Koinly is the most popular crypto tax software for a reason. Connect your accounts, let it sync, download your forms. That is the promise. The reality is that a clean Koinly report takes a few deliberate steps, and skipping them is how people end up overpaying or filing numbers they cannot defend.
This is the full walkthrough, in the order you should actually do it.
Disclaimer: This guide is for informational purposes only. Always consult a qualified CPA regarding your specific situation.
Quick answer (TL;DR): To use Koinly, create your account and set your country and cost basis method, connect every wallet and exchange by API or CSV, let it fully sync, then resolve the warnings: match transfers, fix missing cost basis, and correct DeFi labels. Reconcile your balances, then generate Form 8949 and Schedule D. The connecting is easy. The reconciling is where accuracy is won or lost.
Step 1: Create Your Account and Set the Basics
Sign up and set three things before you import anything: your base currency, your tax residency, and your cost basis method. These drive every calculation that follows, and changing them later forces a recalculation of your whole portfolio.
For US filers the default cost basis method is FIFO. Koinly supports others where allowed, but pick one you can apply consistently and document.
Step 2: Connect Every Wallet and Exchange
This is the step that decides whether your report is accurate. Add each exchange and each wallet, and do not skip the accounts you no longer use.
- Exchanges: connect with a read-only API key, or upload a CSV export (our Koinly CSV import walkthrough covers this exchange by exchange). Read-only access lets Koinly import your history but never move or trade your funds.
- Wallets: add by pasting the public address. Koinly reads the chain and pulls your on-chain activity.
Step 3: Let It Sync, Then Open the Warnings
Give Koinly time to pull everything. On a large or multi-chain portfolio the first sync can take a while. If a sync stalls or errors out, work through the Koinly not working fixes before continuing. When it finishes, go straight to the warnings panel. This is the heart of using Koinly well.
The warnings that matter most:
- Missing cost basis. A disposal with no recorded purchase. Left alone, it inflates your gain.
- Unmatched transfers. A move between your own wallets that Koinly read as a sale and a separate purchase.
- Mislabeled transactions. Staking, airdrops, swaps, and DeFi events tagged incorrectly.
Step 4: Fix Cost Basis, Transfers, and DeFi Labels
Work the warnings top to bottom.
- Match transfers first. Linking a withdrawal from one of your wallets to the deposit in another removes a phantom sale and a phantom buy in one move. This alone fixes a surprising amount.
- Resolve missing cost basis. Either connect the missing source account or manually enter the original purchase. Never leave a disposal sitting at zero basis unless the asset truly had none. Our full guide on fixing wrong Koinly cost basis covers the exact repair order.
- Correct DeFi and NFT labels. Confirm that swaps, liquidity moves, staking rewards, and airdrops are tagged with the right treatment. The Koinly DeFi import guide shows how to re-tag each one. This is where ambiguity lives, and where consistency matters most.
A user was convinced Koinly was broken because it showed a five-figure gain on a year he barely traded. The cause was three unmatched transfers between his own wallets. Koinly had counted each move out as a taxable sale. Matching the transfers dropped his reported gain to what it actually was. The software was right, the data was just incomplete.
Step 5: Reconcile Your Balances
Before you trust anything, compare the balances Koinly shows to the real balances in your accounts. If Koinly says you hold 1.2 ETH and your wallet holds 1.2 ETH, the history behind it is probably complete. If they disagree, a transaction is missing or duplicated, and the gain is not yet trustworthy.
Step 6: Generate Your Tax Forms
Once the warnings are cleared and balances reconcile, generate your report. For US filers that means Form 8949 and Schedule D, plus a TurboTax export or an accountant-ready file if you are handing it off.
Remember the boundary: Koinly produces the forms, it does not file them. You file, your preparer files, or a done-for-you crypto tax service reconciles and files for you.
The Two 2025 and 2026 Rules That Trip People Up
Two recent changes affect how you use Koinly this year:
- The per-wallet cost basis rule (Rev. Proc. 2024-28). From January 1, 2025, the IRS requires per-wallet basis tracking and ends universal pooling. Confirm your Koinly settings apply per-wallet basis for 2025 and later.
- Form 1099-DA. Your first 1099-DA, arriving in early 2026, will often report proceeds with no cost basis, which makes a sale look like pure profit. Koinly is exactly the tool you use to reconcile that form against your real purchase history.
Want the Guided Version?
Following the steps above will get most people a clean report. If you are brand new to crypto tax software, our Koinly for beginners guide starts even gentler, and learn Koinly step by step builds it stage by stage. If you would rather be walked through every screen, with the exact fixes for the warnings that cause the most damage, that is what our course is for.
Master Koinly the right way
The DIY Crypto Tax Course on Koinly walks you through every step in this guide, built by former Big 4 accountants. Self-paced, lifetime access.
- Connect every wallet and exchange the right way
- Fix cost basis, DeFi labels, and missing history
- File Form 8949, Schedule D, and Schedule 1 with confidence
And if your account is past the point of self-service, a done-for-you Koinly tax filing service can reconcile and file it for you.
Key Takeaways
- Bottom line: Koinly is only as accurate as what you feed it, so the order you work in matters more than how fast you click
- Get the foundation right before importing: set country, currency, and cost basis method, then connect every account including the dead ones
- Treat the warnings panel as the actual job, not cleanup. Match transfers first, then fix missing basis, then correct DeFi labels
- Never trust the report until Koinly’s balances match your real balances. That reconciliation step is what catches the costly errors
- Decision point: Koinly produces Form 8949 and Schedule D but does not file. Apply per-wallet basis for 2025, reconcile your first 1099-DA, then file yourself or pass it to a service
Frequently Asked Questions
Is Koinly hard to use?
Koinly is straightforward for a simple portfolio. You connect accounts, let it sync, and download your forms. It gets harder with high volume, DeFi, multi-chain activity, or years of stacked history, because those create warnings that need judgment to resolve. The software does the math, but it cannot decide how to label an ambiguous transaction for you.
How do I connect my wallets and exchanges to Koinly?
Add exchanges with a read-only API key or a CSV export, and add wallets by pasting the public address. Read-only access lets Koinly import your history without ever being able to move your funds. Connect every account, including ones you no longer use, so your cost basis is complete.
Why are my Koinly numbers wrong?
The usual causes are a missing wallet, unmatched transfers between your own accounts that look like sales, zero or missing cost basis, and mislabeled DeFi transactions. Koinly flags most of these in its warnings panel. Fixing them is the real work of using Koinly, and it is where a clean-looking report can still be inaccurate.
Does Koinly file my taxes for me?
No. Koinly generates the tax forms, such as Form 8949 and Schedule D, but it does not file your return. You file them yourself, hand them to your preparer, or use a done-for-you crypto tax service that reconciles and files. Koinly is the reconciliation engine, not the filer.
What cost basis method should I use in Koinly?
Most US filers use FIFO, and Koinly also supports HIFO and other methods where allowed. The method affects your gain, and as of 2025 the IRS requires per-wallet tracking under Rev. Proc. 2024-28. Pick a method you can apply consistently and document, and get a second opinion if your portfolio is large.
Can I learn Koinly properly without trial and error?
Yes. Our DIY Crypto Tax Course on Koinly walks you through the entire workflow, from connecting accounts to filing Form 8949 and Schedule D, so you avoid the common mistakes that inflate your gain. It is built by former Big 4 accountants and is self-paced with lifetime access.