This New Service Aims to Make Tax Season Less Stressful for Freelancers
April 15 is tax day (well, in 2016 the filing deadline is technically April 18)—a fact that freelancers need not be reminded of. Filing taxes is not a particularly fun experience for anyone, but for those who work as independent contractors, things can get especially complicated. According to FastCoExist, a new service has launched to help 1099 filers prepare for tax season by automating their withholdings.
New research [PDF] found that the percentage of workers in the United States who freelance or engage in other forms of "alternative work arrangements" has gone up 5 percent since 2005, and the number of people who work for "online intermediaries" like Uber and TaskRabbit accounted for .5 percent of the total workforce last year. This means a lot more 1099 forms—and frustration. The latter of which is what Painless1099 aims to eliminate.
Painless1099 is an "FDIC insured, smart withholding account" that automatically deducts the amount of taxes you will owe (based on your tax bracket) from your paycheck. The rest of the money is then sent to your normal checking account for you to spend as you like.
By keeping track of how much you earn and separating your spendable income from your non-spendable income, Painless1099 forces users to save. "The American workforce is terrible at putting aside 15 to 20 percent of their money and not pinching into it for various reasons," Painless1099 CEO and cofounder ACe Callwood told FastCo. "This is about getting money out of your face before you see it and want to spend it."
Currently in its beta phase, interested workers can still learn more about and sign up for Painless1099 today. Down the line, the founders hope to add services to help freelancers manage retirement accounts and insurance.
Screenshots via Painless1099