Are You Putting Your Crypto Taxes at Risk? The Problems with CoinTracker
Many crypto investors assume that CoinTracker is the easiest way to handle taxes. However, software solutions have major limitations, and users may unknowingly expose themselves to tax errors, audits, and financial risks.
This article will highlight the hidden dangers of relying solely on CoinTracker for tax reporting.
1. Software Errors Can Lead to Tax Miscalculations
CoinTracker relies on API integrations to pull transaction data, but:
- APIs sometimes miss transactions, creating incomplete tax reports.
- CoinTracker does not verify accuracy, meaning users may report incorrect information.
- DeFi transactions, wrapped tokens, and staking rewards are often misclassified, leading to incorrect tax amounts.
These errors could result in underreported or overpaid taxes, which may lead to penalties or lost money.
2. What Happens If CoinTracker Shuts Down?
Software companies come and go, but your tax obligations remain.
- If CoinTracker discontinues its services, do you still have access to your tax records?
- The CRA requires six years of record-keeping, and software alone is not a reliable solution for long-term tax history.
An accountant ensures your records are always accessible, even if software companies disappear.
3. CRA Audit Risks: No Protection for Users
If your tax return is flagged for an audit:
- CoinTracker does not assist or represent you before the CRA.
- Tax Partners provides legal representation and handles all CRA inquiries.
Crypto audits are increasing, and taxpayers relying on software are left unprotected.
Conclusion: Why CoinTracker is a Risky Choice for Crypto Investors
While CoinTracker is convenient, it cannot provide financial advice, audit support, or compliance protection.
For secure, audit-proof, and CRA-compliant tax filings, working with Tax Partners is the smarter decision. Contact us today to ensure your crypto taxes are professionally handled.
This article is written for educational purposes.
Should you have any inquiries, please do not hesitate to contact us at (905) 836-8755, via email at info@taxpartners.ca, or by visiting our website at www.taxpartners.ca.
Tax Partners has been operational since 1981 and is recognized as one of the leading tax and accounting firms in North America. Contact us today for a FREE initial consultation appointment.