The startup, which was founded in 2015, matches customers with a licensed tax professional who files a return in an average of 45 minutes. To start, users answer a short series of questions, such as whether they own a home or have dependents.
From there, customers receive a guaranteed quote and can upload documents directly to the app. The tax professional can ask followup questions through the app’s encrypted chat function and notify customers when the tax return has been filed and accepted.
“There hasn’t been much disruption in the accounting and tax space for quite a while,” cofounder and CEO Richard Lavina told CNNTech. “We wanted to build something different.”
Prices start at $39, and go up based on the complexity of a customer’s taxes. For example, someone who earned income in several states and owns multiple businesses would be more complicated than a standard W-2 employee who rents an apartment. Taxfyle claims its services run about 40% cheaper than H&R Block.
Lavina got the idea while in an Uber on the way to work as a CPA at PricewaterhouseCoopers. It was tax season, and he calculated his annual salary came out to a mere $10 an hour with all the extra time he was working.
Taxfyle’s key demographic is 24- to 34-year-olds, and its customers include independent contractors, small business owners and freelancers. Lavina said Taxfyle has “tens of thousands of users,” but declined to provide a specific number.
“These are people who try to do it themselves, waste a lot of time, then find out that they owe the government a lot of money,” Lavina said. “They’re looking for a different solution.”
The startup plans to expand from income taxes to quarterly business returns and add more tax professionals to the service. This week, the company announced an integration with Slack, which allows customers to chat with a “Slackbot” that creates their Taxfyle tax profile.
Some people prefer the personal touch and consistency of working with a CPA they know, traditional tax professionals say. “They want somebody to know about them. They want more than just a tax return,” said Christina Monfalcone, president of accounting firm Monfalcone & Garris, which also provides bookkeeping, payroll and management advisory services.
Donald Giannattasio, partner at CPA and consulting firm Seligson & Giannattasio, echoed that sentiment. He doesn’t believe Taxfyle will impact a firm like his, which offers a variety of services, such as estate planning and forensic accounting.
He does see the appeal of Taxfyle for consumers who don’t want to file returns themselves and are looking for a lower price. “Tax law is so complicated and has so many gray areas,” Giannattasio said. “It’s important that you use someone that’s knowledgeable.”