What taxes does my startup owe?

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.

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

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

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.

When do I need a tax professional?

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

What about sales tax for SaaS?

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

How do stock options affect taxes?

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

What's an 83(b) election?

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.

How do I handle payroll taxes?

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

What about international tax obligations?

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

Should my startup be a C-corp or LLC?

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

What records do I need to keep?

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

How do I estimate quarterly taxes?

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

What if I operated at a loss?

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

How do I find a good startup CPA?

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

What tax mistakes do startups commonly make?

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

Back to all problems

Solution illustration for I need to handle startup tax compliance properly

Critical Priority

Best Tax Compliance Tools for Startup Founders

Stay compliant and keep more money

4-8 hours

Founder, Finance, Legal

About This Problem

Startup taxes are complicated—entity type, state nexus, R&D credits, equity compensation. Mistakes are expensive. Get the basics right from the start.

You might have this problem if:

✓No idea what taxes the company owes
✓Mixing up personal and business tax obligations
✓Missing out on R&D tax credits
✓Confused about state tax nexus
✓Equity grants creating tax surprises for employees

Success Looks Like

All quarterly estimated taxes filed on time
R&D tax credits captured
Clean books for annual filing

Relevant For

pre-launch stagelaunch stagegrowth stagescale stage

Startup tax compliance tools help you handle sales tax, income tax, R&D credits, and multi-state obligations without spending all your time on paperwork. Tax mistakes can result in penalties that eat into your runway, and most founders are not tax experts. These tools automate calculations, filings, and compliance tracking so you stay on the right side of the IRS.