How To File Your Cryptocurrency Taxes with TurboTax
TurboTax officially announced that they are offering support for Bitcoin and cryptocurrency tax reporting as a result of their partnership with crypto tax software company, CryptoTrader.Tax. This means that the premier, premier-live, self-employed, or self-employed live packages all have the ability to handle the crypto side of your taxes. This is a big deal for consumers who trade and transact with cryptocurrency as the tax reporting process for the digital asset can be very difficult.
TurboTax doesn't have the ability to aggregate transactions across all exchanges and cryptocurrency platforms (you can read more about The Cryptocurrency Tax Problem), and this is the reason why they partnered with the crypto tax software companies. This new feature provides TurboTax users with an easy solution for uploading and importing their cryptocurrency data.
This article walks through the process of filing your cryptocurrency taxes through the online version of TurboTax. You can also watch the video below showing the same process.
If you want to import your data into the desktop version of TurboTax, read our guide here.
Head over to TurboTax and select either the premier or self-employed packages as these are the ones that come with the cryptocurrency feature.
After creating your account, you will enter the TurboTax live app.
Within the app, you will answer a number of prompts. On one of the early prompts, you will be asked to “get an idea of your financial picture”. Select all that apply to you, and make sure “I sold or traded cryptocurrency” is also selected.
Continue to fill out your tax profile within TurboTax.
The Cryptocurrency Section
Once you have filled out the initial prompts, you can jump to the crypto section of TurboTax by navigating to Federal > Wages & Income > Cryptocurrency. This flow is pictured below.
Within the cryptocurrency section, you are able to select the Crypto Tax platform that you used to prepare your crypto data.
If you have not built out your cryptocurrency tax report with CryptoTrader.Tax yet, this is where you should pause to create your report. Keep in mind, TurboTax will not congregate all of your crypto data for you. If you traded on multiple exchanges and had many transactions, you will need to build out your report and crypto tax profile with CryptoTrader.Tax.
View this article on how to create your crypto tax report with CryptoTrader.Tax.
Importing your data into TurboTax
Okay so you completed your crypto tax report on the CryptoTrader.Tax platform, now you need to get this data into TurboTax. To do so, simply download the TurboTax CSV that CryptoTrader.Tax exports with every report package.
Select the TurboTax Online file from the Downloads drop down. *Note* This will also open up a TurboTax window and simultaneously download the file to your downloads folder.
After downloading your file, head back over to TurboTax and upload this CSV file.
When prompted, you should “select all” transactions as taxable within the app. CryptoTrader.Tax only exports your taxable transactions, so you don’t need to sift through each one in TurboTax. Simply select all of them.
Once you finish, click 'complete' and you will see a summary of your cryptocurrency transactions within TurboTax.
And there you have it! Now all of your taxable crypto transactions will be included with your year-end tax return that TurboTax files for you!