Why do I have to pay higher taxes for being self employed than I did when I was working for a corporation, even though I am earning the s… 

My answer to Why do I have to pay higher taxes for being self employed than I did when I was working for a corporat… Answer by Wray Rives: The biggest difference tax wise between self employment and working as an employee is self-employment tax, income tax rates are the same for the same taxable […]

Do I have to file an 83b as a startup advisor? 

Answer by Wray Rives: There is no requirement that you ever file an 83(b) election, doing so is completely optional.  When you receive restricted assets, such as stock options with a vesting schedule, you are not required to report the receipt of that asset as income, until you have the full rights to sell that […]

How do I process SaaS payments with the help of a US LLC/corporation? 

Answer by Wray Rives: SaaS or subscription services are generally consider digital goods for tax purposes and are subject to US income tax and depending on the state you register in state level income and sales tax also. First forming a US corporation will require filing a US corporate tax return and paying US federal […]

Why do I have to pay higher taxes for being self employed than I did when I was working for a corporation, even though I am earning the s… 

Answer by Wray Rives: The biggest difference tax wise between self employment and working as an employee is self-employment tax, income tax rates are the same for the same taxable income.   When you are an employee you pay 7.65% FICA and Medicare tax and your employer pays a matching amount for a total 15.3% […]

How do I find a trustworthy CPA for my startup? 

Answer by Wray Rives: I would concur with John Cody's answer with one exception that limiting yourself to a local CPA can also unnecessarily limit your choices.  Most services offered by a CPA can be performed remotely these days.  The local CPA model is becoming outdated, because technology allows you to offer tax, accounting, bookkeeping […]

How important is it to file a Section 83 (b) election for an LLC S-Corp? 

Answer by Wray Rives: I concur with Karl Stevens in fact most S Corporations today are LLC's at the legal entity level.  S Corp and LLC are two very different questions. As to the original question about making an 83(b) election, it is very critical that you understand the consequences of making the election for […]

If a company is incorporated in Delaware, but has a bank account in NY in which state should this company report taxes? Could it cause do… 

Answer by Wray Rives: You will have to file taxes in Delaware, because at a minimum DE franchise tax will be due.  Just having a bank account in NY would not be a problem, but if the owner(s) are physically located in NY and working from NY, then the company will have to register and […]

If I did my taxes on the 28th when when Would I get them back? 

Answer by Wray Rives: Assuming we are talking US tax, if you filed your return early and are expecting a refund, you should expect to wait a while.  Ninety percent of fraudulent refund claims are filed from the time efiling opens until mid to late February.  The IRS will review every refund claim much closer […]

Should our multi-member LLC have clients send us a 1099 for the work we performed? 

Answer by Wray Rives: You should not get a 1099 from your own LLC and if the money went to the LLC then you should not receive a 1099 from your clients.  If you are a multi-member LLC and have not made any corporate elections for the LLC, then you should be filing your taxes […]

Does an U.S. citizen who lives abroad and is a partner in a foreign entity taxed as partnership owe self-employment taxes? 

Answer by Wray Rives: Yes you do owe self employment tax on foreign taxable self employment.  You may avoid some US taxation if there is a totalization agreement between the US and your resident country.  Self employment income that is exempt from US income tax due to the foreign earned income exclusion (What is earned […]