Question 1

What taxes does my startup owe?

Accepted Answer

Depends on entity type. C-corps pay corporate income tax. LLCs/S-corps pass through to owners. Plus payroll taxes, state taxes, potentially sales tax.

Question 2

What is R&D tax credit and can I get it?

Accepted Answer

Federal credit for qualified research activities. Many startups qualify—software development often counts. Can offset payroll taxes even without profit. Talk to a CPA.

Question 3

What is state nexus?

Accepted Answer

Physical or economic presence triggering tax obligations. Remote employees can create nexus. Selling to customers in a state can too. It's getting more complex.

Question 4

When do I need a tax professional?

Accepted Answer

Immediately, honestly. At minimum for entity setup, first year filing, and when you have employees or equity. DIY is risky for companies.

Question 5

What about sales tax for SaaS?

Accepted Answer

Many states now tax SaaS. Threshold varies. Track where customers are. Use tools like TaxJar or Avalara, or Merchant of Record to handle.

Question 6

How do stock options affect taxes?

Accepted Answer

ISOs vs NSOs have different tax treatment. 83(b) elections matter. Employees and company both have implications. Get equity compensation advice.

Question 7

What's an 83(b) election?

Accepted Answer

IRS form to pay tax on stock at grant rather than vesting. Beneficial if value increases. Must file within 30 days. Missed deadline = missed opportunity.

Question 8

How do I handle payroll taxes?

Accepted Answer

Payroll providers (Gusto, Deel) handle this. Withhold from employees, pay employer portion. File quarterly. Don't mess with payroll taxes—IRS is serious.

Question 9

What about international tax obligations?

Accepted Answer

Complex. Where you're incorporated, where employees are, where customers are. Get international tax advice if operating globally.

Question 10

Should my startup be a C-corp or LLC?

Accepted Answer

VC-backed = C-corp usually required. Bootstrap = LLC or S-corp for tax flexibility. Discuss with attorney and CPA based on your plans.

Question 11

What records do I need to keep?

Accepted Answer

All receipts, bank statements, invoices, payroll records, contracts. Digital is fine. Keep 7 years minimum. Good bookkeeping makes everything easier.

Question 12

How do I estimate quarterly taxes?

Accepted Answer

Project annual income, calculate tax, divide by four. Pay by deadlines (April 15, June 15, Sept 15, Jan 15). Underpayment penalties are annoying.

Question 13

What if I operated at a loss?

Accepted Answer

Losses can carry forward to offset future profits. Keep good records. Common for startups. Still file returns.

Question 14

How do I find a good startup CPA?

Accepted Answer

Ask other founders for referrals. Look for startup experience specifically. Big firms often overkill early. Specialists understand your context.

Question 15

What tax mistakes do startups commonly make?

Accepted Answer

Missing payroll tax deadlines, ignoring state nexus, not capturing R&D credits, poor equity documentation, mixing personal/business. All avoidable with good advice.

I need to handle startup tax compliance properly

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Deel

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