This post may contain affiliate links. Please read our disclosure policy

Your content goes here. Edit or remove this text inline or in the module Content settings. You can also style every aspect of this content in the module Design settings and even apply custom CSS to this text in the module Advanced settings.

The following is an edited version of the video transcript…

Hello, this is Jodie here. I’m the founder of the Bot Buddies Community, where we like to help people get on-boarded with crypto and talk about all sorts of different levels of crypto understanding. One of the most important things, since I’ve been in crypto now for a couple of years, something that I didn’t get a good start with, was actually being able to bookkeep my crypto journey. I didn’t do a very good job of it from the start.

What has come to my awareness recently is a tax reporting software-a CoinTracking software-and there are lots of them out there, which is actually a really smart thing to do pretty much from the word go. So it’s one of those almost semi-regrets that I didnt’ start with one.

I hadn’t been aware of it back when I first started buying some crypto in an ad hoc, dabbling type of way. So today the founders of Crypto Bookkeeping Simplified, Guillaume and Jessica, have come along to have a chat with me about all aspects of bookkeeping. Also just that tracking element, like being able to have a quick glance and seeing where your position is at, right through to the proper tax reporting side of things, because this is an asset class. And being a pretty major asset class, of course, most of us around the world have to report our income and our expenses as well from our experiences in crypto.

The following is my conversation with Guillaume and Jessica discussing Crypto Bookkeeping and Tax Reporting:

Guillaume: So yeah, both Jessica and I, we’ve gotten into crypto more actively in the past year. Then we found also we had a common interest for this technology and investment.

So I bought some Bitcoin back in 2014, but at that time I didn’t really know what I would do, but I ended up selling some, most of them with a profit in 2017. And when there was some moonshot, ut then I realized after I used the money for something else, I didn’t know, I didn’t have any strategy or anything.

So now back to last year, we started investing and found different strategies we could use for crypto investing and a couple months ago we saw that people have some issues with how do you report this. And how do you keep track of this. And we also have people on different exchanges in different countries, so they have different strategies, different platforms. So we had this interest to research this. So we got together to create this a group membership and course with support groups so we can help people. So that’s a quick summary of the work.

Jodie: You are in Montreal, Canada, correct?

Guillaume: Yes, I’m in Montreal. So I have insight on the Canadian stuff a bit, and I know some people also from Canada that are doing similar things. they’re investing like us.

Jodie: That’s what I really like about your partnership.You being from Canada and Jessica is in the States, so you’re actually getting exposed to two different tax systems. But of course, you are able to support anybody from around the world as well with your community membership. So Jessica, where are you?

Jessica: I’m in Lincoln, Nebraska.  I also have a little bit of a relationship with the UK because I have a son in school in the UK and I’ve been talking to people about the different taxes. They have a completely different tax situation there. And it’s really interesting that the software we’re using and recommending is capable of reporting very differently from what US taxpayers would be expecting.

Jodie: With the Crypto Bookkeeping Simplified, there is a preferred tax software that you like, CoinTracking, which is what I’ve just subscribed to thinking that I would never actually need a tax reporting software.

But I looked at it from a different perspective because I literally have stuff all over the place. I’ve got different exchanges, I’ve got some DEFI, I’ve got some savings wallets, I’ve got all these things.

And the really cool part was when I uploaded the very first exchange that I bought crypto from in 2018, it got all of my transactions from 2018. So that was super cool. So the inspiration for me to even talk to you guys today is coming at it from those two sides. Coming at it from that real portfolio position snapshot so you know where you’re at, what you’ve spent, know what it costs you to get in, and what your fees are. And then of course, putting all that into a tax reporting side of things.

So your Crypto Bookkeeping Simplified is looking at that, but with more of a premise towards the tax reporting, is that correct?

Jessica: It is for now. I have plans to expand because tax season, at least in the United States, is done April 15th.  But we did set up the membership so that it expires December 31st of the year, so we have all that time to explore.

We want to do more research into all the different tax softwares and compare them and see if we really do have the best product, but really making sure that it’s legitimately the best product for everybody. And we’ll also be having some coffee chat monthly, comparing numbers and seeing if you are in these various strategies, if you are in The Plan, or if you are in rebalancing and all these things, are these strategies really working for you?

And we really can do that with the tax software, not to mention planning ahead for next year’s taxes for people who have to pay taxes, that you can look at and say, “Oh, this strategy is doing really well, but this one isn’t, if I sell out of this right now and take the loss in this year, then it can offset the capital gains and taxes over here”.

A lot of people don’t have any clue about that or know how to plan for that. So that’s part of my vision for this membership going forward is not just that one week when you’re doing taxes in April. It’s also a little bit of financial evaluation of where you are, and talking about a place to exchange ideas about other strategies that could possibly work too.

Jodie: With the actual software that is being used at the moment which is CoinTracking, have you come across anybody actually having difficulty uploading, and are you providing tutorials on how to get your information into the software?

Jessica: Yes, absolutely. The software’s great. And this software is particularly easy to use from my perspective, a lot of exchanges, you just hook up the API and it downloads everything. It’s like magically done and it spits out the tax reports. But there are definitely exchanges out there that are not completely supported or parts of them are supported. So some of the information will come in and some of it won’t.

I was talking with someone this week about her account at Nexo, and I pointed out to her, saying “Do you know that the there’s one particular type of transaction that happens at Nexo where you swap coins and that is not imported?” The information that comes out of Nexo does not communicate with CoinTracking right now. And it’s a very complicated process to translate it into something that CoinTracking will actually understand.

Jodie: So with a perspective of doing the manual side of things, that’s where your membership’s actually supporting people as well.

Jessica: Yes. And not only that, people upload everything and they say, “My taxes show I have a $20,000 gain, but my bot profits was $6,000, what’s going on?” So that’s the thing we can take a peek at for them, or troubleshoot a little bit and see if they missed something.

And having a place to ask questions!It’s one thing to go in there and hook up your exchanges and you download your things. That part’s all very easy. But having someone to say, “Yes, this is what you need to do” when you have a question, that’s so important. And I think one of the biggest values we offer to our membership is the chance to ask questions.

Jodie: And of course Jessica, you’ve got the bookkeeping background, but Guillaume, you’ve got the technical background. So all of these little issues with like APIs or things going wrong, especially since there’s a lot of technophobic people out there, you’re able to help on the the software side of things as well. Right?

Guillaume: Yes, that’s true. Like Jessica said, we add more and more information, and provide tutorials or the step by step process to handle some of those more complicated situations.

What’s happening now, we notice people, they start the process and when they get a block on something or something’s wrong, then they stop because they’re like, “Oh, what should I do now?” So that’s where we can help them figure out what’s wrong so they can keep going and continue.

We’ve noticed people have different issues depending what their money or their investments are, and some of the steps right now are still manual. We need to do some of the manual work on the file, especially for the importing/exporting.

Guillaume: Like you said of my background, I’m working on creating a couple tools too, that will do some of the work for them. So that’s one of my plan is to learn from this and then have a tool where it could take your file and put it in the right format. So you could save some of the manual labor time.

And if you care only about the tax reports, some of that you may be able to skip, but like you mentioned earlier, you want the real picture of your crypto and investments, and you want to see everything, all the money you put in there and you want to see all your balance and keep track. And it’s just, I think having the picture of everything, you have pretty much in the one place, that’s something I’ve been looking at before, even for myself.

And keeping track in Excel of your different things is time consuming. So we found this software can combine both. So after you’ve done the initial work on getting everything you have imported, then it’s mostly just an update.

Some of it might need to be updated monthly for some people, but at least you have a very clear picture and you can even adapt your strategy. Or if you want to have a certain allocation or whatever, you will have a real picture of where your money is in the different places. And then you will be ready when you want to buy, when there’s a dip or something, or when you invest more money. So that’s a very interesting thing.

Jodie: If I could ask, what would be the top five things that people generally don’t think about when they start buying crypto, that could actually be an advantage in knowing when it comes directly doing their taxes?

Jessica: Well, for sure, one of them is knowing all the different ways you can earn income because when you get a referral for opening an exchange, that is considered income, at least in the United States.

And and if you’re doing mining, if you’re doing yield farming, when do you record the income? Because when you trade, I think it’s when you trade your token into the pool, you get back something. And so therefore it’s considered an exchange. And so there’s so much of that that is not clear that people don’t know and could really use help figuring out.

And that’s not always automatically labeled either in the software, because when we were going through one of the reports, which is called missing transactions, if you get a deposit coin, tracking wants you to have a withdrawal. But if you get a deposit because it’s a referral bonus or it’s an interest payment or something else, you have to label it properly.

Jodie: With regards to the education side of things, The Plan costs $3500 to invest in education. And then any other software, even the software expense of CoinTracking as well. All of those are expenses that can be written off, isn’t that correct?

Jessica: They could be, but that’s more of an issue you should talk with your tax preparer about, because especially in America, you can only deduct investment expenses if it is a certain percentage of your income. Like 2% or something like that. So until you hit that 2% threshold, it doesn’t even matter if you bought The Plan or whatever.

So that really is a good question for a tax preparer expert. And we make it very clear from the very beginning, we’re here to help you. And we’re here to answer questions, especially about the software and especially about what we have seen with crypto transactions and how to report them and everything. But we are not tax experts and we are not accountants. We’re not officially trained. And so you do need to take your report printed out to your tax preparer and say, “What do I do with this?”

Jodie: So let’s talk about that just for a second, like round table discussion here. There’s not a lot of accountants in the world right now that actually have any idea on what to do with crypto. So in your opinion, doing this reporting and getting this prepared for somebody is going to be helping them because at the end of the day, the individual is still the one paying the tax and they want to be able to get the best returns they can.

Jessica: Absolutely. And the thing about the software is it does break it down. So you earn income and that’s reported over here and then you earn your capital gains and that’s reported over there. That’s very easy to take to a tax preparer and they plug it in the right lines and they don’t have to worry about it.

Then you can tell them, I had this expense or perhaps you sent a coin to the wrong address and lost it forever. And there may be ways to write things like that off. So the tax preparers don’t necessarily need to be terribly educated in the whole crypto thing. And in fact, my personal accountant right now is terrified of it, doesn’t want to deal with it. He’s actually sending me his clients to get the crypto part put together so that he can put it into his tax software.

Guillaume: So CoinTracking itself, like Jessica just mentioned, separates the different incomes and it will classify them. And it’s probably doing a better job than most. Like you said, many accountants can’t do it because they don’t know crypto.

Then the matter is taking the report, which has everything broken down, and then there might be different cases for people, where depending on their situation, they will need to plug the numbers in the right place. But usually the time consuming part is really to produce this, which is often coming from, especially in our case, a lot of transactions. So the logic behind it is similar for most countries. Of course you need to make sure that you do it the right way, but I think it simplified the work that’s coming ahead of time.

Jodie: I love that, because then you have got just the silos. So here’s just a total number in each of the silos. Here was your loss, here’s your gains. Here’s the interest that you’ve earned. Here’s the expenses you’ve had.

Jessica: So yes, true. They don’t really need to know a lot about crypto itself, other than it is an asset class, and they just want those end numbers. So that’s why it’s so important to use a software like this. Not just for that position, “Where’s my portfolio at, where am I really at?” Am I up, or am I down, at a glance.

Jodie:That’s how I want to look at it. But then right through to, what are the numbers I can just give straight over to my tax preparer? They don’t have to worry about it. And it’s not a lot of time and effort going into it because the software is doing it. But you did mention about the number of transactions… So yes, this is highly, highly important for anybody doing The Plan because you are going to be doing, even just with one bot, over a 100,000 transactions in a 12 month period, guaranteed.

Jessica: Well over. Yes.

Jodie: So the number of softwares available that can provide reporting on that many transactions is actually quite limited. Isn’t it?

Jessica: That’s what we’re finding. I watched a YouTube video comparing five different softwares, and none of them were the one we recommend, but his top recommendation was Coinly. And Coinly, if you read the fine print, their highest level is 20,000 transactions that they give on the website, and then you have to buy additional levels 10,000 at a time inside their app. So you have no idea how much it costs until you get there.

And then it said, it’s permanently limited at a 100,000. So anyone who’s on The Plan is going to be like, unless they started in December and only traded for a month, they’re going to limit out of Coinly completely. It was mind boggling.

And the other thing, I was looking around, because we’re thinking of eventually offering “done for you services” where we can just pull people’s reports together for them. And we were looking at CoinTracking. They have professional services they offer listed on the website, and it lists their basic, just preparing the crypto tax reports, not the full taxes, but just the crypto tax reports.They’ll pull them together for like $800 for less than 5,000 transactions.

But if it’s over 5,000 transactions, it’s $2,800. I cringed when I saw that because I thought of all those people who got in The Plan and they started investing and the market went down, down and they have thousands and thousands or hundreds of thousands of trades, and to get someone to do it for them, the fact that it will cost them $3000 and perhaps more than that, is just horrifying.

Jodie: I don’t get this because of everything you’ve already said, that the software does it. So to come and pay you guys such a small amount to have a year’s worth of access to help, communication, tutorials, and eventually yes, there are people who are just so time poor they will need to have somebody do it for them, but there’s not a lot to be done for $2,800. It’s already all in the software. Somebody’s just literally going to upload those APIs, and do a few manual move arounds.

I really believe it important to empower people to be in control of their own crypto. And this is exactly what you guys are doing. You will teach the people, teach your members how they can do it themselves in the most simple way, because it is actually pretty easy when you know what to do. But getting help on the few little glitches that might happen, like if the API’s a bit off or whatever else, I mean. That’s why you guys have got such a great partnership because of the programming background and the bookkeeping side of things.

You’re seeing it from two angles so that people can actually get their whole entire reporting and tracking in line. And we know there’s going to be people that will say, just do it for me.

It comes down to how much work needs to be done, and you guys are really honest and fair,and you’ve got that being of service mindset. So you know how to look after people.

Guillaume: And with the Slack community, we answer people. The course itself has been moved to the Experiencify platform, which is really more geared to a course set up where you have each module with the video and the documents and everything. So that has been easier for people now to follow the step by step process. And then if they have questions, then they can ask them. But that’s even nicer and easier to follow.

Jodie: Well the thing of choosing the Experiencify platform is the sense of accomplishment. So each student that goes through will actually be able to tick off, “Yes, I have done this. I know what I’m doing now. I’m ready to move on”. So great choice in that platform and Slack as well.

One of the things that a lot of people aren’t aware of, and I actually did do a post about this, so many people in the crypto space are moving into Discord as their community. And that’s terrifying! That is literally where most of the horrible stuff can happen in crypto, with direct messages from people that are copying other people’s identities.

So having Slack is definitely a much safer, secure and professional workspace and community space for everybody to be able to connect and get the information. So congratulations on that.

The last thing I wanted to talk about was the software discount, you can actually get a discount for the software, is that correct?

Jessica: Yes. We’re offering a 25% off discount and we are not requiring you to buy the membership. We think you should buy the membership because when you get stuck, you’re going to need help and we want to help you, but we are not requiring it. You can just buy the software. It’s for the one year subscription at the unlimited transaction level.

Jodie: Is that renewable as well? Or is that just for the first year?

Jessica: Our plan is to keep offering 25% off whatever the list price is. Although, we could change our minds, but, but right now that’s the plan.

Guillaume: That’s a yearly subscription and it’s lifetime. So basically if you buy a certain amount, but then the next year you’re still importing, then you will probably go over your limits. Very quickly you might need to upgrade.

So sometimes instead of upgrading once or twice during the year, you might as well get the bigger plan because it will stop importing new transactions when you reach your maximum. So that’s why we have an explanation about how to pick your level and make sure you have the right level for your situation.

Jodie: That is really interesting. I did not know that, but it’s actually the entire lifetime. So you need the unlimited regardless. Whether it’s for one year or beyond you need the unlimited account. So just a quick how to, if somebody is actually buying the software through you, how long is it until they actually get access into their account?

Jessica: We have an email sequence set up, and we need to buy their seat. So we have built in 18 – 24 hours once we receive notice that they purchased, we can make sure we have a seat available for them, or buy the seat that we need for them. And then they need to open an account.

An account they already have is fine and it can be a free account, but the way that they’ll access the software is through their own account, with their own password that they need to set up. So they will receive an email if they don’t have an account that says, go make an account. And if they do have an account, within about 18 hours or so, they will receive the email that says, click on this link and they click on the link, they sign into their account, and it’s done.

Guillaume: They get transfered to our corporate seat license.

Jodie: So one thing that I did actually experience myself was just getting the free account. I got the free account set up and all I did was just put in some of my HODL’s from Metamask that I have. So obviously that was well under the threshold of the transactions for the free account.

I highly recommend everybody go and do that. Go and get your free account. Then coming through to get the 25% discount with you, paying you for that, and that activates their upgrade, so then they can start on the tutorials.

Everybody should be getting the actual Crypto Bookkeeping Simplified course and support membership, because you can get all your API’s hooked up, get all your stuff in there. Then you can come across any glitches there are. Like my one for Huobi, put me in the red $2,600,000. It’d be interesting if I even had $2 million worth of crypto, but I was like, “Oh, what happened here?”

So I instantly went through and found how to delete that. But those things, they’re going to happen. And you want to know who it is that you can call upon to say, “Ahhh, what did I do?”

Jodie: On top of being able to study, you are able to come into the Slack group and just go, “Has anyone else come across this? Is there an issue with this API?” So I think it’s really awesome what you guys have put together. I encourage everybody involved in The Plan or crypto to go through your community.

Any final words of advice? You know, I’ve said that I wish I had this from the start. Were you bookkeeping manually prior to getting Cointracking?

Jessica: I’m still keeping this really complicated spreadsheet that has multiple sheets, and it has all these numbers and I track what my bots are doing. And the thing is, it’s not going to track your bots. You’re still going to have to, if you want to see how your bots are doing, which I do, you still have to track your bots every day. But the rest of it, having it all in one place, especially with the APIs that hook up automatically and update automatically, I can’t wait to get in there when I have a few minutes and start playing around.

Guillaume: Even myself, I had lost track a little bit in the past couple months of some of my stuff, because I didn’t update it every day or every week. So I’m happy now that I can use the software.

One thing I don’t know if we mentioned, is having the unlimited software version with this corporate account. One advantage is if they have a problem or if they generate a report and they’re not sure, then we can help. We don’t have access to their crypto accounts, but we can look at their reports on their CoinTracking account and figure out where the problem is, so it makes it easier. If they have some issues we can talk with them or tell them what to do. So that’s the advantage of the corporate licensing.

Jodie: Ah, very good. So it’s kind of like a little look over the shoulder to be able to direct without actually having it. It’s almost like your own API?

Jessica: What we’re telling people is we don’t have any access to your API. Even if we did the ‘done for you’, we would do all their transactions, we can balance things and we can delete things, but things need to be downloaded from their exchange and from their API connections.

They need to set tha up themselves so we never have access to their crypto. We’re never going to be able to steal their crypto because when you set up the APIs, it’s just read only, it’s not giving you permissions to move things around.

Guillaume: They have to go into their exchange to create their API or to download their CSV file, or export transactions if they don’t have an API, but they have to do that part themselves. Like Jessica said, the API is always read only. So even with CoinTracking, it has no way to withdraw money or make trades, just fetch the transaction. We’re not able to do anything to their crypto accounts.

Jodie: That’s really good to know. So I’m going to leave it there with the idea that one day I will be a resident of somewhere and I’m going to be all fully set up with my CoinTracking tax reporting, and I’m going to come along and enjoy Crypto Bookkeeping Simplified as well.

Thank you so much Guillaume and Jessica for your time today, and I look forward to talking tax reporting. No, not talking tax reporting! Looking at my CoinTracking and seeing where my portfolio is at. That’s what I’m excited about! And don’t forget it’s a good idea to get started with all of this as soon as you get started in crypto.