Many or all of the companies featured provide compensation to LendEDU. These commissions are how we maintain our free service for consumers. Compensation, along with hours of in-depth editorial research, determines where & how companies appear on our site.
Keeper Tax is a tax software specifically designed for freelancers who are 1099 contract workers. The app helps those who work in the gig economy save money by identifying potential tax write-offs based on their purchase histories — things like phone bills, home office expenses, car maintenance, and more.
According to Keeper Tax, nearly one-third of today’s working Americans earn some form of 1099 contract income. The company also estimates that the average U.S. gig worker overpays on their taxes by 21%. That amounts to roughly $1,550 for a gig worker making $25,000 per year.
Whether you’re newly self-employed or someone who freelances in addition to your full-time job, Keeper Tax might be worth considering if you’re struggling to understand the tax laws that apply to you. Here’s what you need to know about the service.
In this review:
Getting to Know Keeper Tax
Keeper is a robo-advisor that automatically tracks your purchases and highlights expenses that are potentially tax-deductible.
Keeper claims the average user saves $173 per month on taxes, which adds up to $2,076 per year. Although the company does not currently do tax filing, it plans to start offering quarterly filing in June and full tax filing services in 2020.
The Keeper Tax service is $10 per month, but this fee is only charged if Keeper has found at least $50 in tax savings that month. The company also offers some tax guides for specific types of freelance workers, including dog walkers, social media influencers, and others.
Working With Keeper
In order to set up the service, you need to grant Keeper access to your bank and credit card accounts. You’ll then answer some questions about what kind of business you’re in so that Keeper can start identifying potential tax write-offs in your purchase history.
If Keeper sees a tax write-off among your expenses on any particular day, you will get a text message. It also might ask you clarifying questions about the purchase. Over time, the system asks fewer questions because it learns your spending habits and can more easily identify potential savings opportunities.
Get smart about your freelancer taxes
- 1 tax filing software for US freelancers
- Automatically finds tax write-offs among your purchases
- Put expense tracking on autopilot
- No apps, no categorization, no receipts. That’s that simple
Who’s Covered by Keeper?
There are a number of gig workers and self-employed individuals who could benefit from using Keeper Tax, such as delivery drivers, real estate agents, Airbnb hosts, Uber drivers, journalists, and more — Essentially, anyone who receives 1099 income.
>> Read More: 1099-C Explained
Keeper provides free guides for these professions that identify common tax write-offs you might have in each industry. For example, Airbnb hosts might be able to deduct the money they spend on guest amenities and treats, cleaning services, maintenance and redesign, platform service fees, property insurance, Wi-Fi, streaming services or cable, home office furniture, and more.
General tax-savings opportunities might include software expenses, industry education, mileage, and working meals.
>> Read More: Airbnb Financing Options
The Benefits of Using Keeper Tax
There are a lot of potential benefits to using Keeper Tax. For starters, if you’re new to the gig economy or to being self-employed, it’s hard to know which expenses may be tax-deductible. Keeper helps you identify possible tax deductions based on the kind of work you do.
Keeper Tax is also easy and straightforward to use since it works automatically once your accounts are connected. The fact that it sends you daily messages to identify expenses before you forget what you bought something for is also beneficial. And, of course, another big bonus is how much you could stand to save on your taxes.
Cost-Benefit Is Focused on Users
According to Keeper, the average user saves $173 per month on taxes. That’s a significant savings. However, if that’s not your experience you might not have to pay for the service at all. Keeper charges users $12/month. It also comes with a free 30-day trial.
If you want to get your past expenses clarified for previous months (i.e. before you signed up for the service), you’re charged the same $12.
Simple Daily Interactions Via SMS
Because Keeper Tax checks in with you daily, you can avoid the uncertainty and hassle of tracking your contracting and gig expenses on your own. Knowing how much you’re spending on your business can let you more accurately project what’s coming in versus what’s going out.
Improved Tax Record Keeping & Tracking
With Keeper Tax, all your expenses are categorized and tabulated without the need to save receipts. That will make doing your bookkeeping and expenses much easier. Although many people believe you need to save receipts, bank statements are considered IRS-compliant.
When you’re ready to do your taxes, all your expenses will already be stored and categorized, making the process of filing that much smoother.
Tax Filing Service
In 2019, Keeper Tax launched a tax filing service for a flat fee of $89 (federal & state included). All tax savings identified in the platform are seamlessly categorized and included in the tax return. However, the service is still fairly basic and doesn’t have support for certain credits and situations such as property sales, international income, and multi-state income.
The Downsides of Using Keeper Tax
The main downsides of Keeper Tax stem from the fact that it’s designed for solo-preneurs and more casual freelancers.
Traditional accounting software capabilities such as invoicing, income tracking, payroll, and so on are not supported at this time.
In addition, Keeper Tax doesn’t deal with cash expenses, although you can take a picture of cash receipts and send them to the certified public bookkeeper assigned to your account, who will then categorize the expense for you.
There is other software available that provides more sophisticated help for people who need these additional features. For example, Quicken can help you track income, deductions, and invoices, albeit at a higher monthly fee.
Focused on the Self-Employed
It’s important to note that those who work a traditional corporate job and do not have any 1099 income will not benefit from using Keeper Tax. It is a niche service just for freelancers and those who are part of the gig economy. If you have a full-time job but moonlight as a freelance, however, Keeper Tax could still help you.
Ultimately, Keeper is an easy-to-use service for those who are new to the gig economy and need help identifying potential tax write-offs and categorizing their expenses. Once it begins offering tax filing help, it could be a one-stop-shop for all your tax needs.
Author: Jeff Gitlen