Koinly is a great tool for Canadians looking to complete their tax returns. Since any crypto to crypto transfer or sale of crypto counts as a taxable transaction in Canada, these can add up over the year. Before you know it, you’ve got 100+ transactions that you must calculate to work out your capital gains.
Koinly takes the headache out of doing your crypto taxes. It is integrated with most crypto exchanges that Canadians can use including BitBuy and Newton. You can also connect your hardware wallet to import transactions. Koinly is perfect for Canadians because it is fully compliant with the CRA and you can generate all the tax reports you need to complete your taxes.
Koinly Key Features That Are Important For Canadians
Koinly has several key features for Canadians looking to complete their taxes:
- Connect your crypto wallets and exchanges via csv file, API or public address
- See a breakdown of your transactions
- See details of your gains and losses
- Generate all the tax forms you need for Canadian Revenue Agency (CRA)
- Makes Canadian taxes simple
What’s great about Koinly, is that it also provides a good overview of your crypto investments. In your dashboard, you can see how much money you have made (or lost) and a helpful breakdown including cost basis, your crypto holdings, and the fees you’ve paid. The clean interface means the information is clearly laid out and easily accessible.
Koinly also has a comprehensive support centre with lots of articles should you need help with anything.
Pros & Cons
- Easy to import your transactions
- Quickly generate the forms you need
- Compliant with the CRA’s guidelines on crypto
- Tracks lending, staking, deposits, withdrawals etc
- Good for beginners and experienced traders
- Easy-to-use interface
- Requires time to manually check everything is correct
- Must have a paid plan to generate tax forms and see your capital gain
- Paid plans get more expensive the more transactions you have
Starts from $49 (depending on the plan)
Koinly supports over 400 crypto exchanges
What Canadian Crypto Exchanges Are Supported in Koinly?
How to Use Koinly in Canada?
1. Connect wallets and exchanges
To get started with Koinly in Canada, sign up for an account on the Canadian page and start importing your transactions by going to Wallet and clicking on the Add exchange/wallet button.
You will see a long list of exchanges that you can connect with. Select the one you want and you’ll be given a choice to import the data. You can allow Koinly to connect automatically using the exchange’s API, you can use your public wallet address, or you can upload a csv file.
We connected to Bitbuy without any trouble, but if you aren’t too tech-savvy, you can simply go to your account in your chosen exchange and download your transaction history as a csv file. All exchanges should allow you to do this. Once you have the file, upload it to Koinly.
2. Review Transactions
Once you’ve successfully imported your data, you can review your transactions under the Transactions tab.
It is important to review your transactions carefully because Koinly is not 100% accurate. It will automatically tag your transactions as a buy, reward, cost, etc however the information might not always be tagged correctly.
We noticed that for several of our transactions, Koinly mistakenly got the value of one of the cryptocurrencies wrong which meant it calculated our profit several times higher than it should.
In the screenshot, you can see that Koinly has calculated that one Tezos (XTZ) is worth $28,471.83. We wish that were true, however at the time of writing Tezos is worth about $6. This glaring mistake was obvious to us and we were able to quickly and easily adjust that value. However, if there are small discrepancies that you don’t notice, you could end up overpaying or underpaying tax. Going over Koinly’s imported transactions is therefore important to ensure accuracy.
Koinly allows you to edit transaction information such as inputting different values, retagging them or even deleting them altogether.
3. Download your tax reports
Once you are happy with all of the information that Koinly has generated, you can go to the Tax Reports section and select for which tax year you wish to generate reports. Once you have done this, use the drop-down menu to select the forms. Koinly allows you to download every form you would need to comply with tax regulations in Canada. You can submit these forms with your tax return.
Koinly is a great tool for Canadians looking for tax help with their crypto transactions. In order to actually generate and download the forms, however, you must upgrade to a paid plan.
There are four plans available. For those with very little activity, you can opt for the Newbie plan which works out to $59 CAD per year. However, we found when importing the data that we had 77 transactions, which is far more than we anticipated. Every crypto swap, deposit, or daily reward from staking counts as transactions so these can easily add up. We, therefore, recommend the Hodler plan that includes 1000 transactions. If you are a day trader, you will need to upgrade to the Holder ($119/year) or Trader ($219/year).
In addition, Koinly is the cheapest tax tool for people in Canada as of now. For example, Coinledger is slightly more expensive.
We do think it is worth the cost because it’s the only tool that helps you with crypto capital gains. You will save a lot compared to hiring an accounting technician who understands crypto. With only a few transactions, you might not need a tax tool like Koinly, but if you have more than 20 in a year, having a tool like Koinly can take the pain out of completing your crypto taxes in Canada.
We think Koinly is a legit tool for anyone in Canada looking to complete their tax return. The CRA’s regulations on crypto can be confusing, but Koinly helps to take some of the stress away. We used Koinly for our 2020 taxes and we will use it again next year. If you decided to give it a try, make sure to sign up on the Canadian page.