[pumblechook]

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.

[character]

I think it depends on the primary use case (for accounting vs banking) - I know a lot of people who are earning barely livable wages as 1099 employees and they are often tempted to spend everything they earn (need to make rent and feed themselves) but then come April they haven't saved enough for their taxes and get screwed. Having a separate bank account that withholds the taxes for them first and then deposits 100% spendable money (just like a W-2 employee) would be really helpful for people in this position. If you're coming at the problem with this use case in mind primarily, the approach they took makes sense. I think those people can benefit from this service the most too.

[gk1]

Have you looked at FreshBooks? You can sync expenses with your credit card(s) and bank account(s), categorize them, then view a Profit & Loss report to see your net income (income minus expenses).