Not long ago, a small headline blipped onto the news radar. It said that Credit Karma (A popular free credit score company) had just bought out an online tax preparer, and would begin to offer absolutely free tax filing to anyone interested in their new services. I don’t know about anyone else, but this is huge news for not only the average filer like myself, but for online tax preparers. Even the companies that are now household names, should have felt the shift in the trade winds.
Filing taxes every year is riddled with excitement, relief, and anxiety. Before I discovered the sheer convenience of e-filing, I remember staying up with my dad at the dinner table, as he explained how the whole “paper process” worked. Even filing my meager part-time/college kid income, was a daunting task. As a matter of fact, that night scared me so much, that I don’t think I even filed for the next year. Dumb kids, right? The kind of new adults who won’t file an auto claim with the insurance (even when it wasn’t their fault), just because the process was so alien.
Fast forward almost a decade, and I’m a pro online filer. I have my own personal account with my online preparer, my past returns in clickable bars on my left and my fresh new return, waiting before me. I see the amount of my return fluctuating in the right hand corner of the screen as I click through the questions. It’s almost like playing an IRS-themed slot machine. It can be a fun ride, if you know that you are owed a decent return. It’s a tad stressful at the same time, but all the while, I feel like I’m being virtually hugged by my little online preparer. Their color scheme is bright and inviting, their font is friendly and bubbly, reminding me of days-past, in grade school, where I read about Amos the Turtle, and Cindy the Armadillo. Their language is cute and helpful, as if Amos the Turtle himself is guiding me through the process... But what is this? Why am I being asked in such a friendly way to upgrade my online package because my income reaches the limit? And why do they get a cut of my check?
This situation isn’t news to e-filers. Some years, you fall into the income slot, with hardly any fees. Other years, one is lucky to receive a coupon. It can get even more complicated for those who have to itemize every year, including state taxes to boot. All of that, I believe, is coming to an end. The internet is in its golden age. Soon to be gone, are the days where we have had to pay for every convenience, and add on. Some companies have discovered the genius in making money not off of their patrons, but off of other companies that want their business. Of course, this is advertising, and that is nothing new, but it is the way in which some companies are using it, that is changing the internet services game.
For instance, it used to be a pain to request a credit report. Not only did you have to pay for these services, but you had limits as to how many times you could pull your credit score. So you were left in the air, wondering how badly that auto loan inquiry hit your score. Then came Credit Karma, their business model was to provide users with real-time access to their credit scores, open accounts, as well as any hits or inquiries they may have received within the past month. The service not only provides this information, but it also gives users recommendations as to how they can improve upon their credit scores. Credit card companies and banks pay Credit Karma to pitch cards and loans to those who would more than likely qualify in their user base. A slight disclaimer here: I’m not here to sell you on Credit Karma, just on the idea that their involvement(and perhaps other companies in the future) with e-filing, will change how tax filers will be treated going forward. Now that they have thrown their hat into the tax game, they are offering no filing fees, or “gotcha” fees, with no income limits deterring someone from filing because of the size of their paycheck. If interested, I would highly recommend reading this Forbes article.
This change in corporate consciousness, where one no longer has to pay for a convenience, is exciting new ground for the consumer, and especially the tax payer. For the other e-filing companies that have been in the game for decades, this means, they will have to get with the times, or go the way of Blockbuster. When it comes to the old saying of “death and taxes,” perhaps the tax part, or at least the filing part, won’t be as foreboding in the future.