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This article aims to help people that used Metamask understand how to get started calculating their crypto taxes. For best results it should be complemented with a crypto tax guide relevant to your country.
Introduction to Metamask
Metamask is created by a group of developers and designers from across the world that focus on providing democratic access to the decentralized web. MetaMask allows users to store and manage account keys, broadcast transactions, send and receive Ethereum-based cryptocurrencies and tokens, and securely connect to decentralized applications through a compatible web browser or the mobile app's built-in browser
MetaMask also lets the user create and manage their own identities (via private keys, local client wallet and hardware wallets like Trezor™), so when a users wants to perform a transaction and write to the blockchain, they get a secure interface to review the transaction, before approving or rejecting it.
Metamask currently offers support for multiple networks that are EVM (Ethereum Virtual Machine) compatible. This includes networks like Ethereum, Avalanche, Polygon, and Binance Smart Chain. You can also use Metamask to access test networks like the Rinkeby Network, Avalanche Network, Kovan Network, Goerli Network, and Ropsten Network. These are all Ethereum testing networks to evaluate and testing blockchain developments, they are not required when filing your taxes.
Do I need to pay taxes when using Metamask?
Metamask is used for a wide variety of reasons including but not limited to interacting with Decentralized Applications (smart contracts), NFTs, trading, and storage. This can make transactions in Metamask harder to classify when doing your taxes. Depending on your country, a lot of these transactions can be considered to be tax events. It is important to have a good understanding of what each transaction represents. You can find more detailed information by looking up your public addresses on a blockchain explorer if you happen to forget.
When evaluating a transaction feel free to use Divly's crypto tax guides. Each country and local tax authority has its own rules on how transactions should be taxed. If you are using Divly, then we do attempt to match more complex decentralized trades automatically for you. This includes NFTs. Divly will also use tax logic suitable to your country.
Below are some selected country guides:
| Country | Crypto Tax Guide |
|---|---|
| 🇺🇸 | US Crypto Tax Guide |
| 🇸🇪 | Sweden Crypto Tax Guide |
| 🇫🇮 | Finland Crypto Tax Guide |
| 🇩🇰 | Denmark Crypto Tax Guide |
| 🇳🇴 | Norway Crypto Tax Guide |
| 🇪🇪 | Estonia Crypto Tax Guide |
| 🇩🇪 | Germany Crypto Tax Guide |
| 🇬🇧 | UK Crypto Tax Guide |
How do I calculate my Metamask Taxes?
You can simplify your Metamask tax declaration using crypto tax platform Divly. Simply upload your Metamask transaction history and Divly will perform all the required tax calculations according to your country's requirements.
Step 1: How to export your Metamask transaction history
Metamask does not have a native export function. This means you can’t download your transaction history from Metamask, rather you need to use a blockchain explorer like Etherscan, Bscscan, Polygonscan, or other blockchain explorers.
Automatic import
By simply providing Divly with a wallet address (0x…), all your transactions including the native tokens will be imported automatically.
Step by step guide:
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To locate your Wallet Address, sign into the Metamask browser extension.
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Select the correct network and account. Copy the Wallet Address provided on the top under the account name. The Wallet Address should start with “0x”.
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In Divly, paste the copied Wallet Address and select the relevant blockchain to begin importing your transactions.
Step 2: Calculate your Metamask taxes
Once you have uploaded all of your transaction history including your that from your Metamask, Divly will be able to perform your tax calculations for you.
Common issues when calculating your Metamask taxes
When importing transactions from Metamask, understanding them can sometimes be complex or confusing. Below are common happenings that require some extra attention:
Decentralized trades can sometimes include three or more currencies in the same transaction, making it risky for Divly to match the correct value of each traded token. For example, a user may use PancakeSwap to exchange 1 BNB for five different tokens in the same trade. This makes it hard for Divly to understand how much of the 1 BNB was technically traded for each token. In these cases they are imported as deposits and withdrawals. The tax effect is the same as if it were a trade, excluding transaction fee deduction. You can choose to manually split the trades up or leave it as is.transactions page.
Smaller obscure tokens imported may have the same currency abbreviation as another larger more common cryptocurrency. For example, the currency abbreviation BIT is shared with multiple cryptocurrencies. Divly uses the pricing information for the largest one which may not correspond to the token you used. To fix this change the Value in local currency on the affected transactions.
Smaller obscure tokens are often hard to find pricing data for. When importing these tokens, expect to have to manually edit pricing in Divly. This will be made evident with the Missing Price Information warning, so they will be easy to locate and fix.
It is common for users to have tokens airdropped to their Metamask accounts without their knowledge. These will be imported as Deposits in Divly and for your own sake are worth labeling as Airdrop. Assuming you have not sold or traded them, airdrops will not affect your tax outcome.
If you have any issues with calculating your Metamask taxes, feel free to contact our support team which is available via the online chat on the bottom right hand corner of our website.
Step 3: Declare your Metamask taxes
Once the tax calculations are done Divly will provide you with all of the documents you need for your tax declaration. Furthermore, Divly's reports contain information on how and where to declare your tax information. Our country guides also include detailed guidance on declaring your cryptocurrency taxes.
FAQ
How do I get my tax info from Metamask?
Metamask itself doesn't offer tax reporting features, but you can easily obtain your tax documents by leveraging cryptocurrency tax software to analyze your transactions for your declaration.
Is Metamask legit and safe?
Yes, Metamask is a legitimate and widely used cryptocurrency wallet, known for its safety and reliability. It employs robust security measures to protect your assets. Though, like any digital wallet, ensuring the security of your private keys and practicing safe browsing habits are crucial.
Can the tax authorities see my Metamask transactions?
While Metamask transactions occur on the blockchain and are publicly visible, Metamask itself does not directly report to tax authorities. However, tax authorities, including the IRS, often work with blockchain analysis companies like Chainalysis to monitor transactions for tax compliance.
Regulations such as the EU's DAC8, indicate a future where crypto service providers, will need to share client information with tax authorities.
Any tax-related information provided by us is not tax advice, financial advice, accounting advice, or legal advice and cannot be used by you or any other party for the purpose of avoiding tax penalties. You should seek the advice of a tax professional regarding your particular circumstances. We make no claims, promises, or warranties about the accuracy of the information provided herein. Everything included herein is our opinion and not a statement of fact. This article may contain affiliate links.