How much are the annual bookkeeping, accounting, tax filing expenses for start-ups incorporated in Delaware US (C corp) ?

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Kruze Consulting Startup Q&A Author
Vanessa Kruze
Founder, CPA

Taxes

The taxes that you’ll need to pay depend on your unique situation, so it’s best to contact a professional. I’m a CPA/interim CFO and I work with over 150+ startups. Here’s an example of the myriad of filings and taxes that a VC backed Delaware C-Corp must pay:

  • Jan 31: Send out 1099s sent out to contractors, W2s to employees.
  • Feb 28: DE Franchise tax due (depends on your Balance Sheet and Stock issued/outstanding). Likely $400 if you are seed stage, ~$2000 if Series A.
  • Mar 15: C Corp Tax Return due (but can extend to 9/15 for Fed, varies for state).
  • SF / LA / NYC / Chicago: each of these cities and states have their own set of franchise, gross receipts, and payroll taxes. Contact me for the full breakdown (too expansive for here).

Bookkeeping

A reasonable monthly time budget for bookkeeping depends on:

  1. The volume of your transactions: do you have 300 transactions hitting your bank account and credit cards every month, or 10,000 transactions? More transactions = more time = more money.

  2. The complexity of your transactions: even if you have relatively few transactions, they may be complex. For example, you may have prepaid Facebook $100,000 for advertising for the next year. You or your bookkeeper will then need to reconcile that account every month against what advertising amount you’ve actually used.

  3. Doing the work yourself: if you can train yourself to do some of the bookkeeping, you can definitely save money. Two caveats though, 1) your time is truly better spent growing and managing your startup and 2) if you get it wrong it will very likely be expensive to clean up the books.

  4. How you’ve leveraged technology: I can’t stress this enough… using technology will greatly reduce the amount of time (aka money) you have to spend on Accounting and HR. Here are my absolute essentials: QuickBooks, Zenpayroll, Zenefits, Expensify or Abacus, Bill.com, DropBox or Box, Gmail.

In sum, how much time you spend on bookkeeping depends on your unique situation. But just to give you an idea… If you are a Seed Stage DE CCorp startup based in SF, LA, NYC, or Chicago, have 10 FTEs, ~400 transactions a month and very few accruals… I’d say ~$750 per month.

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