How CryptaTax works, step by step
The three steps above, connect, review and download, are genuinely all you do. But it helps to know what is happening inside each one, because that is what lets you trust the figure at the end. Here is the full journey from an empty account to a filed report.
Step one, in detail: connect your accounts
You start by linking the places your crypto lives. For exchanges, that means a read-only API key, which lets CryptaTax import your full trade and transfer history without ever being able to move your funds. For wallets, you add your public addresses and the engine reads directly from the blockchain. Anything that cannot be connected this way can be brought in by CSV.
The goal of this step is completeness. A report is only as accurate as the history behind it, so the engine pulls everything, trades, deposits, withdrawals, staking rewards and on-chain activity, rather than a summary. This is also where transfers between your own accounts start getting matched, so moving a coin from an exchange to a wallet is never mistaken for a sale.
Step two, in detail: review and classify
Once your history is in, the engine categorises every transaction: which were trades, which were transfers, which were staking rewards, DeFi interactions or NFT sales. Most of this is automatic. Your job is to review the classifications and correct the handful that need judgement, such as whether a particular transfer was a gift, a payment or a move between your own wallets.
This is the step that rewards a little attention. A misclassified transfer can create a phantom gain or hide a real one, so CryptaTax surfaces anything ambiguous and lets you fix similar transactions in bulk. You are not re-entering data, you are confirming decisions, which is far faster and far less error-prone than building the same picture in a spreadsheet.
Step three, in detail: generate your report
With classifications confirmed, the engine calculates your gains and income using the cost basis method and jurisdiction rules that apply to you, then produces a tax-ready report. You get your capital gains, your income, and the specific forms your tax office expects, ready to file yourself or to hand to your accountant.
Because the report is generated from lot-level history, it is internally consistent: every total ties back to individual disposals, and every disposal ties back to the acquisition that set its basis. If you change something and regenerate, the whole report updates coherently rather than leaving stale numbers behind.
A worked example, from wallet to figure
Say you bought one ETH for 1,500 in January, received 0.1 ETH as a staking reward in June when ETH was worth 2,000, and sold 1 ETH for 3,000 in November. CryptaTax records the January purchase as your cost basis, books the June reward as income of 200 at the moment you gained control of it, and sets that same 200 value as the basis of the reward coins.
When you sell in November, the engine applies your chosen cost basis method to decide which coins you disposed of, subtracts their basis from the 3,000 proceeds, and reports the gain. The staking reward appears once as income and, if you later sell it, once as a gain measured against its receipt-day value. Two events, three tax entries, and not a single figure entered by hand.
What happens behind the scenes
Between the review and the report, the engine is doing the work that makes crypto tax hard. It prices every transaction in your home currency on its real date, matches internal transfers so they are not taxed, carries cost basis across venues as coins move, and keeps income and capital gains on separate tracks according to your jurisdiction.
It also handles the awkward edges: activity that spans more than one tax year, fees that belong in basis or proceeds, and events like airdrops or forks that need a value assigned at the right moment. None of this is visible in the three-step flow, which is the point. The complexity is absorbed so the experience stays simple.
When to bring in an accountant
CryptaTax is designed so most individual filers can go from connected accounts to a finished report without help. But some situations genuinely benefit from professional review, such as large or unusual DeFi positions, business-level trading activity, or a jurisdiction where the rules for your particular activity are unsettled.
In those cases the tool still does the heavy lifting. Your accountant receives a clean, reconciled report with a full audit trail rather than a shoebox of exports, so their time goes to judgement rather than data entry. Whether you file alone or with help, the starting point is the same accurate ledger.