Bookkeeping
Affordable bookkeeping: what cheap plans cover and where they cut corners
What low-cost bookkeeping should include, what usually sits outside it (payroll, tax returns, 1099s), and the IRS rules and penalties that cost more than the savings when they're skipped.
Prepared by Aldro Accounting · Updated · Sources checked
The quick answer
Affordable bookkeeping covers the core work the Bureau of Labor Statistics lists for bookkeepers: recording transactions, assigning debits and credits to accounts, reconciling differences and producing balance sheets and income statements. Payroll and tax returns are separate jobs. The costly gaps are compliance ones: for payments made after December 31, 2025, the IRS requires Form 1099-NEC for $2,000 or more paid to a nonemployee, and a late or missing information return can cost $60 to $340 per return in 2026.
What affordable bookkeeping should include
The BLS describes bookkeepers as workers who compute, classify and record numerical data to keep financial records complete. Whatever the price, that core work is what a bookkeeping plan is for.
- Entering (posting) financial transactions into bookkeeping software
- Receiving and recording cash, checks and vouchers
- Putting costs (debits) and income (credits) into the software, each assigned to an account
- Producing reports such as balance sheets, income statements and totals by account
- Checking figures, postings and reports for accuracy
- Reconciling, or noting and reporting, any differences found in the records
What usually sits outside a cheap plan
The federal job classification for bookkeeping, accounting and auditing clerks excludes payroll and timekeeping clerks. Payroll is classified as its own job.
Tax work belongs to accountants. The BLS lists computing taxes owed, preparing tax returns and making sure taxes are paid properly and on time as accountant duties, along with checking financial statements for legal compliance and looking for fraud risks. Auditing clerks fix small errors themselves but typically refer major discrepancies to accountants and auditors.
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| Occupation | Median per year | Median per hour | Lowest 10% | Highest 10% |
|---|---|---|---|---|
| Bookkeeping, accounting and auditing clerks | $50,670 | $24.36 | Under $36,000 | Over $74,550 |
| Accountants and auditors | $83,680 | $40.23 | Under $56,020 | Over $144,090 |
That split shows in pay. In May 2025 the median for bookkeeping, accounting and auditing clerks was $50,670 a year ($24.36 an hour), with some college and no degree as the typical entry-level education. Accountants and auditors had a median of $83,680 ($40.23 an hour), and the typical entry-level education is a bachelor's degree. All states require 150 semester hours of college coursework for a CPA license.
Corner 1: contractor payments and 1099s
Books that don't track who was paid what make 1099s hard to file. For payments made after December 31, 2025, Form 1099-NEC is required for $2,000 or more paid in the course of business to a nonemployee for services, including attorneys. The threshold was $600 before that. Form 1099-MISC uses the same $2,000 threshold for rents, prizes, awards and other income.
Some 1099 rules have much lower thresholds. Royalties of $10 or more go on Form 1099-MISC, and any backup withholding must be reported regardless of amount.
If a payee doesn't give a taxpayer identification number in the required manner, or the IRS says the number is wrong, the payer must withhold at a flat 24% rate. That is backup withholding.
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| When filed | Due in 2026 | Due in 2027 |
|---|---|---|
| Up to 30 days late | $60 | $60 |
| 31 days late through August 1 | $130 | $130 |
| After August 1 or not filed | $340 | $340 |
| Intentional disregard | $680 | $690 |
A business with 10 or more information returns, Forms W-2 included, must file them electronically. The IRS charges one penalty for a late or incorrect return and a separate one for a late or incorrect payee statement.
Corner 2: the wrong accounting method
The accounting method a bookkeeper uses matters for tax. For tax years beginning in 2026, a corporation or partnership meets the section 448(c) gross receipts test if its average annual gross receipts for the prior 3 tax years don't exceed $32,000,000. That test is what lets many small businesses use the cash method.
Changing an overall method of accounting, or the treatment of any item, is done by filing Form 3115 with the IRS. Books kept one way for years can't simply be switched.
Corner 3: books that aren't ready at tax time
When books close late, returns go out late. For an income tax return required to be filed in 2027 that is more than 60 days late, the minimum failure-to-file penalty is the lesser of $535 or 100 percent of the tax due. For partnership and S corporation returns required to be filed in 2027, the dollar amount used to figure the late-filing penalty is $260.
Software is taking over much of the routine work. The BLS says software innovations have automated many bookkeeping tasks and projects employment of bookkeeping clerks to decline 6 percent from 2025 to 2035.
Aldro bookkeeping is $20 a month, covering unlimited bank and card accounts, monthly reconciliation and statements. Payroll processing and sales-tax filing aren't included.
Worked example
Say a business paid five contractors $2,500 each in 2026 and its low-cost bookkeeper never collected W-9s or flagged the payments. Each payment is over the $2,000 threshold, so five Forms 1099-NEC are due. If they are filed after August 1, the penalty for returns due in 2027 is $340 each: 5 x $340 = $1,700. The IRS charges a separate penalty for not furnishing the payee statements, which can add up to another $1,700.
Common questions
What is the difference between a bookkeeper and an accountant?
A bookkeeper records transactions, assigns debits and credits, reconciles accounts and produces basic statements. An accountant also computes taxes owed, prepares returns and checks statements for legal compliance. The May 2025 BLS medians were $50,670 and $83,680 a year.
Does basic bookkeeping include payroll and tax returns?
Not by definition. The federal bookkeeping clerk classification excludes payroll and timekeeping clerks, and the BLS lists preparing tax returns as an accountant duty.
Can a small business stay on cash-basis books?
For tax years beginning in 2026, a corporation or partnership meets the section 448(c) gross receipts test if its prior 3-year average gross receipts are $32,000,000 or less. Changing methods requires Form 3115.
What happens if my bookkeeper doesn't collect W-9s or track 1099s?
Without a valid taxpayer identification number the payer must withhold 24% backup withholding. Late or missing 1099s are penalized per return, from $60 to $340 for returns due in 2026, with a separate penalty for payee statements.
The cheapest way to get your business taxes done: $399 flat.
Business tax filing is $399 USD a year, and it covers everything tax for that year.
How it works
- Tell us about your business. A two-minute form. No payment is collected through it.
- Get your next steps by email. We’ll email you the next steps within one business day. After you sign up we’ll send you a secure upload link for your documents.
- We file it. Our team prepares and files your return. Add bookkeeping for $20 a month if you want it.
What's included
$399 a year covers everything tax for that tax year.
- Every business return for the year. All the federal and state or provincial business returns you need for the tax year: Schedule C, 1065, 1120-S, 1120 and their state returns in the US; T2, or T1 with T2125, in Canada.
- More than one state. Multi-state returns are included at the same price.
- Your personal return. The owner’s personal return (1040 or T1) is included when it’s needed for the business income.
- Quebec. Quebec returns (CO-17, TP-1 and TP-80) are included. Our Quebec pages are in French, and our team works with you in English.
- Extensions and reminders. Extensions (Form 7004 or 4868) and quarterly estimate reminders are included.
- Information returns. 1099-NEC, T4/T4A and T5018 slips are included in the tax price.
- City and excise returns. City and local business tax returns, and state excise returns such as Washington B&O, are included in the yearly price.
- Franchise tax reports. State franchise tax reports, such as the Texas franchise tax report, are included.
- Estimated tax and instalment amounts. We work out your quarterly estimated tax payments in the US, or your CRA instalments in Canada, and tell you what to pay and when.
- Unfiled past years. Each unfiled prior-year return is $399 per tax year, the same flat price.
- Bookkeeping at $20 a month. Unlimited bank and card accounts, monthly reconciliation and monthly statements.
Basic inventory tracking for online stores, such as Shopify, is included. Full cost-of-goods reconciliation is quoted separately. Payroll processing and sales-tax filing aren’t included in bookkeeping. Prices are in USD. Our team prepares and files your return.
Sources
- BLS: Bookkeeping, accounting and auditing clerks · checked October 31, 2026
- BLS: Occupational employment and wages, 43-3031 (May 2019) · checked October 31, 2026
- BLS: Accountants and auditors · checked October 31, 2026
- IRS: Form 1099-NEC and independent contractors · checked October 31, 2026
- IRS: Topic no. 307, Backup withholding · checked October 31, 2026
- IRS: Information return penalties · checked October 31, 2026
- IRS: Revenue Procedure 2025-32 · checked October 31, 2026
- IRS: About Form 3115 · checked October 31, 2026
This guide explains general rules from the sources listed. It isn’t tax advice for your situation.