How Much Does a Startup Tax Return Cost?

What factors affect the cost of your tax return?

No matter how small your startup is, you have to file a tax return. It’s not optional, even if your company isn’t generating revenue yet. Outsourcing your tax return preparation is a good idea. That lets you focus on running your business while a tax professional gets your taxes ready. You can use our tax calculator to get an idea of how much this service will cost your startup. Some of the things that affect your pricing include:

  • Complex business structures. The complexity of your startup’s business structure, such as multiple entities, partnerships, or a combination of business types, can increase the complexity and time required for tax preparation.
  • Multistate operations. Startups that operate in multiple states can face additional complexities due to varying state tax regulations and filing requirements. Startups need to break down any revenue by state to comply with state tax law.
  • High transaction volume. Startups with a high volume of transactions, whether in sales, expenses, or financial activities, may require more time and effort to accurately record and categorize each transaction for tax purposes.
  • International operations. Startups engaged in international business activities may face additional complexities related to foreign tax laws, currency conversions, and cross-border transactions, increasing the overall cost of tax preparation.
  • Diverse revenue streams. Companies with diverse revenue streams, such as income from various sources or product lines, may require more detailed accounting and documentation for accurate tax reporting.
  • Inadequate record keeping. Poor record-keeping practices will increase the time and effort required for tax preparation. Keeping your financial records organized can streamline the process and reduce costs.
  • Employees in other states. If your startup has remote employees, it will make your taxes more complex, since different states have specific compliance requirements.

 

It’s important for startups to be aware of these factors. Taking the time during the year to work proactively on your taxes to maintain accurate records will help manage the costs associated with tax return preparation.

What information will your accounting firm need to file your startup taxes?

Preparing a startup tax return requires a lot of information. Making sure that these items are organized, accurate, and provided in a timely manner helps us prepare an accurate tax return for your startup. It’s a good idea to maintain good record-keeping practices throughout the year to streamline your tax filing process. A startup tax return will generally require the following items:

  • Business Information:
    • Legal business name and any trade names used
    • Business address and contact information
    • Employer Identification Number (EIN) or Tax Identification Number (TIN)
  • Financial Statements:
  • Income Documents:
    • Revenue and sales records
    • Invoices and receipts
    • 1099s received from clients or customers
    • Interest and dividend income statements (if any)
  • Expense Documents:
    • Receipts for business expenses (e.g., rent, utilities, supplies)
    • Purchase invoices and receipts
    • Payroll records, including wages, taxes, and benefits
    • Business-related travel and entertainment expenses
  • Bank Statements:
  • Asset Information:
    • Details of business assets (e.g., property, equipment, vehicles)
    • Depreciation schedules for assets
  • Liabilities Information:
    • Details of outstanding loans or lines of credit
    • Documentation of any business-related debts
  • Tax Forms and Filings:
    • Previous year’s tax return (if applicable)
    • Any tax notices or correspondence from tax authorities
  • Employee Information:
    • Employee names and Social Security Numbers (SSNs)
    • Payroll tax filings and reports
    • Benefits provided to employees
  • Inventory Records:
    • Details of beginning and ending inventory (if applicable)
    • Cost of goods sold (COGS) calculations
  • Business Structure Information:
    • Information about the legal structure of the business (e.g., sole proprietorship, LLC, corporation)
    • Changes in ownership or structure during the tax year
  • Special Transactions or Events:
    • Information on any major business transactions or events (e.g., acquisitions, sales of assets)
  • Tax Deductions and Credits Information:
  • Financial Software Access:
  • Record of Estimated Tax Payments:
    • Documentation of any estimated tax payments made during the year
  • Legal and Regulatory Compliance:
    • Documentation of compliance with industry-specific regulations
    • Information on any legal issues or disputes affecting the business
  • Ownership Information


Not all of these items are required for every startup, and some may have to provide different documentation based on the type of business and other factors. We’ll work with you based on your startup’s unique requirements. Contact us for a free consultation.