As the world of cryptocurrency evolves, so too does the tax law surrounding it. This is posing a challenge for those trading cryptocurrencies professionally, or even those building a business based around cryptocurrency. In the weeks and years to come, all of these groups will likely need professional help to navigate the ever-changing cryptocurrency landscape.
As large sums of money are potentially involved in cryptocurrency investment, this has raised the profile of those who want to ensure that all individuals and businesses are paying the correct amount of tax on their cryptocurrency and other crypto assets. Therefore, it is important to seek professional advice from accountants and tax calculator organizations.
The popularity of tax and accounting services has brought them into the corporate world, bringing accounting issues to the forefront. This is certainly true for our team, as we work with a growing number of fintech companies as well as cryptocurrency holders and traders.
As the acceptance of cryptocurrency and blockchain technology grows, so does the demand for streamlined crypto tax reporting. This expanding market offers exciting opportunities for accounting firms to expand their services into the digital and decentralized finance worlds.
In this article, we will answer the most frequently asked questions about API tools for crypto tax and accounting software and provide you with the ultimate Crypto API Tool Guide For Tax And Accounting Software.
Why crypto market data API is important to accountants and CPA firms? Why integration with API might be essential to your tax/accounting company?
Looking around, we can see that connectivity is all around us. In the simplest terms, APIs enable connectivity by allowing applications to communicate with one another. But how exactly can API integration improve the performance of your tax software or accounting solution?
By allowing tax and accounting applications to communicate with one another, market data API increases efficiency, automates tasks, and improves staff retention. Some tax and accounting firms use as many as 40 applications. Consider the amount of work that is involved with that many applications.
Your staff can avoid inaccuracies and save time on mundane data entry tasks by utilizing APIs and integrations that ensure the applications work together. These advantages save money and improve the customer experience, but they are not the only advantages.
APIs enable you to create a more productive and effective workforce. Firms have always faced talent challenges, and based on the accounting pipeline, it does not appear that the staffing shortage that many firms are experiencing will be alleviated anytime soon. Employees gain the ability to focus on high-value work because they spend less time on monotonous and repetitive tasks. In short, your employees can work to the best of their abilities.
What to look for in a market data API for a crypto tax tool? The ultimate Crypto API Tool Guide For Tax And Accounting Software
APIs are and will continue to be a vital part of any company. To get started, make sure the market data API you’re using covers all the bases. Does it include information on the specific cryptocurrencies your client’s trade, the exchanges they traded on, and the assets they used? If not, then it’s essentially worthless. What are the key things that market data API should include?
Tax/accounting organizations must ensure data quality to make proper tax calculations, and avoid critical mistakes. Crypto market data must be correct, consistent, complete, relevant, and reliable to calculate and estimate the appropriate tax price based on the collected data. However, if the data is poor, it can have a significant impact on your decisions, customer experience, and the organization.
Exchange rates should be the default source of data for tax/accounting firms. Exchange rates proposed by CoinAPI are of the best quality and we have gone through a lot of iterations with them to get the best results.
To ensure accurate tax reporting, companies need access to both live and historical exchange rates. Our unified Market Data uses flexible REST APIs to collect data from the top crypto exchanges via their public WebSockets. This means that accounting firms interested in entering the crypto world can do so without the need for any special development or additional infrastructure. With Crypto Market Data endpoints, you can list details of cryptocurrencies such as the latest rate and the rate fluctuation over different periods, for example over 24 hours, a week, or one hour.
CoinAPI updates exchange rates and orders books regularly. Most other providers do not have low-frequency data, which we do. CoinAPI provides live exchange rates for 15k+ currencies as well as historical rates from 2014 to the present.
Data standardization and mapping
Tax companies need cryptocurrency names and mappings, because there may be one cryptocurrency that has several names – that’s why the normalization of data is so important. You are one step closer to having a complete and clean crypto data view that you can use by standardizing data collection via CoinAPI. CoinAPI has its database, which we also use to calculate exchange rates.
CoinAPI offers a distinct advantage in the form of data standardization. Standardization promotes more innovation in the industry. Humans double-check all market symbol details and asset codes. This final step ensures the highest level of quality. You are one step closer to having a complete and clean crypto data view that you can use by standardizing data collection via CoinAPI.
How CoinAPI can help crypto taxing and accounting companies?
Crypto APIs can assist you whether you are developing a dedicated crypto tax and accounting solution or simply want to expand your services to the growing crypto market. The market will only grow as the number of cryptocurrency brokerage, transfer, and custody companies grows, as will the general adoption of cryptocurrency.
Implementing blockchain technology now will allow you to future-proof your business and remain competitive in a rapidly growing market while providing high-quality service to your current customers and clients.
Seamless Integration with APIs
Our solution includes an integrated ecosystem of tools with open API connectors, allowing firms to easily integrate third-party vendors with CoinAPI technology to create a custom solution tailored to your firm’s specific compliance process.
Complete work faster
Take on the most difficult tax returns, such as multitiered consolidated return processing for corporations and partnerships, and create the entire tax return from scratch using an imported data file. Deploy your team concurrently across a single return so that each specialist can begin their role simultaneously.
Easily file advance tax returns
With time-saving tools like the market data API, you can process individual, corporate, and partnership returns.
Real-time tax calculation
CoinAPI’s API enables lightning-fast tax calculation for transactions across tens of thousands of jurisdictions all over the world.
Get transaction details
Get information about transactions made across all supported blockchains, including the total amount, the fee, and the UTXO, allowing for a comprehensive tax report and simplifying accounting.
How your firm can leverage APIs
APIs can be used in almost limitless ways by businesses. APIs are currently being used by firms to automatically transfer data into tax returns, automate roll forwards, and perform batch extensions.
To determine how your firm can benefit from APIs, you must first catalog all of the applications used in your practice. After that, consider the following: Where are there potentially redundant processes? What aspect of your current workflow may be causing inaccuracies? What administrative tasks does your staff spend the majority of their time working on?
CoinAPI connects tax and accounting firms to APIs and advanced integrations. Firms benefit from advanced integrations, whether they build them themselves using the new developer portal or use a third-party solution from a Wolters Kluwer technology partner.
Reduce development time
Use the power of a tried-and-true blockchain infrastructure trusted by industry leaders. Integrate once and go to market in a matter of days.
Lower your maintenance costs
Our flexible pricing plans provide the best value for money. Gain access to the entire product suite and features. You can always upgrade or downgrade.
On all sensitive data, we use REST encryption, memory encryption, and in-transit encryption.
Dashboard for everything
All of your crypto operations will be managed from a single dashboard. Get API keys, create addresses, the track failed requests, callbacks, and more.
Start building your tax/accounting software with the API integration
There are hundreds of exchanges and wallets, each of which necessitates custom integration and ongoing maintenance. It is inconvenient and time-consuming to require customers to manually export CSVs.
CoinAPI connects you while standardizing and formatting the data required for tax calculations. This saves hundreds of developer hours and frees up resources to focus on your core business.
CoinAPI has information on over 9000 assets. Not only that but CoinAPI is linked to over 250 exchanges. The primary goal of this API is to provide a one-stop solution for crypto market data. CoinAPI supports JSON, XML, and CSV formats.
The benefits of a market data API
- It eliminates the need to download multiple CSV files from a single exchange, as well as zip and email files.
- It prevents humans from selecting incorrect dates in trading history.
- Ensures that all trading activity is recorded
- Capable of capturing complete information (rather than some exchanges limiting the amount of history available to download).
- We save time by not having to unzip files, format international dates, modify CSV files, and convert them into our standard reporting template.
- We will have a link to your trading information for future fiscal years once the API is set up (after the one-off set-up)