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Launch HN: Keeper Tax (YC W19) – finding tax write offs in bank statements
71 points by pkoullick92 17 days ago | hide | past | web | favorite | 75 comments
Hi HN,

We are Keeper Tax (https://keepertax.com). 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.

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.

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.

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.

The user experience is: we text you yes / no questions a few times a week. Examples include “Hey, was today’s lunch at McDonald’s shared with clients / 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&R Block, etc to file.

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 :)

Thank you HN! Looking forward to hearing your ideas and feedback!

[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.




> 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.


> 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.

It'd be refreshing to have a model of "we have specialized liability insurance, if you're honest with us and we make a mistake in your filing, we'll cover it, including any penalties".


I Love it! That's great. Even better :)


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!


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

If I had a nickel..


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?


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

I'm not you're target market (I'm a W-2 employee), but I would not share something as sensitive and personal as my full purchase history with a company that didn't explicitly state that they would never mine or sell that data. Especially for a service that I'd be paying for.


> the customer would presumably be on the hook for any rejections or audits

And penalties.


To some extent, yes - the customer is always going to be on the hook for telling the truth. For example, we can ask: did you go out to that dinner with a client or coworker? The customer could lie and say yes, in order to claim more write offs. There's not much we can do about that.

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.


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.


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...

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


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 :)


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%.


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.


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.


$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.


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! :)


> 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?


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.


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.


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.


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?


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.


https://www.gotruffle.com has a one-time fee :-)


I expect in part because it's a more predictable revenue stream. $10/mo from every user is better than $120/year, especially when that payment would only show up in April, and the company would go the rest of the year without revenue (assuming no other follow-on products). Cash flow is king.

Also if a customer cancels mid-year, presumably they still get to keep any monthly fees, even though the customer ends up not using the data.

I think in the end there's also a user experience aspect to it. Paying a monthly subscription is something people are used to. Getting a service "for free" for most of the year, but then finding (to intentionally use harsher language) that the data generated by the service is being held hostage behind a paywall, would likely leave a bad taste in some customers' mouths.


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.


Thanks Maslam! We've been trying to figure out how much to charge, and I do think certain folks are willing to pay a lot more.


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


$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..."


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.


"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.)


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!


Yes! I think part of the reason we were afraid of charging more is exactly what you're quoting "I'm not sure this is going to provide me with value yet"


Wow! That's so interesting :)


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?


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!


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.


Note that some large U.S. banks already automatically categorize credit card expenses in a single neat report at the end of the year, for free.


Thank you


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!


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.


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.


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)


Fantastic. Sending you an email now.


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


phocrumuha@mywrld.site


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


Will you go back and do my classification for tax year 2018?


Actually, yes. We offer it as a pilot for folks who really want it and are willing to put up with some bugs :) Just text your bookkeeper "HN 2018 tax prep" and we'll set it up for you. It takes 1-2 weeks.


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.


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?


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-...

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

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

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


Granting purchase access is similar to handing someone my bank statements every month. I wouldn't feel comfortable doing that with friends let alone companies without a big guarantee of compliance and security. Mainly it's due to years of seeing data breaches at companies big and small (along with shady secondary business models). Again, this looks like a great service and is actually useful to me but if I'm passing over my info I want bank-level guarantees these days. Best of luck!


"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.


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.


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.


Touche.


H&R Block tried to charge you $30 per month @nicksecurity ?


No, one time. They have a new service that lets you file for free online if you're doing regular, tax filing. It finds deductions for you and everything. All through web with no software to download. I decided to try it.

https://www.hrblock.com/online-tax-filing/free-online-tax-fi...

Their gimmick is to use popups to try to get you to buy two things:

1. Convenience of importing your W-2 data vs manually typing it all in. It kept popping that up trying to get me to buy that. Then, after saying I'll manually enter everything, it tells me there's some way to automatically get a W-2 from registered employers where it has all the information already. It did that. So, I didn't pay a convenience charge but got same thing looks like. Sneaky.

2. Keeping all the stuff on file with unlimited access. They only keep the tax documents for a limited time with the free option. Site reminds you that you will have to pay some high fee to the IRS to get them outside that window. I just printed a copy (shrugs).

Overall, the free filing was extremely easy to use with the get help links being really helpful. Got more back than I did with a tax professional last year. Partly due to not paying a tax professional. :)


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?


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!


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


Yes! We can handle credit cards and Paypal! In fact, we can handle basically all U.S. based financial institutions.


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.


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


Great idea. Do you support Canadian users too? Thanks


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 :)


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


There's only one way to find out ;)


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



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


Us too!


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.


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.




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