TurboTax is 100% free for State and Fed for many people (probably several tens of percent of the country), anyone with a simple tax return. I use it every year to file for free for both. They try and make money by selling you audit protection, trying to get you to put your refund on their debit card, etc.
I'm not seeing how this is much of an argument for them to buy CreditKarma.
The argument for them to buy it is they then get:
- access to all of that credit report information
- access to the savings account customers
- the linked car and driver information
- more free tax customers to try and upsell audit protection and to try and push returns on their debit card to
- mortgage and other loan shopping data from everyone that's used the mortgage comparison
- potentially as much as 13 years of weekly credit data on given individuals
TurboTax was sued for making it impossible to find their legally mandated free filing product. While many people qualified, they tricked most of them into paying for their paid product unnecessarily.
Just this year they were ordered to make that products slightly easier to find, but they can still do most of their tricks to direct people away from it.
Credit Karma is an existential threat because it makes free filing easy to find.
I suspect after this deal completes, the CK free file product will start having all the same dark patterns and TurboTax's free product.
> They try and make money by selling you audit protection, trying to get you to put your refund on their debit card, etc.
This is exactly the problem. They're not nearly 100% free. It's only free if you manage to navigate their byzantine, dark-pattern-ridden series of questions that effectively ask "Do you want to use the results of the last 12 pages you entered and try to save with TurboTax Deluxe or delete that half hour of work?" and confusingly named products like "Guaranteed Free", "Free Edition", "Start for Free" (all not actually free).
TurboTax makes more than a billion dollars every year. Of course they'll want to squash competitors who threaten to harm that cash cow.
This years TT version actually makes it quite hard to get to Deluxe from Free edition if you get there from e.g. IRS site. Basically what happens is when you get to the end, it tells you "Surprise! Your return does not qualify for the free version!" but doesn't offer you any immediate way to upgrade. There's a sequence of clicks which allows to do that (took me about 30 mins to find it) but it's not very trivial and rather hard to discover.
Once you are in the paid versions, the upsell push is relentless. But not in the (actual) free edition, at least that was my experience this year.
I'm not giving them any benefits, I am just describing what I have seen. I have no idea why they did that, I'm just saying that was my experience - since not everybody is going to bother clicking through all tax return forms to see what happens at the end.
If you have a startup with lots of users, but can't figure out how to monetize, I think a good plan is to develop an easy to use tax filing service and offer it for free to your users.
Honestly, this seems like what they did. Mint already seems to align with a lot of what CreditKarma does. The tax stuff was just a monetary incentive for Intuit to buy them out.
My take on the article was that the combination of their tax data, the financial data from their prior acquisition of Mint , and with the tax+credit data that will come with this acquisition Intuit would have one of the highest quality financial profiles on most individuals. I am trying to think of any other financial entity that has such data and I am drawing a blank atm.
PS: I never used Credit Karma but had been considering it though I could never get past the 'if it is free, then you are the product'.
Credit Karma was/is pretty open about the way in which you are the product, though: they show you ads for credit cards and loans that you are likely to be approved for, based on your credit information which they already have.
Is this another company that took over $800 million in VC and can't seem to figure out how to make money? And the founders and VCs get a big payout, Intuit gets a big data payout and all the losers that took credit karma at their word are SOL?
Sounds awesome. Pro tip... maybe startups should try starting conventional businesses that actually make money?
This is terrible news for consumers and tax payers in the United States. I was considering filing this year with Credit Karma because it is free. TurboTax can offer a free filing all they like, but 1) it's very limited; 2) last I checked, state filing still cost money; and 3) they inundate you on every other page about paying for some level of filing.
Since the new tax laws went into effect, I've had to pay each year (on the order of thousands more, than what I had to pay during the Obama years). That plus having to pay to file (or having to learn all of the forms and do it myself) is quite the stab in the back for a middle-class consumer like myself.
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[ 3.0 ms ] story [ 72.0 ms ] threadThey are stopping a potentially existential threat to Intuit's TurboTax cash cow.
https://www.creditkarma.com/tax/
I'm not seeing how this is much of an argument for them to buy CreditKarma.
The argument for them to buy it is they then get:
- access to all of that credit report information
- access to the savings account customers
- the linked car and driver information
- more free tax customers to try and upsell audit protection and to try and push returns on their debit card to
- mortgage and other loan shopping data from everyone that's used the mortgage comparison
- potentially as much as 13 years of weekly credit data on given individuals
etc.
Just this year they were ordered to make that products slightly easier to find, but they can still do most of their tricks to direct people away from it.
Credit Karma is an existential threat because it makes free filing easy to find.
I suspect after this deal completes, the CK free file product will start having all the same dark patterns and TurboTax's free product.
And Googling "turbotax free" brings the page right up as the top ad return and as the first search result.
This is exactly the problem. They're not nearly 100% free. It's only free if you manage to navigate their byzantine, dark-pattern-ridden series of questions that effectively ask "Do you want to use the results of the last 12 pages you entered and try to save with TurboTax Deluxe or delete that half hour of work?" and confusingly named products like "Guaranteed Free", "Free Edition", "Start for Free" (all not actually free).
TurboTax makes more than a billion dollars every year. Of course they'll want to squash competitors who threaten to harm that cash cow.
Once you are in the paid versions, the upsell push is relentless. But not in the (actual) free edition, at least that was my experience this year.
figures.
PS: I never used Credit Karma but had been considering it though I could never get past the 'if it is free, then you are the product'.
Sounds awesome. Pro tip... maybe startups should try starting conventional businesses that actually make money?
Whether the money is coming from customers or from a larger company buying them out, the CEO of CK walks away with a ton of cash.
It is going to stagnate just like Mint. :(
Since the new tax laws went into effect, I've had to pay each year (on the order of thousands more, than what I had to pay during the Obama years). That plus having to pay to file (or having to learn all of the forms and do it myself) is quite the stab in the back for a middle-class consumer like myself.