Show HN: Painless1099 – automated self-employment taxes

FWIW, the second account WOULD be out of sight out of mind. you would just deposit into it, and then money would flow from it into your actual bank account via the service. Obviously, if you can get direct deposit, it works a lot better and you don't need such a setup.

But the very nature of 1099 means you could be working with a variety of clients, and are more likely to receive payment via check or other one-time method, versus direct deposit which is more common for W2 employees. I can't tell you how many one-off gigs i've had, or on/off where they just want to send me a check and thats the last i hear from them for months or ever; i'd get laughed at if i asked for direct deposit. (and did by a long term client: they like writing out checks)

If you want to actually solve this for 1099ers, your going to have to do more than just what works for a subset of users; and supporting checks absolutely needs to be on your roadmap at some point, at minimum. Otherwise... I don't think you really have any sympathy or understanding of the very field that you're trying to solve a problem for.

Man, if this would've been around a year or so ago! The whole 1099 process was by far the biggest pain point for me of being a contractor/sole proprietor.

What led you to address this problem from the banking, rather than accounting, side? For me, the banking part wasn't a big source of friction. It was keeping up with income and expenses, trying to determine what I could safely deduct, and coming up with a reasonable estimated quarterly tax bill (especially for my state taxes, which I could only send in yearly). After that was done, moving the money around was relatively trivial. Even if your product removes all that friction, I would still think that requiring users to open up another bank account and essentially give you control over all their revenue would be a huge hurdle to overcome.

Also, were I still a contractor, not being able to track expenses as well would be a deal breaker for me, especially in months where cash flow was tight. Yes, doing my taxes is a hassle, but compared with the hundreds or thousands I might save on a quarterly tax bill with expenses accounted for, it is a minor annoyance.

This is something I manage pretty easily without a lot of fuss using a spreadsheet and one bank account with my 1099 business. I do a small volume of transactions with higher dollar values, so this might appeal more to high-volume businesses where the manual effort increases a lot.

I would be more interested in hooking in to the paying and calculating quarterly estimated tax payments.

Will this system do sales tax saving/payments? I pay those quarterly to my state just like the IRS estimated income payments and treat them essentially the same from a management standpoint. Any third-party system would need to be flexible to handle that, as well.

Actually it comes out to $60/yr, which isn't bad for just splitting off funds between two accounts. Obviously they could charge more - $10/mo wouldn't be bad either, still worth it there, which is $120/yr.

But it's not worth $100/mo, or 2% of my gross income, for example. I didn't make so much as a freelancer that i could tolerate either of those financially. And It doesn't remove the need for a CPA, just helps with the ability to pay that taxes you owe.

Not about risk, it's about people putting their hands in my pockets. I can only tolerate so much. I'll pay to solve the problem and make sure they can continue to do so for me, but if it becomes a matter of opportunistic behavior on the company's part, I'll go elsewhere or nowhere instead of being taken advantage of.

There's a lot of value in being able to hone in on the exact figure -- 31.8% based on your previous year's income and deductions -- giving you an extra 9.2% if you were conservative and putting aside 40%. I don't know if that's what this service can actually offer, just putting out there that it's more complicated than just setting aside a gross estimate like that.