I've been through this exact scenario twice now - once where I said no, and once where I agreed with conditions. Both experiences taught me valuable lessons. The first time (about 4 years ago), I declined because it felt too invasive and my accountant couldn't give me a clear reason for the change. That relationship actually ended up souring because she seemed frustrated with the extra manual work. In hindsight, that was probably a red flag about her communication style more than anything else. Last year with my new CPA, the same request came up but the conversation was completely different. She walked me through her new software, explained exactly how the read-only access worked, and even offered to start with just my business checking account for 30 days as a trial run. The transparency made all the difference. What I learned is that the request itself isn't the issue - it's how the professional handles your concerns and respects your boundaries. A good CPA will take time to explain the benefits, address your security questions, and work within whatever comfort level you set. If they're pushy or dismissive of your concerns, that tells you something important about how they'll handle other aspects of your financial relationship. The automated categorization did end up catching about $800 in deductions I had missed, so there are real benefits when done right. But never let efficiency pressure you into something that doesn't feel right.

This thread has been an absolute goldmine of practical advice! I'm facing the exact same situation with my tax preparer and was honestly pretty anxious about it until I read through everyone's experiences here. What strikes me most is how the quality of the CPA's communication seems to be the biggest indicator of whether this is a legitimate, beneficial request or something to be wary of. The contrast @4a8e8e343f71 shared between their two different CPAs really drives this point home - it's not just about the access itself, but how they handle your questions and concerns. I'm particularly drawn to the trial approach that several people mentioned - starting with one account for 30-60 days with automatic expiration. That seems like a perfect way to test both the technology and the professional relationship without overcommitting. The fact that multiple people found significant deductions they would have missed ($800 in @4a8e8e343f71's case) is compelling, but I really appreciate how everyone emphasized that the financial benefits should never override your comfort level. One question I haven't seen addressed directly - for those who decided against giving access and stuck with manual statements, did you find any good strategies for making sure you don't miss potential deductions? I'm curious about alternatives that might capture some of the benefits without the access concerns. Thanks to everyone for such a thorough, balanced discussion. This is exactly the kind of real-world guidance that's impossible to find in generic advice articles!

I went through this exact same process about 8 months ago for my SaaS business, and after consulting with both a tax professional and doing extensive research, I can confirm that "Service" is absolutely the correct classification. The way I think about it is this: your customers are essentially renting access to your software platform. They're paying for your ongoing service of hosting, maintaining, securing, and updating the software. They never actually own the code or have the right to resell it - they're purchasing access to your service infrastructure. This is fundamentally different from traditional software sales where customers buy a license and own a copy of the software. With SaaS, if they stop paying, they lose access entirely because what they're paying for is the ongoing service, not ownership of anything tangible. One thing that really helped clarify this for me was looking at my revenue streams - subscription fees for platform access, implementation services, customer support - all of these are clearly service-based activities rather than product sales. The IRS classification aligns perfectly with how SaaS businesses actually operate and generate revenue.

I had this exact same dilemma when setting up my SaaS business for project management software earlier this year! After reading through IRS guidelines and consulting with my accountant, I went with "Service" and it was definitely the right call. The deciding factor for me was realizing that our customers aren't buying software - they're buying access to our hosted platform along with ongoing maintenance, updates, security, and support. We retain full ownership of the code and infrastructure while providing the service of making it available to them. What really sealed it was thinking about what happens when a customer stops paying: they immediately lose access because they were never purchasing ownership of anything. They were paying for the ongoing service of platform access, which is fundamentally different from buying a software product they would own. One practical tip that helped me during the application process: when describing your business activities on the EIN form, use language that emphasizes the service aspects. I wrote something like "providing cloud-based software platform services" rather than anything that could be interpreted as selling software products. This keeps everything consistent with your "Service" category selection.

One strategy I don't see mentioned is differentiating between the PSL and the actual tickets. My CPA structured my ticket business so that I personally own the PSLs as an investment asset (since they can appreciate over time), while my LLC "rents" the right to purchase the annual tickets from me. This way, the LLC can deduct the full cost of the annual tickets plus a reasonable "rental fee" for using my PSLs, and I report that rental income personally. This creates some nice tax flexibility depending on my overall situation each year. When/if I eventually sell the PSLs, I'll be taxed at capital gains rates rather than ordinary income. My CPA said this approach works best when the PSLs have significant value like yours do at $80k.

This is exactly the kind of situation where proper planning upfront can save you thousands in taxes and headaches later. One thing I'd add to the excellent advice already given is to consider the timing of when you set up your LLC and start treating this as a business. If you retroactively try to claim business deductions for years when you were just casually selling tickets, that could raise red flags. But going forward, if you formalize the structure and start operating in a businesslike manner, you'll be in much better shape. Also, don't overlook the potential for other revenue streams once you have the LLC set up. Some of my clients have expanded into buying/selling other events' tickets, partnering with other season ticket holders, or even offering ticket management services. The infrastructure you set up for your football tickets can often support additional activities. Just make sure whatever you do, you're genuinely operating with profit motive and keeping detailed records. The IRS hobby loss rules are no joke, especially with high-dollar activities like this.

My accountant told me most software engineers aren't SSTBs unless your primarily doing consulting. He said to track hours for each type of work. Anybody using Quickbooks for this? How do you categorize your services?

I've been dealing with this exact issue for the past two years with my software engineering business. What really helped me was creating a simple tracking system where I log my activities daily - either "Development" (coding, testing, implementation) or "Consulting" (meetings, architecture discussions, recommendations without implementation). The IRS looks at the substance of what you're actually doing, not just your job title. If you're spending most of your time writing code and building solutions, you're likely in the clear for QBI. But if you're mostly in meetings giving advice without actually creating the software yourself, that could be problematic. One thing that caught me off guard - even project management and client communication can blur the lines. I now make sure my contracts explicitly state that I'm being hired to "develop and implement software solutions" rather than just "provide software consulting services." The language matters more than you'd think. Have you considered restructuring how you bill clients? Breaking out development work separately from any advisory work could help establish a clear pattern that most of your business is non-SSTB.

Wait my bank sent me a 1099-INT for like $23 of interest for 2023... am i supposed to file a return just for that??? I had a w2 job too but only made like 8k so I didnt think I needed to file anything???

I'm glad you're being proactive about this! As others have mentioned, you're definitely under the filing threshold with just $135 in interest income, so you won't face any penalties from the IRS. One thing to consider though - even if you don't file for 2023, make sure you keep that 1099-INT document for your records. Sometimes the IRS receives copies of these forms and might send you a notice years later asking about unreported income. Having the documentation showing your total income was well below the filing threshold will help resolve any questions quickly. Also, since you mentioned you're still looking for work, you might want to file anyway if you think you'll have more complex tax situations in future years. Getting familiar with the process when stakes are low (like your current situation) can be helpful when you do have more substantial income to report. The good news is you have until April 2027 to decide whether to file a 2023 return, so no rush to figure it out immediately!