Startup Taxes

Estimate What Your Startup’s Tax Return Would Cost

Our online tax return cost calculator estimates the cost of tax preparation – try it now for free!

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Kruze Consulting is the perfect Accounting, Finance and Tax partner for Los Angeles Startups. Kruze delivers exceptional monthly reporting and financial projections. When we need help with benefits or payroll, Kruze solves our problems.

Brett O'Brien

CEO

flyrtv.com

As a startup, moving quickly is a top priority for us and we just needed to get our tax return done. After we uploaded our docs, we got our tax return in 3 days! E-filing was confirmed by Day 4. Super responsive and helpful!

Casey McKerchie

VP, Operations

Calm.com

We tried using other CPAs to prep our startup tax return only to find that they weren't startup experts. Kruze knows R&D, SAFE Notes, SaaS, and venture debt and they gave us valuable advice. We have 100% confidence in their work.

Farhad Massoudi

CEO

Tubi TV

Kruze does startup Tax Returns

Our proprietary software lets us offer startups tax returns at affordable prices*

Seed Stage

Small, young startups with no major fundraising

Starting at

$1,500 get started

Series A

Growing startups with major fundraising round

Starting at

$2,000 get started

Series B

Mature startups with at least 2 fundraising rounds

Starting at

$4,000 get started

Series C

Later stage startups with at least 3 rounds

Starting at

$5,000 get started

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Our seamless interface will make it a breeze to get your company's returns complete. Forget about missing deadlines or confusing forms. We've made every step of the process fast and easy. Plus, we will complete your return at lightning speed by a staff of seasoned professionals that live and breath startups.

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Almost $5 Millions in Startup Payroll Tax Savings from R&D Tax Credits

Startups need startup experts – Kruze helps seed and VC funded companies creating novel technology save payroll expenses by taking advantage of R&D Tax Credits. If your startup CPA isn't talking to you about R&D Tax Credits, then you may be missing out in up to $250,000 in payroll tax savings next year! *

Find Out if R&D Tax Credits Work For Your Startup

Startup Taxes Key Terms

California Franchise Tax

Any business or startup that is doing business in California will get hit with the California Franchise Tax. So if you have employees, an office in California, or revenue in California, then you likely own this fee. When is the California Franchise Tax due? April 15th. And don’t expect any helpful postcards or notifications from the state of California! How much do is the California Franchise Tax for startups? If you are an early stage company operating at a loss, then it’s likely that the California Franchise Tax will only be about $800. There are a few variables that could make this a little higher, but for most startups (unprofitable companies, that is), you’ll pay $800. If you are profitable, make sure you do work with your CPA to calculate this fee correctly.

Delaware Franchise Tax

All Delaware incorporated companies have to pay an annual Delaware Franchise Tax - including startups. This expense has nothing to do with profitability, or even revenue - you have to file if you are incorporated in DE. When is the Delaware Franchise Tax due? March 1st. How much is Delaware’s Franchise Tax for startups? If you haven’t raised that much money, maybe half a million in seed financing, then you are likely to owe not more than $1,000. If you’ve raised $10 million in venture capital, then you likely own about $4,000. We help our early stage clients calculate their Delaware Franchise Tax, so if your CPA isn’t helping your startup with this then you should consider getting a CPA who is used to working with funded companies.

Startup Tax Return

How much should a startup expect to pay for a tax return? After analyzing thousands of startup tax returns across many industries, Kruze Consulting developed a calculator to estimate startup tax return costs. You can find it on our website, and we invite you to visit the site and try it out. As a benchmark, a straightforward Series A tech company can expect to spend around $2,000 for their annual return. However, your cost may vary. Startup tax return costs are generally based on four factors, which we cover below. First, are you a seed, Series A, or Series B company? Your stage of fundraising has a direct impact on the return cost. Second, what industry are you in? A marketplace, a SASS, and a Fin-tech company can expect different tax return costs. For example, a Fin-tech or marketplace can be more expensive than just say a plain vanilla SASS or tech company. Third, where do you have payroll? Rent? Sales? The answers to these questions will determine where you have “nexus,” and the concept of a nexus is important because it determines which state or states you will need to file a tax return in. The more states, the more costly. Last, what is your volume and complexity? Do you have a lot of transactions or just a few? Are you complex with several international components or do you have a parent or subsidiary companies? The answers to these questions determine the workload required, and the price will go up a bit as volume and complexity increase.

1099 IRS Forms

1099s are an IRS form due each year by January 31st. Who your startup needs to give this tax form to depends on how much you’ve paid your cash-basis contractors during the previous year, and what type of contractor they are. Specifically, anyone who is not a corporation and was paid over $600 in aggregate will need to get a 1099. So LLCs and sole proprietors (often contractors like marketing contractors, some lawyers, and landlords), paid over $600 during the previous year, will require a 1099. If you are unsure what type of contractor you have been working with, have your startups send them a W-9 to complete. Remember, 1099s are due by January 31st, and your startup must provide one to any non-corporation you paid over $600 in the previous year.

Tax Reporting for ISO and NQSO

In December and January of each year, startups often start to wonder what they should be doing with all of those employees and contractors to which they’ve given incentive stock options and non-qualified stock options (“ISO” and “NQSO”). There is a very important deadline for companies that have granted ISO’s or NQSO’s. The ISO and NQSO forms are due by January 31. Businesses only have a short window after the end of the previous year to make sure that you have the form for your employees and your contractors who have received this type of stock incentive. Then, you need to know the difference between the two types of stock options—incentive stock options and non-qualified stock options. Incentive stock options (ISO’s): Your startup can only give ISO’s to employees! And if you have, you’ll need to fill out Form 3921. Your CPA can complete the form for you, or if you have a special subscription on Carta or Capshare, they can assist as well. Non-qualified stock options (NQSO’s): NQSO’s can be given to either employees or contractors. For employees, you will want to adjust box 12 on their W-2 Form, and provide it to them by January 31st. You’ll. need to work with your payroll provider, perhaps Gusto or TriNet, to make sure the W-2 adjustment is done. For contractors, you’ll need to file Form 1099 Miscellaneous. That is tax reporting for ISO’s and NQSO’s! Again, for ISO’s must have a Form 3921 filed, and for NQSO’s you want to adjust employee’s W-2 for and file Form 1099 Miscellaneous for contractors.

R&D Tax Credits

There have been major changes in how R&D tax credits work in the United States recently, and now many unprofitable startups are eligible to actually save money on their payroll taxes by taking advantage of these changes! The maximum amount an unprofitable company can save is $250,000 per year in payroll taxes - so that means that an unprofitable startup could theoretically save up to a quarter of a million dollars next year! It’s a big deal. Kruze Consulting has conducted R&D tax credit studies that are going to save our clients over $3 million in the coming year. Talk to our experts to see if your startup can cut its burn with these credits, and you can learn more about R&D tax credits for startups here.

What documents are needed to complete a startup’s tax return?

You will need the following documents in order for our accounting team to complete your return:

EIN Letter from the IRS (this is the Employer Identification Number letter that the IRS created for you when you requested an EIN for your company.)
Vital Business Statistics

Business Address
Shareholder SSN/Address info

Prior Year Tax Returns (Federal and States)
Local Tax Returns (if any)
Financials

Full year Balance Sheet
Profit & Loss Statement
General Ledger

Capitalization Table

Our web application makes it easy for you to share these files with us; simply login and upload the documents as you go through our tax software onboarding flow.

What documents are needed to complete a startup’s tax return?

What is an R&D tax credit and what does it mean for startups?

New tax laws now allow pre-revenue startups and unprofitable startups to save money on payroll taxes with R&D tax credits. That means you can cut your startup’s burn with an R&D tax credit study! How do you get these tax credits and cut your burn? We recommend that you do an R&D tax credit study with Kruze. We are a specialized CPA that only works with funded startups. Our clients are collectively saving almost $5 millions this year in payroll taxes - that’s a lot of burns saved.

How much money can you save with the R&D tax credit?

We recommend a full study to determine the actual amount that your startup will save, but here is the rough math that you can do to estimate your potential savings. Multiply your qualified R&D costs by 10%. The maximum savings possible per year is $250,000 - so if you have $2.5 million in qualifying R&D expenses you can save up to a quarter of a million dollars in payroll taxes.

Estimate What Your Startup’s Tax Return Would Cost

Kruze Consulting is the perfect Accounting, Finance and Tax partner for Los Angeles Startups. Kruze delivers exceptional monthly reporting and financial projections. When we need help with benefits or payroll, Kruze solves our problems.

Brett O'Brien

As a startup, moving quickly is a top priority for us and we just needed to get our tax return done. After we uploaded our docs, we got our tax return in 3 days! E-filing was confirmed by Day 4. Super responsive and helpful!

Casey McKerchie

We tried using other CPAs to prep our startup tax return only to find that they weren't startup experts. Kruze knows R&D, SAFE Notes, SaaS, and venture debt and they gave us valuable advice. We have 100% confidence in their work.

Farhad Massoudi

Kruze does startup Tax Returns

Our proprietary software lets us offer startups tax returns at affordable prices*

Seed Stage

Series A

Series B

Series C

Automation to Save You Time & Hassle

Startup Tax Returns - fast!

Almost $5 Millions in Startup Payroll Tax Savings from R&D Tax Credits

Our Tax Leaders

Vanessa Kruze, CPA

Founder & CEO

LaRena Gibson

Federal Tax Manager

Startup Tax Return Cost Calculator

Our online tax return cost calculator estimates the cost of tax preparation – try it now for free!

Cost Estimate Calculator Form

Company Info

Employee Info

Logistics

Disclaimer

Frequently asked questions

Startup Taxes Key Terms

California Franchise Tax

Delaware Franchise Tax

Startup Tax Return

1099 IRS Forms

Tax Reporting for ISO and NQSO

R&D Tax Credits

What documents are needed to complete a startup’s tax return?

What is an R&D tax credit and what does it mean for startups?

How much money can you save with the R&D tax credit?

Kruze Startup Tax Returns

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