The Next Big Thing? - Deductr
Tax season is fast approaching, and there is a new tool available to help you keep in good standing with the tax man.
Deductr is a web-based service and mobile app designed to assist independent businesses in tracking their corporate activities, including income, expenses, mileage and time. John Thomas, CEO of the Orem, Utah-based Deductr, stopped by to explain how this works.
Q: What was the inspiration for Deductr?
John Thomas: In January of 2009, two friends and colleagues, Matson Magleby and Ken Fox, had an idea that just wouldn’t go away. The entrepreneurial friends, who had each started several small businesses of their own, knew they hated one aspect of small business more than any other: the monotonous, easy-to-procrastinate, stuff-it-in-a-shoebox-until-later hassle of tracking your business deductions — all those expenses you incur and miles you drive for the business.
In talking with other home-based and small business owners they found all had the same aversion. What’s more, they learned that many people running their own business never track their business deductions at all, either because they don’t know what they can deduct (or that they’re even eligible for deductions), or out of fear of the IRS. These two friends started thinking they could build a tool that would simplify this loathsome, yet necessary business practice so much, that it would actually become pleasurable to track one’s business expenses and mileage.
To turn this idea into an actual tool they knew they’d need help. They brought on two partners, William Olsen and Morgan Magleby, Matson’s brother. The four worked feverishly to build on this shared vision, culminating in the creation of Deductr. William is a licensed CPA with 20 years tax experience, including IRS problems resolution. Morgan, an entrepreneur and small business owner, had a strong marketing and design talent that was important in the user experience and interface of Deductr.
The four were convinced there was a gap or need in the business tracking tools market place. While QuickBooks has the market share in small business accounting software, most small business owners find it too complicated and difficult to learn. When designing Deductr, the founders insisted on building something even their elderly, computer-challenged parents would be able to learn and use. They talked daily about the need to “crack the code” when it comes to simplifying the tracking process through a tool that people wouldn’t procrastinate using.
One of the main features of Deductr is the Tax Savings Estimator, which shows a user the real-time tax savings on a monthly basis for the expenses and mileage they track. Before this, most people would have to wait until tax time to really get a sense of what they owe in taxes or could expect as a refund. The founders were confident that when people saw their tax savings grow each day, right before their eyes, it would be the positive reinforcement they need to make tracking a rewarding habit.
Q: How long did it take to create and launch Deductr?
John Thomas: Deductr began in January of 2009, and after six months of intense development the first iteration of the product was ready for testing. Major revisions were made as a result of the extensive beta testing that was performed over the next 9 months. Initial patents were filed during this time (multiple revisions, additional claims and amendments were subsequently filed). Deductr was released to the public in March of 2010.
On January 23, 2014, Deductr launched a significant update to their software, labeled as 2.0. The added features and user enhancements build upon the original vision of helping small business owners keep more of the money they make at tax time. The result has been the fulfillment of that initial vision – a tool that is easy to use and would allows users to see their actual tax savings.
Q: What are the advantages for small businesses that use Deductr?
John Thomas: Deductr helps small business owners succeed by simplifying the process of tracking business expenses and capturing every possible deduction. Automation of the processes, mobile functionality and features that are as natural for virtually anyone to employ make Deductr the tool of choice. In the end, small business owners save time and money – literally putting tax savings dollars back in their pocket.
Owning a small business comes with certain inherent tax advantages. To maximize these tax advantages there are certain things every small business owner must do. Tracking every business expense, mile, and minute for business, in addition to having proper documentation to back up these claims is crucial to ensure that small business owners keep more of what they earn.
Deductr helps small business owners maximize their tax deductions without the headaches associated with complex record keeping, traditional spreadsheets, or the old shoebox of receipts. Tracking expenses is easy using any web browser or smart phone. Capturing mileage is a snap using Deductr’s mobile app that utilizes the GPS in today’s smart phones. Recording time and activity has never been easier with the new “drag and drop” calendar. Small business owners can look at a single calendar view and then drag expenses and mileage onto events to confirm and combine them into a single occurrence.
And finally, as small business owners use Deductr they receive real-time personalized feedback regarding the important financial metrics of their business and especially their tax savings! They see instant results by way of an estimated monthly tax savings graph each time they use Deductr.
Q: How does Deductr keep track of changes in the federal and state systems?
John Thomas: Our team of accountants, licensed CPAs and tax experts keep up on the latest changes to the laws via sources such as official IRS Newswire and updates subscriptions, Quickfinder, and CPA Continuing Professional Education (CPE). Because of Deductr’s “cloud” based architecture, tax code changes are implemented immediately and released to the public with no need for the user to worry with downloads or updates.