
Launch HN: Keeper Tax (YC W19) – Find tax writeoffs in bank statements - pkoullick92
Hi HN,<p>We are Keeper Tax (<a href="https:&#x2F;&#x2F;keepertax.com" rel="nofollow">https:&#x2F;&#x2F;keepertax.com</a>). We help US contract workers automatically find tax write offs in bank statements. We do this by monitoring their purchases for tax deductible expenses -- like phone expenses, insurance payments, and home office expenses -- using a team of accountants aided by fancy computer stuff.<p>The company is born out of frustration with how many people doing 1099 gig work -- rideshare, taskrabbit, online tutoring, and so on -- are overpaying on taxes. By our estimates, the average gig worker overpays on taxes by 21% (for context, that’s around $2,000 if you earn 40k) [1]. A fancy accountant could prevent, but fancy accounts are expensive. That’s why we’re building Keeper.<p>But it’s more than just a low price. We want to make something accessible to people who don’t actually know much about taxes, or care to (i.e. most of us). That’s why we think the solution is to tell, not ask, when it comes to tax deductions.<p>Your monthly phone bill is a great example. Many gig workers wouldn’t think their phone bill is a tax deductible expense. However, it’s partially deductible since you undoubtedly use your phone for work. But that sword cuts both ways -- many people will eagerly try to deduct haircuts, clothes, and other personal effects. The IRS is very strict that these are not tax write offs, so these folks risk getting themselves in trouble for an understandable mistake.<p>The user experience is: we text you yes &#x2F; no questions a few times a week. Examples include “Hey, was today’s lunch at McDonald’s shared with clients &#x2F; coworkers?”, or “Do you use your Spotify account to play music for your rideshare passengers?”. The text messages are partially automated, but we hire an accountant to monitor things and jump in when needed. At the end of the year, you can export your write offs seamlessly into TurboTax, H&amp;R Block, etc to file.<p>We’re currently piloting the service with +100 paying users. We charge $10 per month because it’s simple, but eventually want to move to a model where we charge a small percent of the tax write offs we find for you. Aligned incentives :)<p>Thank you HN! Looking forward to hearing your ideas and feedback!<p>[1] 21% stat is based on comparing a sample of eleven 1099 contractor’s 2017 tax returns against what we found when digging through their bank statements. Biggest sources of this discrepancy is missing the home office deduction, forgetting to claim car insurance payments and other non-obvious transportation expenses, and forgetting to track business meals.
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koolba
> We do this by monitoring their purchases for tax deductible expenses -- like
> phone expenses, insurance payments, and home office expenses -- using a team
> of accountants aided by fancy computer stuff.

Are you storing or otherwise processing the transaction records for any other
purposes or data mining? Alternatively, do your terms allow that in the
future?

Knowing _every_ purchase a person makes is going to be a tantalizing data set.

> We’re currently piloting the service with +100 paying users. We charge $10
> per month because it’s simple, but eventually want to move to a model where
> we charge a small percent of the tax write offs we find for you. Aligned
> incentives :)

Maybe not totally aligned though as it’d be in your interests to be as
aggressive as possible with write off claims while the customer would
presumably be on the hook for any rejections or audits.

~~~
dkang009
Thanks for your initial thoughts! We do need to store purchase history to
improve our predictions, but we have no plans at the moment to do anything
else with the data.

@pricing - we haven't really figured out our pricing model yet - that's why
we're sticking to a low flat fee for now!

~~~
soared
> we have no plans at the moment to do anything else with the data.

If I had a nickel..

~~~
fhbdukfrh
And yet to a different concern about granting access to digital data the
response is"what concerns do you have with sharing purchasing data?"

Naivety or purposely deflecting from the very real concerns many have and
everyone should?

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myroon5
What percentage of these workers benefit from itemizing deductions? This seems
very helpful if you're itemizing, but I thought most people will just take the
standard deduction, especially after the recent standard deduction increase.

~~~
pkoullick92
Great question! Lots of components here. In short our stance is that 99% of
contractors should itemize at least some of their expense write offs.

What about the standard deduction? [https://blog.keepertax.com/posts/should-i-
still-track-expens...](https://blog.keepertax.com/posts/should-i-still-track-
expenses-for-part-time-1099-work)

Mileage vs. actual car expenses: [https://blog.keepertax.com/posts/should-i-
claim-mileage-or-a...](https://blog.keepertax.com/posts/should-i-claim-
mileage-or-actual-car-expenses)

~~~
myroon5
That first article is fantastic. Especially the personal vs. 1099 deductions
chart. I'd love to know what else falls in "... and so on", but I guess that's
where your service comes in :)

~~~
pkoullick92
Woohoo! Yeah part of our ethos is to make taxes easier to understand for
everyone so we put effort into our content.

We do list out tax write offs for different types of contracting work on the
blog as well, but we don't go very deep into personal write offs since it
doesn't matter much unless you're part of the 1%.

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thaumaturgy
The site currently vomits up a really nice debugging page if the browser's
localStorage is disabled (as my usual browser is). The gray text at the bottom
suggests that you've got a "development" flag currently turned on in
production. Might wanna check that.

I'm not 1099 currently, but I was for about 10 years and taxes are one of the
2 main things that eventually kicked me back to a regular job. I was terrible
at keeping track of all the little charges and receipts for everything. Xero
helped, but ultimately I ended up owing about $8k of taxes on $30k gross a few
too many times and it just wasn't livable.

So I really hope you guys do well.

~~~
pkoullick92
Thank you! Repro'd the localStorage debugging and you're right - we'll clean
that up.

Thanks for sharing your story re: 8k on 30k - that's pretty bad :) either you
claimed next to nothing in write offs, or you were in a very high tax bracket
... maybe both.

Nice to meet you Rob.

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jchallis
$10/month undersells both the value of your service and your cost to provide
it. My first thought was : either they're going to go out of business or they
are going to raise prices.

If you want an easy promotion say that it's $20/month and HackerNews readers
get a super sweet, time-limited, doorbuster 50% discount.

~~~
pkoullick92
You're right.

Hacker News, go and lock in your sweet time-limited doorbuster 50% discount
BEFORE we go and update our prices to $20 per month! :)

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RHSeeger
> We charge $10 per month because it’s simple, but eventually want to move to
> a model where we charge a small percent of the tax write offs we find for
> you.

Does that mean you'd need to examine the person's full tax filing in order to
determine what you've found that they did not?

~~~
pkoullick92
Good question! We'd love to do that if there was an easy way to. It would
actually just be a portion of all savings due to write offs recorded with
Keeper. Savings are calculated using your actual effective tax rate, and other
necessary multipliers.

~~~
RHSeeger
My point was more that it would be hard to identify savings recommended by
Keeper that were previously unknown the to user. It could recommend tax
savings due to heating/phone/internet of the home office but, if the user was
already accounting for those, pointing them out provides no actual benefit.

------
soared
Why is this a monthly fee and not a one-time purchase that occurs when filing
taxes? You can just export my purchase history all at once.

Do you support your users when they get audited? My tax software guarantees
support if there are issues.

~~~
pkoullick92
Interesting idea!

So basically we'd hold the data hostage ;) I'm curious - why is that's a
better model, in your mind?

We support users if they get audited in the sense that we'd give them all of
their data recorded with Keeper and help answer any questions. Ultimately, we
base all of our suggestions on information the user has told us, but we can't
guarantee that the answers were truthful.

I'm curious - what tax software do you use, and what's their audit claim?

~~~
jjeaff
No tax software is going to offer to defend you in an audit. Dollars to
doughnuts the fine print claim is that they will take responsibility in the
case of a math error or bug in their software that triggered an audit.

Deductions rely fully on what the software user enters.

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maslam
Wonderful service. I really like the idea. I think $10/month is way too low
for the value you provide - think of the tax savings, and auditing
capabilities you could provide. Good luck, I think you should charge more.

~~~
fierro
agreed. I'm not a contractor. But these days 10$/month is almost too low for
me to even think a service is going to actually work. My price point would be
closer to 25-30$ per month

~~~
JoshTriplett
$10/month is a great price for "I'm not sure this is going to provide me with
value _yet_ ".

"As of now, we've now found you deductions that'll save you more than $3000 in
taxes this year alone. To get more deduction information this year, please
upgrade..."

~~~
fierro
That's a good point. But why not provide a free way to gauge how much the
service can save you, then charge appropriately? Why should I pay 10$ to see
how much I can save? I'd rather know that for free, then pay a higher amount
to actually have you tell me what those ways to save are.

It could be that I'm weird, but 10$ for me triggers some bias in my mind that
makes me think the service is not legit, is fragile, won't realy do all it
claims, etc. Strange.

~~~
JoshTriplett
"Here's a free service, give it access to your bank statements" does not
inspire confidence.

(And I imagine that if you paid $10/month and it didn't find anything
worthwhile, you could probably request a refund.)

~~~
fierro
ha yeah good point. tough to give anyone access to bank/transaction info.
interesting that paying someone else money and then giving them access to your
bank statements would make you feel better!

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yjhoney
I have a separate credit card that I use for all business expenses and I write
everything off from the credit card statement during tax season. Is there
still value for me to use KeeperTax?

~~~
pkoullick92
Good question!

Yes. Two reasons: (1) we will auto-categorize your business card expenses, and
(2) many tax write offs are split personal / work expenses. Examples: gas if
you drive your car for both work and personal use, home office expenses, phone
bill, electronics, etc. Those write offs are really easy to miss out on!

~~~
kazinator
OP will probably pay for these with the business credit card and then deal
with the personal/business split at tax time for specific kinds of expenses
which are on that card. Some will be 100% business only, and some (like
vehicle-related) will be split.

In Canada, the CRA wants self-employed people and business owners to keep
track of their odometer readings and log all trips that are for a business
purpose. They could ask for that if they audit the individual. The fraction of
business use kilometers versus driven is then applied to recurring expenses
like fuel and oil, and also to capital cost allowance: the yearly depreciation
of the vehicle asset.

------
pkoullick92
Hey folks, co-founders Paul and David here. We'll be hanging out in the
comments section today - looking forward to hearing your ideas and feedback!

~~~
imstern93
I think you should probably e-mail/call all groups/agencies that contract out
to workers and sell a bulk deal as a perk for the agency (ie. maids-r-us
contractor pays keepertax $x or x% of total write-offs and maids-r-us can
offer unlimited service to all its housekeepers). I think it will get you guys
more users quickly and allows you to reach out to more potential customers for
less.

~~~
pkoullick92
Word. That sounds right. One of the challenges we've been up against is just
figuring where these contractors are actually spending their time. Thanks for
the tip.

~~~
raleigh_user
I did some consulting work for a similar problem with growth. Home measurement
company that sells to realtors at $100/service. Margin of 15%. Avg customer
only uses service 3 times a year. So they make a whopping $45 a customer. The
only way we were able to grow (initially 50k arr to 500k in 6 months) was
going after big accounts. Its the same amount of work to close a big brokerage
with 100 agents that represents 100k a year in sales vs each agent, one by
one. Send me an email or message if you want to chat more. Id be happy to walk
you through that transition and how we did it (what went well and what didnt)

~~~
pkoullick92
Fantastic. Sending you an email now.

~~~
pkoullick92
Scratch that - how do I message you? I don't see an email on your account

~~~
raleigh_user
phocrumuha@mywrld.site

~~~
raleigh_user
Use this instead. That previous temp expired. wink.bcf29b@tryninja.io

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lancesells
Love the idea and is very applicable to me. I no longer give access to my
finances from any app but I would suggest building out an about page about the
company with faces and names and backgrounds. I know you might be at the MVP
stage but there's a lot of trust missing in a service like this.

~~~
pkoullick92
Thank you for the feedback! We agree. Need to get some semi-professional
headshots and approval from our on-staff CPA first, but it's on the shortlist.

I'm curious, why the hard stance on granting purchase data?

~~~
cosmie
I have a similar stance as the parent post, and it's mainly due to the
pervasive secondary uses of access to privileged consumer-level data for
advertising and marketing purposes.

Plenty of companies gain access to privileged information for a specific
purpose, but utilize that privileged access in completely opaque ways to
create secondary revenue streams. Unroll.me[1][2] is an example of this, as is
the countless apps that ask for location services access for specific
functionality within the app, but then resell that location data to third
parties for ad/marketing/consumer intelligence purposes. With weather and news
apps being the worst offenders.

Since you have a CPA on-staff, your usage may be bound by law[3] to not be
used in such a manner. But I have no idea if so. And without that guarantee,
it's pretty terrifying to give you direct access to my accounts. There's a
whole lot of signal intelligence in that you can glean. If you're using
something like Plaid for automatic transaction aggregation, they even come
with several nifty prebuilt endpoints[4] for you to leverage that
authorization to get a complete view of my assets, an estimate of my income,
and a live view of all of my account balances. Outside of a relationship that
has privacy and confidentiality guarantees enshrined in law, that isn't a
level of insight I want to grant to third parties.

[1] [https://www.nytimes.com/2017/04/24/technology/personal-
data-...](https://www.nytimes.com/2017/04/24/technology/personal-data-firm-
slice-unroll-me-backlash-uber.html)

[2] [https://unroll.me/your-data](https://unroll.me/your-data)

[3] [https://www.bna.com/confidentiality-tax-
practice-n7301447401...](https://www.bna.com/confidentiality-tax-
practice-n73014474017/)

[4] [https://plaid.com/products](https://plaid.com/products)

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nickpsecurity
"but eventually want to move to a model where we charge a small percent of the
tax write offs we find for you."

Make it that or $10 a month where $10 is minimum. ;)

Edit: You might want to make pricing closer to what H&R Block does online.
They've set some market expectations. I think they tried to charge me $30.

~~~
pkoullick92
Haha yes the tax filing giants (TT, HRB) are the kings of funky pricing
claims. They say "File for free!" oh and by the way "State Filing costs
$39.99". As if anyone would only want to file federal.

~~~
nrmitchi
I'm not sure if it's your entire point, but there are 7 states with no
personal income tax, which is a population of ~70M people.

~~~
pkoullick92
Touche.

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moonka
This is awesome. Does you guys look at credit card statements? We've moved all
the business expenses to a separate credit card to make sure we don't miss
anything. How about Paypal?

~~~
zallarak
[https://www.gotruffle.com](https://www.gotruffle.com) supports PayPal.

For the record I think Taxkeeper is super cool. Truffle is totally different;
less of a recurring tool and more of a one-time tool.

Disclaimer: I work on Truffle.

Congrats Keepertax on launching!

~~~
dkang009
Thanks! I'd love to learn more about what you guys are doing as well.

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jeffwass
Looks cool!

How are you getting access to bank accounts? Eg are you using Yodlee or
another aggregator? My understanding is there’s no inquire-only banking API
available in the USA.

~~~
pkoullick92
Correct. We use Plaid to get access to people purchase history and to charge
our monthly fee.

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fuddle
Great idea. Do you support Canadian users too? Thanks

~~~
pkoullick92
Yes we do! Our service is based on US tax law, though. It'll still be helpful
from an expense tracking / organization standpoint but keep that in mind :)

~~~
fhbdukfrh
Except you're selling a tax service, that's where the ROI comes from. There's
a million expense trackers, many custom tailored to us Cannucks

~~~
pkoullick92
There's only one way to find out ;)

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kazinator
In an audit situation, can a bank statements prove a purchase, if the detailed
receipt has been thrown out?

~~~
pkoullick92
Great question! Yes :) [https://blog.keepertax.com/posts/paper-receipts-are-
required...](https://blog.keepertax.com/posts/paper-receipts-are-required-for-
taxes)

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throwaway-1283
I've always wondered why there isn't a mint-like service to help anyone
minimize taxes..

~~~
pkoullick92
Us too!

~~~
throwaway-1283
But why was the obvious first use case for 1099 workers?

I guess I was thinking of an app that would, say, see I have a losing
investment and recommend that I sell before EOY to offset some taxes.

Or put more money into my 401k if I hadn't maxed out by EOY if I was close to
being dropped to a lower income bracket.

~~~
pkoullick92
Well, we wanted to start with something that directly and clearly puts money
in your pocket. Tax write offs are a good one for that - we feel like too many
people donate to the IRS.

When it comes to financial advising, there's a lot we can do but it's also
trickier to automate.

