Easily connect your Exchanges to a Cryptotax Tool (USA)
You hate it, everybody hates it. No proper guidance, no one knows what to do or how to do it. You’re scared for your security and the government keeps pushing you to file your crypto gains. What do you need to do?
In this article, you will learn:
- How to connect your APIs to www.accointing.com, a crypto tax tool that offers more than JUST a crypto taxation software.
- What do I need to get from my exchanges and in what format in order for me to do report my taxes
- How should my output look like and how do I give this to my accountant
So before you get overly frustrated (because it will happen), we need to let you know that tax regulations are still changing. There are some things that are very clear and there are still some that are not. Some few examples:
- How do you handle Margin Trading?
- How do you deal with Airdrops that you didn’t want?
- What do you report if you lost your keys?
- How about DeFi transactions?
And even though this is all still under review, here’s how you can start:
Create an Account in a Crypto Tax Tool
Why? Well, on the one hand, it will save you tons of money on CPA hourly fees and on the other hand it will save you tons of time to spend on whatever you like doing. How? You’re either keeping track of all your buy/sell dates with their cost basis in an Excel sheet right now or you will request a CSV from your exchange and transform that into another Excel file which you’ll have to manipulate to add it to a tax tool which then your CPA will have to try to figure out if you have all the data needed or not. I suggest you start now (try www.accointing.com -we make it fairly simple)
Import your Exchanges, Wallets or Whatever other Transaction Files You Might Have
Just download your CSVs and directly import them to the platform. Sounds easy, but it’s not. I’ll tell you right now that it’s not. All exchanges work differently: they will provide different date formats, cost basis, column name, description type, fee handling, and the list can go on. There are some exchanges that will only provide a transaction of history of 3 months back and you have to make direct requests to get them. We offer you the option to import CSVs, Excel Files, do manual transactions, etc, but we suggest that you import your APIs. Are you concerned about your data security? Don’t worry-we are based in Switzerland and you can read about our security policies here.
Importing a Wallet:
Importing an Exchange API
Importing our Accointing Template
Importing your Manual Transactions
Getting my Report
Once you have done all of this, you’ll need to classify all your trades and transactions. How? We have created a Full Data Set Page where you can review all your different trades and transactions you’ll be able to classify each of them accordingly, but first, you need to make sure that your import data makes sense. Here’s how:
Reviewing your transactions:
You need to make sure that the data represented in your portfolio dashboard actually makes sense. If it doesn’t, you probably need to go to your Needs Review Page to check on your different trades and transactions and correct them accordingly. Here’s how:
As you can see, your Portfolio might not be reflecting all your transactions so you’ll need to fix things within your imports in order to reflect the right values in your Full Data Set. These errors might be due to the following:
- Differences between the balances reported by the exchange and the balances calculated with the trades provided by the exchange and about trades
- Transfers where you attempt to sell more Coins than you own at the time of the transaction.
NOTE: We can’t determine how you acquired parts of the sold/withdrawn amount (in red) due to missing data in your trade history, especially incoming transactions like mining, staking, airdrops, etc. and transactions between your Exchanges and Wallets. This is why it’s important to check and review your transactions.
After you’ve cleared out all your transactions in the Needs Review page, you can move along and start classifying your transactions accordingly. Up next, we show you how.
Classifying your trades and transactions
Now, you already underwent through getting all the pieces of your puzzle together. You actually have managed to make sense of the whole thing (if you’re still struggling, please note that you can contact us directly through the chat available across the entire platform). Now, here’s how you can classify all your transactions:
You might notice that you can ignore classifications. That means that you can get rid of those airdrops that you had no clue you had. However, make sure you go over the process with your CPA in order to quantify the possible risk it might entail. If you’re at a loss, there’s probably none but it always makes sure to double-check. We do manage to track your Margin trades so if you need any support with that, use Accointing (I believe we are the only ones handling properly…accounting-wise).
Getting your tax report
You’ve fixed your transactions with missing funds on the Review page, you’ve classified your trades and transactions accordingly, you have reviewed your full data set and now you’re ready to generate your tax report. Before actually generating a tax report, make sure that you know what’s the current tax method that you’re using for the rest of your alternative transactions (non-crypto related). If you’d like to know more about the different tax methods, you can check some really cool articles here or here.
So here’s how you get that report:
There are specific details that you’ll need to follow up with your CPA. For example: how will you deal with margin fees? what would you like to do with airdrops? what tax method should you use? should I use multiple or single depot for transactions (tax-loss harvesting)? All of this and more are questions that might arise while creating your tax report. Luckily, we have a list of CPAs that we recommend to you in case you need one. We only work with the best CPAs and we have handpicked them from all over the United States. Plus, we are always available via e-mail (email@example.com), Telegram (https://t.me/accointing) or the platforms webchat
Keeping your data safe
Now you’re wondering: “This is very nice but how do I make sure you’re not a scam and just want to take all my data”. Well, we obviously charge for the tax-reports- that’s our business model (we are the most affordable crypto tax tool with a portfolio tracker in the market). Regarding the safety of your data, we comply with the highest security standards possible:
- User data is encrypted using user-specific keys generated by the AWS Key Management System (KMS), which are also rotated accordingly to industry standards.
- The system is ongoingly checked (among other things) for all points of the OWASP Top-10. As far as possible, data minimization and partitioning of the data is applied. The purchase information, for example, is only available in Shopify and at no time in connection with the user’s crypto-portfolio.
- Passwords are never received, thanks to the integration with Auth0. Users also have the possibility to use the widely used 2-factor authentication.
- For API keys we explicitly ask for read-only access and encrypt this data also user-specific. The users can delete the whole account including all collected data at any point.
- Out of respect for data sovereignty, users can export their data from the system at any time without restriction. As a data center, we have made a conscious decision to operate on (dedicated) cloud machines and benefit from the experience of AWS as an operator.
- The company headquarters is located in Switzerland, so our customers’ data is correspondingly secure against legal queries.
Never alone during your experience
Doing your crypto taxes is an overwhelming experience. Believe us, we know (we needed to start a company to deal with them). One of the key things that helped us get them done, was the fact that we always had each other’s back. Even for moral support, is always good to have someone supporting you along the way. That’s why one of our priorities is customer support. We want to make sure that taxes don’t take time away from doing the things that you love and also doesn’t take a huge hit on your bags. If you are interested in learning more about us, make sure to visit us here. Talk to Alex on the Freshchat. He’d be more than happy to answer any of your questions.