TaxBit: Enterprise crypto tax solutions

​
Next Steps

Generate Reports

Create tax-ready CSV exports

Join Community

Ask tax questions in our Discord