Money at 30: Keeper Tax Review
Being self-employed means playing by a completely different set of tax rules. Of course, the odds of freelancers, gig workers, and others all being well versed in tax law is rather slim. In other words, many of us (myself included) could use some help navigating the world of tax deductions when it comes to our businesses.
That’s where Keeper Tax comes in. Built for freelancers and the self-employed, Keeper Tax aims to make it easy for taxpayers to find business deductions and save money on their taxes. So how does it work and how does it stack up against other options? Let’s take a closer look at what Keeper Tax has to offer.
What is Keeper Tax and How Does it Work?
Something to mention off of the bat is that Keeper Tax offers prospective users a 30-day free trial. During this time, you’ll have full access to all of the platform’s features and get a feel for how it works. Of course, you will need to provide a payment method ahead of time that will be charged once your trial is up — although you can visit Settings to cancel your membership before that happens.
Speaking of payment, Keeper Tax is currently $24 a month. Like with other bookkeeping software, this fee is tax deductible (since it is, indeed, a business expense).
Signing up for Keeper Tax and connecting your accounts
To join Keeper Tax for your free trial, you’ll first need to provide some info and set a few things up. This process starts with some basic questions, including “what kind of work do you do?” Answering this simple inquiry will show you how many potential types of deductions might apply to your profession. By the way, you can select multiple jobs. After this, you’ll answer a series of other questions and watch the deduction possibilities rise with each answer. This survey includes what transportation you use for work, whether you work at home, how much you travel for business, etc.
Then, it’s time to actually set-up your account. Naturally, this means providing your name, email address, and phone number. With that out of the way, the next step is to connect your various accounts so that Keeper Tax can sort through your transactions and find business expenses. Like with most FinTech apps these days, this functionality utilizes Plaid — a service that was recently acquired by Visa. With Plaid, you can log into your bank account and allow Keeper Tax to view transactions. This data is read-only and your login data is not provided to or stored by Keeper Tax. You can connect multiple credit cards, banking accounts, and more to the platform to ensure that all of your transactions are accounted for. As I mentioned, you’ll also need to select a payment source to start your free trial and start exploring Keeper Tax for yourself.
Transactions and Business Expenses in Keeper Tax
The main benefit of Keeper Tax is that you can sort through your transactions and designate certain purchases as business expenses. This will, in turn, save you money on your taxes since many of these transactions can be deducted from your income. Moreover, since many freelancers tend to use the same bank accounts and credit cards for both their personal and business finances, software like this can help detangle the mess and help you find these prized deductions.
To that point, Keeper Tax does do a nice job of simplifying the process. Not only does the service provide a clean interface where users can attest to whether a transaction was business-related or not but then can also mark off transactions from that same vendor, saving them the trouble of going through each one manually. As these purchases are labeled, you’ll see a running total estimating how much you’ll be saving on your taxes (based on your tax bracket) thanks to these eligible deductions.
One of my favorite features on Keeper Tax is the use of SMS — also known as text messaging. As part of the service, you may receive texts asking you about potential business transactions. Then, all you need to do is respond to the text in order to have the purchase in question correctly categorized. Should you prefer not to receive these messages, you can opt-out of this feature by visiting your settings.
I should point out that, when you join Keeper Tax, the service says that you’ll be matched up to a real-life bookkeeper who can help you find deductions. However, that doesn’t mean that the SMSs you receive are coming from a human. As it states in their FAQ, “Many messages are automated by software, so that our bookkeepers can save time, and so that we can keep our fees low.” This is actually a benefit in my book, although I’m still curious what level of interaction the flesh-and-blood bookkeeper has with your account. In any case, just remember that you’re almost assuredly talking to a bot when these messages arrive, so be sure that you’re clear in your responses to ensure that the proper function is executed.
Transaction categories and deductible amounts
Since vendor credit card coding is a complicated science, there may be times when you encounter a transaction that’s mislabeled. Luckily, this is easy to correct as clicking a transaction will provide you with more info about the purchase — including what card was used, what your original statement said, etc. — and give you the chance to adjust the label. FYI: this is also where you can split a transaction if a transaction was only partially for business. Just hit the pencil icon next to the “tax deduction amount” and enter a dollar figure for the business portion of the purchase.
For those who still use paper money from time to time, Keeper Tax also allows users to track purchase they make in cash as well. To do this, simply select the “add transaction” options; enter the business name, amount paid, and date of purchase; and select a category. And just like that, your cash is accounted for.
After you’ve finished compiling all of your business transactions for the year, you can export a file from Keeper Tax that can then be utilized by a tax professional or by another tax filing service. Depending on how long you’ve been a member of Keeper Tax, this may mean paying an extra fee. For example, since I was looking to export my 2019 transactions and I didn’t sign-up for Keeper Tax until 2020, there was a one-time charge of $39.99 to obtain this report. That may be understandable as it prevents people from signing up for a free trial and making off with the goods but I was admittedly surprised to encounter this when I went to test the function.
Having explored Keeper Tax’s platform a bit, there’s a lot that I like about it. As I noted, the process is quite simple and, unlike some issues I’ve had with Quickbooks, I didn’t encounter any duplicate transactions during my trial — but some authorization charges did manage to make their way into my transaction list. In any case, I do have a few thoughts to note.
For one, while the ability to check-off multiple similar transactions at once is great, make sure you pay attention when using this feature. While you might assume that setting a transaction as “personal” and then clicking the button for similar transactions might apply this same template those purchases, in reality, checking the boxes for each transaction will mark them as business (meaning you should leave them blank if you want to label them as personal). Honestly, this is my fault for not reading it the first time I did it, but I still feel like it could be a bit more intuitive.
Also, I will say that comparing Keeper Tax to Quickbooks Self-Employed, one feature I really like in the latter is the ability to see specific items purchased as part of an Amazon order, allowing you to better determine whether the items were a business expense. Sadly (though understandably), Keeper Tax does not have such ability.
Keeper Tax mobile app
Although I mostly explored the desktop site version of Keeper Tax, the service also offers a mobile app. Incidentally, the latter is very similar and offers most (if not all) of the same features. That’s a great thing as it makes it easier to keep up with categorizing transactions even when on the go.
Filing Your Taxes Through Keeper Tax
In addition to their bookkeeping features, Keeper Tax also enables you to file your taxes through them. Once again, the interface for this is simple and mostly takes the form of a questionnaire, leading you through all of the necessary elements that make up your return. Of course, your deduction data will also be applied, saving you the trouble of having to reupload it or enter it manually.
While I did go through several of Keeper Tax’s steps to start filing, I have to admit that I did not complete the process — but there are a couple of good reasons for that. First of all, I’m simply not ready to do so yet (hey, I have until July 15 this year!). Perhaps more importantly, this aspect of Keeper Tax comes at an additional fee: $89. This does include both a federal and state filing. So, since I already have the Quickbooks/TurboTax bundle that includes filing, I’m sad to say it’s not worth me spending another $89 just to try Keeper Tax’s option. But perhaps I’ll get a chance to try it out in the future and will report back accordingly.
Final Thoughts on Keeper Tax
For freelancers and other self-employed workers, there’s a lot to like about Keeper Tax. In my case, as someone who always seems to be behind on categorizing business expenses, the text message option that the platform provides is genius and could definitely help save me time and hassle in the long run. Additionally, I do find their interface to be more straightforward and focused than some of their competitors.
That said, one downside to Keeper Tax is the price point. For $25 a month, my Quickbooks Self-Employed subscription includes the business expense tracking feature as well as the TurboTax filing each year. Meanwhile Keeper Tax is $24 a month on its own and then another $89 to file. On top of that, while I may prefer some of Keeper Tax’s features, Quickbooks seems a bit more powerful overall.
Nevertheless, if you’re looking for a Quickbooks Self-Employed alternative and want to be encouraged to stay on top of your expenses, Keeper Tax could be a great option. Plus, since they do offer a 30-day trial, there’s really no harm is checking it out for yourself and seeing if it’s worth making the switch.
Also published on Medium.