Ask HN: Recommendations for inexpensive startup accountant in Silicon Valley?

4 points by siracguy 15 years ago | 2 comments

I have a small hobby business set up as an LLC in California (no revenue yet). Since this is treated as a sole proprietorship, as far as I know the only tax filing requirements are the annual $800 on Form 568, and there should be no other federal or state tax requirements.

Just to be sure, though, I was thinking of consulting an accountant, and asking them to file the annual taxes, 568 etc. Since I'm not yet generating any income and will not be for a while (this is a part-time organic endeavour), I want to keep my costs down as much as possible.

This is turning into a two-part question: a. Does anyone see any flaws in the reasoning? Are there any CA/Fed tax filing requirements anyway even if you don't earn any income, and only have expenses? b. Does anyone have recommendations for an accountant who will do the minimal work required for a very low fee (ideally flat fee)?

A google search of Hacker News and general web sites didn't turn up the answer to the above question, so I thought I'd ask.

In the spirit of giving back, I found that Simplicity Law (based in CO and CA) provided exactly what I needed on the legal side: low flat-fee pricing and understanding lawyers who're willing to work with newbie-personal-startups, mainly via email. [I'm not affiliated with them in any way, email me if you want more info about my interaction with them.] I'm looking for someone exactly analogous for tax/accounting purposes.

dennykmiu 15 years ago |

If you have no income then there is no "income" tax (neither Federal or State). If you have an office and you are meeting customers, you might have to pay City tax (depending on the City). Once you have income, things start to change. First of all, the $800 Franchise tax is a minimum and California actually charges a percentage based on your "gross" income, not net profit. Also, Federal treats any income you incur as an LLC as employment and is subject to self-employment tax (in addition to Federal and State income tax). My own experience is that in the beginning of a startup, you don't have enough that actually warrants hiring an accountant. My advise is that you learn to be your own accountant until you start hiring. It actually is a good exercise to start paying attention to money as opposed to just hiding behind the comfort of being a technologist. Good luck.

siracguy 15 years ago | |

Thank you, Denny. That's a good point about self-employment tax.

Yes, that was my plan, to do it myself, but I find that I'm spending quite a lot of time on busy activities like this - as a follower of MVP/Steve-Blank, I'd rather be out talking to (potential) customers.