Tax Season - Spreadsheets or Accounting Software? What are you using?

the-bitcoin-dood in #hive-167922 • 2 years ago

So I've been using Cointracking pretty much since the start. The website loads all my trades using the API keys for the exchanges I trade on. There are then a ton of reports I can load that show me profits, losses, tax obligations, etc..

Honestly, I love the software and so does my accountant. I just give him the reports and he figures out the rest. The software really has been a godsend.

Here's the thing though. Back in 2017 I made something like 6000 trades. Back then we had market volatility and you could buy sell and short the same coin all on pretty much the same day. It was just insanity. Manually logging each trade would have been a nightmare and the market moved so quickly, I'd rather spend my time focused on trading and charts.

Now in 2023, I'm down to making 5 maybe 10 trades a month. The volatility just isn't there anymore (depending on what you're trading I guess), I don't need heavy accounting software to pull all my trades. I think I'm more than capable of logging each trade manually.

The other issue I'm having is my trade history disappearing after a few months. IDK why exchanges insist on deleting that data. I use it all the time while trading. Again, a simple spreadsheet will fix this, and I won't have to rely on the exchange data. So if I'm going to start logging each trade anyway, why pay Cointracking when I'll already have the data?

Using spreadsheets would probably save me about $140 a year which is what I pay Cointracking for using their service. $128 Eur

Anyway, I'm curious about what you all are using. Accounting software or spreadsheets?

If you're using spreadsheets, how do you go about it? Is each coin a separate sheet? Is each exchange a different sheet? I'm guessing all I need is the date purchased and the date sold for % owed. Then tax the profits at that percentage rate. In the US any investments held a year or longer are taxed at a different percentage than day trades or anything sold under 1 year.

So, I guess I'm asking my fellow Hivers, what do you think the best system is for tracking profits and losses and figuring out tax obligations? Does anyone know of any Google Sheet templates set up for crypto traders? Are you using tracking software like Cointracking, Spreadsheet or something else?

Yes, I know many of you don't pay taxes. That's not an option for me, as much as I'd like to stiff them, considering how they treat our industry. I'd just assume not go to jail thanks. There are just too many trades to take that risk.

I don't mean to sound cheap, but for the number of trades I'm making each year, seems $128 Eur is a bit much for tracking software when a simple spreadsheet might do the same thing.

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#proofofbrain #pob #taxes #cointracking #accounting #help #tax #leofinance

2 years ago in #hive-167922 by the-bitcoin-dood

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chinito 2 years ago

yea, just go by what u feel u need or not. I only trade a few times per week on my stock options trading, so i just use a simple doc to keep track, and also the broker keeps a record. if u ever needed to, u can just start it up again..

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the-bitcoin-dood 2 years ago

i just use a simple doc to keep track, and also the broker keeps a record. if u ever needed to, u can just start it up again..

Think, I'm doing this with Google sheets. Worse case scenario, I can always pull the records off Cointracking if I goof up.

!BEER

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beerlover 2 years ago

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nthtv 2 years ago

I store transactions into a local database, MariaDB (a MySQL compatible database engine) to be specific. I admit it's more advanced than a third party tax service or even spreadsheets, and causes me to become intimately involved in calculating profit, loss and cost, etc. But, I didn't just go directly from first trade to database and analytical programming overnight.

When I first go into crypto, many years ago, I stored the few transactions on a sheet of paper, then quickly entered them into a spreadsheet. It wasn't long after, I created a database and programs to display a variety of views into my activities.

My need for analysis grew... a lot. But at the same time, I gained efficiency in knowing my real-time position, historical performance and so much more at the click of a button. That aspect gave me more confidence in my trading, knowing I had the data to process to show me where I stood at any given time and run "what if" scenarios.

Fast forward to today and I can pop a myriad of insightful reports and graphs into the markets, positions, earnings, risk levels and my overall financial situation. You could say it's a more holistic view of one's financial goals and progress. And it all started by taking control of your transactions.

Moving to a spreadsheet is a glorious first step. Tweak, add a column or field here and there and soon, you'll feel more in control and informed. It's a liberating feeling. It doesn't cost a dime, but does require investment of time which I look at as continuing education and exploration.

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the-bitcoin-dood 2 years ago

Fast forward to today and I can pop a myriad of insightful reports and graphs into the markets, positions, earnings, risk levels, and my overall financial situation. You could say it's a more holistic view of one's financial goals and progress. And it all started by taking control of your transactions.

This is a huge game-changer for everyone. You have to have your data, it definitely makes you a more confident trader too.

Moving to a spreadsheet is a glorious first step. Tweak, add a column or field here and there and soon, you'll feel more in control and informed. It's a liberating feeling. It doesn't cost a dime, but does require investment of time

I've been considering Google sheets. I've been using it for my reseller inventory. There is a lot more to learn than I thought, but the more I play with it, the more I learn.

Thanks for this comment, it was very insightful!

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steevc 2 years ago

I guess as long as you log all the transactions you can play with how you process them. I'm sure there must be templates as it's a common need.

Don't let the taxman get you down.

!PIZZA

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the-bitcoin-dood 2 years ago

I'm going to start there, then build. Just log each trade, date, time, price for both sells and buys and exchange used. Then keep tweaking the reports. When I talk to the accountant in the next few weeks I'll see what he needs to, and try to build the reports around his needs.

!PIZZA

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