This might sound odd coming from an art school graduate but in recent years, I’ve developed a slight obsession with the tax domain. We live in a time in which everyone talks about financial wellness, but taxes are rarely part of this conversation, or the focus of potential solutions. Think about it, almost every financial decision has a tax implication, and every individual and business has some tax liabilities.
As part of Team8 Fintech’s company-ideation process, we’re constantly exploring new verticals that are ripe for inclusion within the broader embedded finance landscape. We also care a lot about improving financial wellness for the masses, and when we saw that 56% of Americans view taxes as a major source of anxiety, we spotted a “perfect storm” opportunity. There are plenty of fintech companies working to strengthen financial literacy, reduce economic stress and provide everyday users with a simplified, more holistic approach to finance, but few are pursuing these goals from a taxpayer’s perspective. And even fewer are thinking about how readily available data from third party financial applications can now be leveraged to create embedded tax services that dramatically improve the quality of life for taxpayers. Indeed, approaching taxes through an embedded finance lens presents a fantastic opportunity to drive financial wellness – this is what inspired the creation of April.
The need for fintech-led ‘tax reform’
If we zoom out a bit, it’s easy to see how taxes have become such a cumbersome, unpleasant experience for American taxpayers. Going back two or three generations, financial life was much simpler. Your parents or grandparents probably had a single bank account, one employer and one brokerage account (if they’re lucky enough to have saved) for the majority of their adult life.
For younger generations today, things are much more complex. The average length of time spent at a job is 2-3 years, and nearly a third of US workers now participate in the gig economy. Millennials and zoomers have an endless supply of mobile-friendly fintech solutions readily available at their fingertips, and they use multiple credit cards, banking apps, digital wallets and crypto exchanges on a daily basis. These fintech services provide lots of value in a siloed environment but when tax season rolls around and you’re forced to gather data from dozens of accounts – or comply with tax laws across different jurisdictions – that’s when things get out of control.
In the US, where the tax code takes 70,000 pages to explain and is beyond complicated, most Americans prefer to outsource the job to a CPA – a profession that is on the decline – but 40% prefer the do-it-yourself track. Due to a limited range of DIY options available to them, these gluttons for punishment use clunky software that’s full of confusing questions, errors and hidden paywalls. Their user experience is the antithesis of financial wellness. Fortunately however, advances in data science are paving the path to solutions that can alleviate some of the pain. April, for example, is using natural language processing (large language models to be specific) to power its tax engine, and is leveraging machine learning to create a predictive tax-as-a-service solution – one that can easily be integrated into third party platforms to enhance their value chain and make taxes, well, less taxing for their customers. April also employs deep domain knowledge to translate the tax code into plain language that taxpayers can actually understand.
Creating a win-win situation for taxpayers and financial institutions
April was created to facilitate a stress-free tax experience for American taxpayers – to magically make the tax code easy to digest, to reduce friction around tax prep, and dare I say, to make tax filing more rewarding and enjoyable. But it also does a lot more than that.
For tax filers, April provides a fast, easy and frictionless tax filing experience, so you won’t need to rely on cumbersome tax software anymore. It seamlessly collects data from all of your relevant apps, and ensures that your taxes get filed accurately and on time. It also helps you keep more of your hard-earned money through tax optimizations that guarantee a maximum refund. April recognizes that taxes are a living asset or liability on your personal balance sheet – not something that should only be considered in hindsight. With a personalized, adaptive interface that speaks to you in language you can understand, April helps you make smarter financial decisions all year round.
For financial institutions looking to tap into a $300 billion tax refund market, April is the perfect partner. By embedding its tax logic into your platform and providing tax-as-a-service for your clients, you’re able to offer new financial products and services while helping your members save time and money. You’ll also increase life-time value, boost retention and keep more clients engaged in your ecosystem. April’s plug-and-play API enables developers to seamlessly offer complementary tax-related services to users, without having to build or maintain infrastructure for a regulatory-compliant tax engine, or worry about future changes to the tax code.
A new tax paradigm for the future
Over the past year, April’s founders have been validating its ideas and assumptions with dozens of experts in the tax domain. It’s also been methodically working in stealth mode to develop a powerful new tax engine that can be embedded into any 3rd party platform. Their solution is built for the digital era and optimized for the younger demographic that I mentioned above.
April is the tech disruption the tax sector has been waiting for. It represents a new category in embedded finance that finally makes it possible for any financial company to offer a user-friendly suite of tax services. Most importantly, in today’s increasingly complex and interconnected financial landscape, April prioritizes the interests of taxpayers first and foremost. At Team8, we’re thrilled to be supporting a company that’s pioneering tax-as-a-service and bringing real ‘tax relief’ to millions of Americans – right on time for the 2022 tax season!
To learn more about April, visit www.getapril.com