Calculate Your Crypto Taxes | Ledger (2024)

Apr 15, 2022 | Updated May 29, 2023

Crypto Tax. No, it’s not the title of the latest horror film – and you can’t switch it off either. But you CAN get it done simply and easily with ZenLedger. Our newest partner specializes in helping you report crypto taxes. Let’s see how it works!

There’s no way around it – crypto is a taxable asset. This means reporting your crypto portfolio and trading activity is essential if you’re looking to stay compliant with regulation around crypto.

But it’s a tricky old business.

Crypto transactions are a different beast from their fiat counterparts. There’s no easy way to store your transaction receipts. No obvious records to submit to your accountant. With exchanges based all over the planet, it’s not always easy to understand if or when you’re transacting internationally and what that means.

To top it off, trying to keep track of your gains and losses is a complicated process in an environment where prices are changing constantly.

With so much to deal with, how on earth do you tackle your crypto taxes? Stay locked in – Ledger’s latest partnership has got you covered! Here’s your guide to managing crypto tax. First things first…

Is my cryptocurrency really taxable?

The short answer: Yes.

As with most other assets, you’ll be liable to pay fiat taxes based on financial gains you made on buying, selling or HODling crypto. And while no authority can tax your crypto while it’s still crypto. The gains you’ve made over time can be assessed and taxed once you’ve off-ramped into fiat. But exactly how it’s treated is the big question: this is where your crypto tax return comes in.

But isn’t my crypto secret?

We hear you. The beauty of cryptocurrency is that it’s pseudonymous – blockchain contains no names and no personal details.

But that doesn’t mean nobody knows you have crypto. More or less every crypto on-ramp, from crypto exchanges to API services, entails some sort of Know-Your-Customer procedure. Requiring you to identify yourself using photo ID, which is then linked with the platform wallet. The exchange or platform is then expected to share this data – and information about any suspicious activity on their platform – with central authorities.

So while your activity on the blockchain might not bear your name, KYC procedures ensure that your entry into crypto is on record, while the blockchain itself keeps a ledger of every transaction you’re making there.

This means the IRS has a means of knowing whether you’re transacting, earning, and trading your crypto from the point of entry onwards. In short – a tax return is non-negotiable.

How do I do my crypto tax? My accountant doesn’t handle that

We know that might be intimidating. “What the heck is a taxable event for crypto?” “What records or statements?” “How do I even report crypto tax?” We hear your questions. And we’ve got your answers.

ZenLedger – Crypto Taxes Made Easy

ZenLedger is the leading crypto tax calculation software for the US system, with clients such as DeLoitte already on their books. And as a key Ledger, now you can access this cutting-edge tool easily from within your familiar Ledger Live interface.

How does ZenLedger work?

No matter what you use crypto for or how often you transact, chances are you’ll have activity scattered across multiple exchanges, wallets, blockchains, assets and services. Confusing right?

This is where ZenLedger comes in. Its easy-to-use interface makes it simple for you to assemble and process information about all of your crypto activity in one place. How does it do this?

Aggregating Transactions

Say you’ve transacted across different exchanges using their native wallet, as well as from your Ledger hardware wallet, and also have a crypto balance in each one. The “imports” tab in Zen Ledger enables you to extract and aggregate transactions from multiple exchanges into one calculation. Simply choose the platform you’re importing from the drop-down menu. Meanwhile, you can use the wallet import tab to have your hardware wallet activity included in your tax calculation.

Identify Taxable Activity

OK so now you have all your transactions in one place, the scary part starts – how do you figure out which ones incurred tax liability? ZenLedger’s crypto-specific software analyses every transaction, and identifies pertinent tax events according to the US regime.

Track Coin Price Changes Over Time

One of the trickiest issues you’ll face when dealing with crypto is staying on top of the notorious price fluctuations, which of course impact your final tax calculation. Here, ZenLedger’s algorithm automatically takes into account price changes of all coins and tokens over time. Saving you the time and stress of meticulously tracking this yourself.

Insights and Tax Loss Harvesting

ZenLedger may be a tax tool, but it’s useful for a few other things too. With your crypto transaction data aggregated in one place, you can use the ZenLedger interface to review your activities, segment in various ways for insights. It even identifies opportunities to make your activity more tax efficient across the long-term. Maybe you’re looking to free up some cash to buy more of a certain coin. ZenLedger will identify areas within your portfolio where your tax can be optimized to achieve this.

It’s not just for tax season – the tool is useful for anyone looking to trade efficiently.

Bespoke Support and Crypto Tax Professionals

Tax season can induce anxiety in the best of us. Which is why getting support with the technical side of things is invaluable. As well as its easy to use interface, ZenLedger provides a whole series of customer support videos and articles answering the questions that are holding you back. And if you still can’t find your answer, you can even enlist the help of a professional from within the security of the interface.

Tax Forms Generated Within the Platform

And finally, with all this said and done, you can quickly and easily upload your relevant data onto the correct documents to have them accounted for by your tax professional. Cleanly, quickly and accurately, all from within the platform itself.

ZenLedger: Ledger Live’s Newest Partner

ZenLedger doesn’t do your tax for you, but rather aggregates all information for you. Generating the forms you need for your reporting in a format your tax professional can work with.

And best of all, it now sits conveniently within the Ledger ecosystem. So you can use it to ensure your peace of mind all year round.

Crypto Tax Sorted

Cryptocurrency tax is a reality, and it’s one that causes many of us concern or even confusion. Luckily, the process doesn’t need to be stressful or overly complicated. As the crypto ecosystem expands and evolves, Ledger is committed not only to providing you with the best crypto security the market has to offer. While also bringing you the services you really need to make crypto work for you.

So stay free and keep up to date with the latest at Ledger – no matter what you need, our ecosystem has you covered.

Knowledge is Power.

Keep on learning and stay free! Not sure about crypto regulations? School of Block has you covered.