As tax season rolls around, many around the country will endure the monotonous and mind numbing task of going through their financials in order to determine their tax situation. However, there are many software based tax helpers that come at little to no cost and are widely available to anyone with an internet connection.
Of the many providers, the largest is Intuit’s TurboTax which provides a streamlined way to file and prepare taxes. In fact of the company’s revenue, Turbotax accounts for 89% of all of Intuit’s sales.
A new player in the field, CreditKarma offers users free tax preparation, receiving revenue for the customer’s data rather than charging them a fee for the services. The company also makes money by peddling other products to their users based on the information entered into their tax services.
As similar services begin to pop up, companies such as Intuit and H&R Block will begin to face competition for users seeking to file their taxes for free and may look to switch their revenue models to those similar to CreditKarma in order to keep their customers.
Source: https://www.wsj.com/articles/what-to-know-before-using-free-tax-return-services-1486722601
It will be interesting to see how long the non-tax companies like CreditKarma remain in the tax-prep market, despite their initial attractiveness to the consumer. Taxes are complicated, and require a substantial investment in subject matter experts to produce quality code and support. With talks from the latest presidential administration that taxes may be changing, CreditKarma may have a hard time managing to continuously deliver quality tax advice for “free”, despite the offsetting advertising revenue.