How Keeper helps tax payers save $1200 a year by spotting deductions
Every year around 40 million Americans overpay their taxes by an average of $1200! Many of these people are freelancers or moonlighters. On the VatorNews podcast, Bambi Francisco Roizen speaks to Paul Koullick, founder and CEO of Keeper, a company on a mission to stop these personal finance mistakes. Keeper is a next-generation personal finance software platform that literally combs through your personal documents and puts your tax returns together. No more filling out tax forms; just send off your relevant documents such as bank statements, 1099 and credit card statements to Keeper, and it will prepare your taxes, and find savings for you.
Highlights:
- Before Keeper (short for bookkeeper), Koullick held product leadership roles at fintech startups, such as Square, where he built new product and business lines. He saw the pain points for small business and freelancers as well as the process of tax preparation so he started Keeper five years ago.
- Keeper is an AI-based tax software built on top of transaction data. Keeper combines the best of personalization and safety that you get with an accountant with the best stuff you get with software, including accessibility and immediacy.
- The largest pain point he found was that tens of millions of Americans were overpaying their taxes. Most people err on the side of prudence and don’t make false claims about business deductions. Hence, unless a person has a personal accountant looking through their transactions, many deductions are not reported and tax returns are not optimized. A study conducted by Keeper found that 20% of tax filers deduct their phone bills.
- Four out of five of Keeper’s customers are freelancers.
- Today, Keeper supports tax preparation but as it continues to make money for their customers, the trust built allows Keeper to handle more than tax.
- AI works really well with taxes because tax is a language-based space. It’s well-documented and all tax codes are accessible. With the client-facing part of tax, there’s also a lot of Q&A and a lot of data-intensive parts of tax, making tax a great application for AI.
- So do people interface with Keeper? A user uploads their bank statements, credit card transactions, receipts and 1099 and other pertinent information. Keeper looks through all the documents and prepares the taxes all the while asking questions of the user. Keeper makes suggestions and predictions that are the basis for questions. Turns out 98% of the time, Keeper’s suggested deductions are applied.
- Even though much of the work is an AI-driven trained agent, there is a human involved. A human actually signs off on the tax return. But given that much of the work is done via software, Keeper’s gross margins are 75%.
- Keeper saves its clients an average of $1200 a year in savings, making its $200 annual cost well worth it.
Listen to the rest of the podcast where Koullick talks about how Keeper is differentiated from competition and the macro trends driving Keeper’s opportunity as well as where he sees tech innovation taking personal finance in five years.
Steven Loeb