New Intuit Software Crunches Numbers For Self-Employed Workers

By Carolyn Said
San Francisco Chronicle.

Freelancers. On-demand workers. Self-employed people. Sole proprietorships. Independent contractors. Contingent workers. On-call workers. Solo entrepreneurs. Home-based workers.

Whatever you call them, people who work for themselves are a huge and growing segment of the workforce. The rise of on-demand services like Uber, Lyft, Taskrabbit, Homejoy, Postmates, Sprig and Etsy is continuing to boost their ranks.

Companies increasingly are awakening to the opportunities of catering to this market with digital products that recognize that their needs are different from those of salaried workers or small-business owners.

Financial-management giant Intuit of Mountain View last year launched a business unit called Self-Employed Solutions to complement its existing consumer products like TurboTax, Mint and Quicken, and its small-business focus with QuickBooks.

The unit’s first product, QuickBooks Online Self-Employed, aims to help freelancers manage their money by tracking expenses and other data they’ll need at tax time. It does not, however, replace tax-preparation software, which still must be purchased separately.

“This economy is exploding right now,” said Alex Chriss, vice president and general manager of Self-Employed Solutions at Intuit. “We want to give confidence to this population so they can feel ownership over their finances.”

While the software — priced at $9.99 a month — targets all self-employed workers, Intuit is particularly emphasizing “on-demand” workers involved in ride-hailing, project-based job platforms and online retail.

Steve King, a partner in Lafayette’s Emergent Research, projects independent workers will be 43 percent of the U.S. workforce by 2020. A separate study by the Freelancers Union and Elance-oDesk says the country currently has 53 million freelancers, accounting for 34 percent of the workforce.

“There’s been a gap in the tools they have,” King said. “A lot work part time, or have multiple jobs or several streams of income. We think Intuit’s product will be a big help to folks so they can do their taxes and understand the key metrics in their business.”

Government data on self-employed workers excludes many people who have “alternative work relationships,” King said, such as temp-agency workers, substitute teachers, on-call nurses and six-month contract workers.

The on-demand economy remains minuscule, at less than 1 percent of the overall U.S. economy, although it gets enormous attention and is on a rapid-fire growth path. He thinks about 400,000 to 500,000 Americans now participate in the sector on a regular basis.

Freelancers have some unique needs, Chriss said. By shadowing some, Intuit found a propensity to co-mingle their business and personal expenses — meaning at tax time, they couldn’t claim all their business deductions. “They would buy printer paper and toilet paper at Target on one receipt, and there was no way to expense that printer paper,” Chriss said.

The solution: a quick way for freelancers to categorize expenses either by clicking in the computer software, or swiping left or right in the smartphone version after linking their credit cards and bank accounts.

“We tried to make it as drop-dead simple as possible,” Chriss said. And, yes, the swiping is reminiscent of the Tinder dating app. “It is pretty sexy to swipe left or right,” he deadpanned.

Another key feature, particularly for new freelancers: The software estimates the self-employment taxes due to the Internal Revenue Service each quarter. “For many, this is the first time they have to figure out how much to set aside for taxes,” Chriss said. “Invariably, they underestimate it.”

Intuit pitched the software as useful for people offering “peer-to-peer” rentals, such as Airbnb hosts. However, it lacks features to meet IRS requirements to record Airbnb revenues as rental income, a different category than self-employment earnings.

Eli Campos of Campbell has worked since last February as a driver for Lyft, Uber and restaurant-delivery service DoorDash while he looks into electrician courses. He used a beta version of Intuit’s software for several months and said he appreciates its ease of use and seamless connection with his financial accounts.

“Rather than having to crunch the numbers yourself, it does all the hard work for you,” he said. He already does his taxes with Intuit’s TurboTax. “The neat thing is it’s very easy to transfer the numbers over,” he said.

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