Credit Karma had spotted the problems, Lin told me, and spent the first several weeks of the tax season rewriting questions. “There was a lot to learn there,” he said. Credit Karma launched a live chat feature so users can ask for help from tax professionals. Lin said he's already planning many more improvements for next year’s tax season.
As of the early weeks of the tax season, TurboTax and H&R Block seemed to be holding on to market share, Gil Luria, director of research at D.A. Davison & Co., said, based on the companies’ results as of late February and on filing data from the Internal Revenue Service.
Intuit Chief Executive Officer Brad Smith said Credit Karma could actually help TurboTax, by expanding the number of Americans who think about doing taxes online, rather than paying hundreds of dollars to hire a professional.
“After that, we’ve got to have the easiest product, and it’s got to deliver the best value for the price,” Smith said. Intuit’s investments in new technology help make it worth the money, he said. “We have to make sure we’re the last man or woman standing. That puts our energy into the innovation that’s not easily matched.”
For example, TurboTax has expanded its SmartLook feature, which lets users chat with tax professionals by video. The pros can see the customer's screen and help navigate tricky issues in real time. Smith said Intuit is investing heavily in artificial intelligence, machine learning, and big data to make filing taxes quicker and easier.
H&R Block is also emphasizing technology this year, teaming up with IBM’s Watson supercomputer to redesign tax prep in the company’s storefront offices.
Lin is skeptical of the tax industry’s tech ambitions. “A lot of that is just sort of a marketing gimmick,” he said, calling artificial intelligence a “new catchphrase” for the sort of data analysis that tech companies, from Amazon.com Inc. to Netflix Inc., have been doing for a decade or more. “You’re not a rocket scientist trying to hit an orbit on Mars,” he said.
Someday, Lin hopes, Credit Karma's platform will be able to pull together users' 1040 forms automatically by pulling data from a variety of sources. If your credit report shows you have a mortgage, for example, the software should make sure you’re claiming a mortgage interest deduction.
“This is year one," Lin said. “This is just the beginning of a big investment we’re going to make in the space.”
For now, Credit Karma’s product is simple. Certainly the price is right. With millions of Americans waiting until the last minute to file this year, Lin is hoping that will attract procrastinators desperate for help but wary of a big fee.
This article was provided by Bloomberg News.