Why Hiring an Accountant is Better than Koinly for Crypto Taxes
When dealing with cryptocurrency taxes in Canada, many investors consider using automated software like Koinly to streamline tax reporting. While Koinly provides basic transaction tracking and tax calculation, it lacks the depth, accuracy, and reliability that a professional accountant offers.
In this article, we’ll break down why hiring an accountant is a superior choice over relying on Koinly, especially when it comes to compliance, audit defense, financial planning, and personalized tax strategies.
1. Personalized Tax Strategies vs. One-Size-Fits-All Software
- Accountants provide tailored advice, helping you legally minimize your tax burden through deductions, exemptions, and structuring income efficiently.
- Koinly only generates reports based on fixed algorithms, meaning it doesn’t optimize for tax efficiency.
- Crypto transactions are complex (staking, lending, airdrops, margin trading, NFTs, DeFi), and misclassification by Koinly can lead to overpaying taxes.
2. Audit Defense: Who Will Support You Against the CRA?
- The Canada Revenue Agency (CRA) requires taxpayers to keep records for 6 years, and errors in filings can trigger an audit.
- Koinly does not provide audit representation—if the CRA questions your filings, you are on your own.
- Tax Partners offers full audit support, ensuring that if you get audited, an expert will defend your filings and provide documentation to the CRA.
3. Can Koinly Keep Up with Changing Tax Laws?
- The CRA constantly updates crypto tax policies, and Koinly may not adapt fast enough, leading to inaccurate tax calculations.
- A professional accountant stays updated on all legal changes and ensures your tax filings comply with the latest CRA regulations.
4. Risk of Software Glitches and Data Loss
- If Koinly shuts down or faces security issues, your tax records could be lost forever.
- Tax Partners keeps proper records for you for up to 6 years as per CRA guidelines, ensuring no data loss.
5. Koinly Cannot Provide Financial Advice
- An accountant doesn’t just file your taxes—they help you structure your finances to grow wealth efficiently.
- Koinly is not a financial advisor and cannot guide you on reducing tax liabilities, retirement planning, or business structuring.
Conclusion
Koinly may seem convenient, but it lacks expertise, audit support, personalized tax strategies, and financial planning. Hiring a professional accountant like Tax Partners ensures compliance, accuracy, and long-term tax savings.
If you're serious about crypto taxation, contact Tax Partners today for expert tax advice and compliance support.
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.