What is an R&D Study?
A research & development study is a document that records your business expenses that qualify for the Federal R&D Credit. The R&D Credit is a federal income tax credit that allows companies to get cash back for innovative R&D completed in the U.S. A study can be thought of as cheap insurance for your R&D credit claim in case the IRS ever performs an audit, saving you from having to pay back the credit plus penalties.
What are Beneficial Ownership Information (BOI) Reports?
It is a filing that small businesses and startups need to file with the Financial Crimes Enforcement Network (FinCEN) of the U.S. Government. It includes information about the business (where it was incorporated, any “doing business as” names, employer identification number, address) AND information about its owners and those who have substantial control over the business (name, date of birth, citizenship, residential address, and identification number [along with an upload of a government-issued ID]).
I have very few transactions, do I need a bookkeeping software?
This issue happens time and time again – your investors ask for a copy of your financial statements, and you realize you don’t have anything to send them. Scrambling at the last minute to try and pull together a set of financials is costly and inefficient. By setting your startup up for success from the beginning, you will have financial statements at the ready for investors, 409(a) valuations (required for employee stock compensation), taxes, and your own internal use to track runway, burn rate, and other metrics.
Is it okay to file your Income Tax return late?
The corporate tax deadline is April 15th (for calendar year-ends) but can be extended, very easily, to October 15th. For companies with foreign subsidiaries or foreign shareholders, there is an automatic $10,000-$25,000 IRS penalty for filing late. Further, you run the risk of not taking advantage of the refundable research and development tax credit only offered to startups that file on-time.
What are the tax deadlines?
Visit our Accountalent blog article, ‘Tax Deadlines for Your Startup‘ to mark your calendar with important U.S. tax deadlines.
What is the deadline for the BOI Report Filings?
The deadline for the initial report for companies created prior to January 1, 2024 is December 31, 2024. For companies created on, or after, January 1, 2024; the deadline for the initial report is 90 days from formation. Upon any changes to the information requested about the business or its beneficial owners (including things as simple as change of address), the Company has 30 days to file an updated report with FinCEN. Fines for missing the deadline are $500 for each day the report is late.
When is it time to hire a bookkeeper?
For every founder, the answer will be different. If your business has very few transactions and you can allocate 1-4 hours per month categorizing transactions in a bookkeeping software and reconciling to the bank statements, then you may not need a bookkeeper yet. However, if you don’t have 1-4 hours to allocate or have many transactions – then it’s time for a bookkeeper.
Why should I choose Accountalent for my R&D Study?
Accountalent has helped thousands of startups claim a combined $100M+ in refundable R&D Credits. Our specialized software helps us conduct our R&D Studies at a fraction of the cost of other firms, while also ensuring they are compliant with IRS guidelines.
What is the basis of accounting my books are prepared on?
We use the accrual basis of accounting when preparing your books to avoid a costly transition later.
Do I have to sign-up for bookkeeping in order for Accountalent to prepare our taxes?
No. Although we heavily recommend all startups to be on a bookkeeping platform and have a bookkeeper – it is not required for us to prepare your taxes. All of our services are a la carte.
Are there exceptions to having to file BOI Reports?
Yes, the first is being a big business defined as a business that has $5M of revenue AND over 20 employees. There are additional exceptions based on the industry a business is in, which can be found here: BOI Small Compliance Guide v1.1 (fincen.gov), page 11, specifically.
What business costs qualify for R&D credit?
To qualify for the R&D Credit, only specific expenses such as direct payroll, contractor fees, computer rentals, and research-related supplies can be considered qualifying expenses. An accurate and compliant R&D study is crucial to validate your claim with the IRS, ensuring eligibility and maximizing your credit.
Are AP/AR services included in your services?
They are not included, our bookkeeping services ensure all of your transactions are accurately categorized, reconciled to your bank statements on a monthly basis and financial statements on the ready.
I’m pre-revenue, do I need to file taxes?
Yes. If you are a C-Corporation, which most funded startups are, you need to file Form 1120 with the IRS every year, even if there is no activity. There may also be additional reporting requirements with various states you are located in. Failure to file is a disclosable event during due diligence and could put future fundraising at risk.
What is the Corporate Transparency Act (CTA)?
The Corporate Transparency Act (CTA) was enacted in 2020 and became effective January 1, 2024. The purpose of the act is to deter money laundering, terrorism funding and other financial crimes. There is required reporting by U.S. businesses to the Financial Crimes Enforcement Network (FinCEN) that will make it more difficult for criminals to hide their activities.
Do I really NEED an R&D Study?
Claiming an R&D tax credit doesn’t require a study; however you’ll want a study performed in order to defend against an IRS audit. This will save you money and a headache in the future after claiming.
Can Accountalent scale with my startup?
Yes. We support your startup’s finances from Seed to C.
Does Accountalent charge by the hour for one-off requests?
No. Our income tax pricing is a fixed fee approach, meaning you are welcome to ask any questions throughout the year as part of the one-time fixed fee pricing for your returns.
Do you support international companies?
Yes, we support the U.S. based entity as a parent or subsidiary to the international company. We will ensure all of your U.S. based income tax responsibilities are handled accurately and timely.
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Our Services
We provide unlimited, comprehensive income tax and financial services for startups of all stages. Accountalent handles income tax compliance, R&D studies, and other support services to ensure you’re IRS-compliant and getting best practices across the board.
Income Taxes
Accountalent offers an annual tax subscription geared specifically to startups that covers all your income tax compliance needs. This covers 1099’s, DE Franchise Tax Reports, and Federal & State Income Tax Returns.
Bookkeeping
Accountalent’s bookkeeping is specifically tailored for tech startups. We guide you through bookkeeping setup, putting you in control of your accounts and placing us as managers. Starting at just $199 per month, we are the most cost effective solution for startups.
R&D Study
Startups are eligible for up to $500,000 in refundable R&D Tax Credits annually. Accountalent’s AI-enabled software and startup-friendly prices help you maximize your refund.
Beneficial Ownership Filing
Accountalent’s easy process flow allows for simple BOI filings with monitoring services to ensure changes are reported timely. Your trusted advisors are here for you each step of the way.
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