When it comes to startup taxes, what do you really need to worry about it? For startups, there are a number of areas of tax concerns including income taxes, compliance/registration issues, payroll, compensation issues, and sales tax. In this presentation, from Early Growth Financial Services, we simplify what startups need to know about their tax obligations to stay out of trouble and, hopefully, save some time and money. Topics covered include: - The tax implications of your legal entity - Available tax credits - Important tax deadlines - 1099/independent contractors vs employee determination - Deferring payment of employment taxes - Dealing with options - And more

1. Startup Tax
Strategies
#startuptaxes
Glenn McCrae
Chief Strategy Officer, CPA
Early Growth Financial Services

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“Startups face a huge burden in today’s
economy, often having to choose
between funneling resources toward
creating their goods and services or
managing the often complex
accounting, tax and financial strategy
planning necessary to run a successful
business.”
~ David Ehrenberg,
Founder and CEO
Early Growth Financial Services
www.earlygrowthfinancialservices.com

3. Presentation Overview
What does “tax” mean to a
startup?
If I have a startup, what do I
need to worry about, in
terms of taxes?
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4. 5 Areas of Tax Concerns
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5. Income Taxes – Implication of Entity
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• Choice of entity?
– Pass-through
– C-Corporation
– S-Corporation
– Partnership
• Are you affiliated with a foreign entity?
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6. Income Taxes
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• Did you file for every year
that you were incorporated?
• Have you taken advantage of
available credits?
– R&D tax credit
– Enterprise zone credit
• Filing deadlines?
• Estimated tax payments?
• Quarterly filing?
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7. Compliance/Registration Issues
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• Delaware filing through
February 28th
• Local municipality -
municipality or HQ location
determines municipality
• 1099/independent
contractors vs employee
determination
• Foreign contractors
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8. Payroll
• Are you using a payroll
provider or DIY?
• Filing requirements are critical
• Deferring payment of
employment taxes
• When taxpayer fails to file a
return – 6020(b)
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9. Compensation Issues
• Options
– Incentive stock options
– Non-qualified options
• Profit interests
• Restricted stock
• Vesting
• Section 409A
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10. Sales Tax
• Very, very complicated
• Each region has its own
issues
• Tax breaks
• Form filing
• What qualifies as a
taxable item?
• Sales tax compliance tools
• What happens to sales
taxes if business is
terminated?
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11. Common Startup Tax Mistakes - Review
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• Choosing the wrong legal entity
• Failure to understand tax
obligations
• Not separating business and
personal finances
• Not deducting business expenses
• Using the wrong tools/systems (or
not using any)
• Not paying quarterly taxes
• Doing your own taxes, without
professional tax help
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12. What to Look for in Your Tax Partners
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• Representation from legal
and accounting side
• Experience with early-stage
companies
• Comprehensive tax
offerings
• Knowledge of tax services
• Audit support services
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13. Filing an Extension
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• Automatic extension
times
• 5 months for
partnerships
• 6 months for corporate
and s-corp
• 6 months for sole
proprietors
• Extension forms
• Form 7004
• Form 4868
• Estimated tax
payments
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14. Q&A and Thank You!
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Glenn McCrae
contact@earlygrowthfinancialservices.com
415-234-3437
http://earlygrowthfinancialservices.com/
@EarlyGrowthFS