Hurdlr's Automatic Business Expense & Deduction Finder

Hurdlr for Square Sellers automatically tracks their business expenses and self-employed taxes so they can keep selling. Our Deduction Finder scans their expense accounts for valuable tax deductions.

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Inspiration

Thank you for the opportunity and your consideration. My brother and I founded Hurdlr to help people earn more money with their micro to small businesses, freelancing, and side gigs. We automate their business expense tracking, self-employed tax estimates and financial reporting so they can focus on doing what they love.

Meet Hurdlr, your number-crunching, paper-pushing, mobile accounting machine. Our Hurdlr app icon was designed to personify a machine that helps people easily overcome the obstacles that all of these complex and administrative “hurdles” present. Similar to how Square simplifies payments (or getting paid), Hurdlr simplifies expenses and taxes -- it’s the perfect complement to Square.

With the growth of the “1099 Economy”, the Future of Work movement, and people transitioning to independent work, we wanted to automate these business and accounting roadblocks (or hurdles) to business success, so people could more easily thrive without having to become experts in self-employed business accounting and taxes. Finances, accounting and taxes for these people -- many of whom are our friends and family -- should be as easy as grabbing a Lyft or Uber.

After helping hundreds of thousands of people track $8B in finances and save $300M in taxes, we thought we had enough data that we could leverage to help people automatically find expense deductions they were overlooking or not taking advantage of, in order to reduce their taxable income and increase their take home pay.

What it does

Square Sellers self-identify into a business type, as do Hurdlr users. For this hackathon, we added a feature that goes through all of a Square Sellers expenses (via a linked credit card) and surfaces up the “likely” and “not likely” tax deductions.

How we built it

We built this by creating an algorithm that weights CPA-vetted best practices, for each Square Seller business type, against user behavior (in aggregate) for the comparable Hurdlr users’ business type. We combined that with our existing Machine Learning that learns/predicts user behavior, so that Square Sellers can capture the bulk of their tax deductions without having to manually classify each of their expenses. We have been tightly integrated with the Square API for some time now, but it was fun modifying our algorithms to provide this major win specifically for Square Sellers, as a part of this hackathon.

Challenges we ran into

The main challenge in building the Deduction Finder was the portion of the algorithm that weights similar-user behavior as one of the inputs. Specifically, we cannot assume that users behave in a tax compliant manner. For example, many self-employed individuals incorrectly mark their normal meals as business expenses. So we had to build in a mechanism that allows our CPA-vetted “best practices” to override erroneous user behavior.

Accomplishments that we're proud of

Square Sellers are sellers, not accountants or tax experts, and our new Deduction Finder feature for Square Sellers allows them to focus on selling and growing their revenue even more, while still getting the bulk of the benefit of being a tax expert. This feature furthers our mission to help solopreneurs and micro-business owners be more profitable. As a developer, I am proud that we were able to leverage external data (i.e. Square’s) to provide insights based on our data. The combination is very powerful.

What we learned

Our product is solving the Sellers’ painpoints that Square doesn’t resolve yet. After years of running our product in production, with over 500k registered users, we have taken our user’s feedback and honed the expense/mileage/tax portion of the micro-business owner’s financial puzzle. That includes building automation and user-customizable rules, so that users don’t need to constantly classify items or have tax-specific domain knowledge. I’ve learned that Square Sellers value these features as a complement to Square, and that it is not much work for Square Sellers to leverage what we have built, due to the streamlined integration that we’ve built here.

What's next for Hurdlr's Automatic Business Expense & Deduction Finder

We’ve added this to our API, so platforms like Square can leverage our proven tech and help their Sellers automate their expenses and taxes, within their own product.

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