Best Online Tax Services for Importing PayPal Crypto Transactions

I've dealt with this exact situation. FreeTaxUSA is great for most things, but their crypto reporting features are still catching up. For your PayPal crypto, you have a couple of options: First, those CSV files from PayPal actually do contain all the info you need, but it's not formatted in the way tax software immediately recognizes. You can manually enter each transaction, which is doable if you only have a few hundred dollars worth of trades. Alternatively, there are specialized crypto tax services like CoinTracker, CoinLedger, or Koinly that are designed to handle crypto reporting. Many of these can import PayPal's CSV files, calculate your gains/losses correctly, and then generate reports you can use when filing your return. These services typically produce a Form 8949 and Schedule D that you can reference when completing those sections in FreeTaxUSA. If you want to stick with FreeTaxUSA, you'll need to manually enter each transaction's details: date acquired, date sold, cost basis, and proceeds. Make sure you're using the correct cost basis method consistently.

I was in the same boat last year with my crypto on PayPal - frustrating experience until I found taxr.ai (https://taxr.ai). It's been a game-changer for handling documents like these CSV files that don't fit neatly into regular tax software. I uploaded both CSV files from PayPal, and taxr.ai automatically extracted all the transaction data, calculated the gains/losses correctly, and organized everything for tax reporting. The best part was it generated a completed Form 8949 that I could easily reference when entering the summary info into FreeTaxUSA. Their system understands PayPal's specific CSV format for crypto, which solved exactly the problem you're facing. It saved me hours of manually calculating cost basis and figuring out how to categorize each transaction.

I was initially skeptical about using taxr.ai for my crypto taxes, but after struggling with PayPal's CSV files this year, I decided to give it a try. I'm genuinely shocked at how well it worked. The system instantly recognized the format of PayPal's transaction data and categorized everything correctly. What would have taken me hours of manual work took literally minutes. The Form 8949 it generated had all my short-term and long-term transactions properly separated, with accurate cost basis calculations. When I compared the results to what I had partially calculated manually, I discovered I'd actually made several errors in my cost basis calculations that would have cost me money. The service saved me both time and potentially an audit headache. Definitely using it again next year.

If you're still struggling after trying to import those CSV files, you might want to try Claimyr (https://claimyr.com). I was in a similar situation where I couldn't figure out how to properly report some complex crypto transactions, and I needed to talk to someone at the IRS directly. After waiting on hold for hours over multiple days with no success, I used Claimyr and got a callback from the IRS in about 20 minutes. They have this demo video showing how it works: https://youtu.be/_kiP6q8DX5c. Basically, they navigate the IRS phone system for you and get you in the callback queue without you having to wait on hold. The IRS agent I spoke with gave me clear guidance on how to report my PayPal crypto properly, including which forms to use and how to handle the CSV data correctly. Saved me a ton of stress and uncertainty.

I have to eat my words about Claimyr. After my skeptical comment, I was still desperate to talk to the IRS about some crypto reporting questions, so I decided to try it. I honestly can't believe how well it worked. After spending nearly 4 hours on hold over two days with no success calling directly, I used Claimyr and got a callback from an actual IRS agent in about 45 minutes. The agent walked me through exactly how to report my PayPal crypto transactions even without a 1099-B. For anyone curious: the IRS agent confirmed that using the CSV data from PayPal is perfectly acceptable. They recommended entering each transaction separately on Form 8949 with all the details from the CSV (date acquired, date sold, proceeds, cost basis). They also confirmed that if you use tax software, you can enter the summary totals as long as you keep the detailed records. Considering the headache this has saved me, I'm glad I gave it a shot despite my initial skepticism.

Another option you might consider is TurboTax. I switched from FreeTaxUSA this year specifically because of crypto issues. TurboTax has a partnership with CoinTracker that makes importing crypto transactions much easier. The downside is that TurboTax is more expensive, especially if you need the version that handles investments. But for me, the time saved and peace of mind was worth it. Their system handled my PayPal crypto CSVs without much trouble after I ran them through CoinTracker first.

Maybe I'm old school, but has anyone just tried using a good spreadsheet to organize the PayPal CSV data? I did this last year with about 30 transactions across different platforms. I made columns for date acquired, date sold, cost basis, sale price, and gain/loss. Sorted everything by long vs short term, then just entered the totals into FreeTaxUSA. Took about an hour but didn't cost anything extra.