Running a business opens up enormous opportunities for growth and scaling. However, the US tax and financial system is one of the most complex in the world. Multi-level taxation (federal, state, and local), strict reporting requirements, and constant changes in legislation make a qualified accountant or CPA (Certified Public Accountant) the most important strategic partner for an entrepreneur. To make cooperation as effective as possible, it is not enough to simply hand over receipts at the end of the year. You need to ask the right questions when choosing a specialist and in your daily work. Here are 9 critical questions that will help you protect your capital and take your business to the next level.
1. Which form of ownership (LLC, C-Corp, S-Corp) is optimal for my business?
The choice of corporate structure directly affects the protection of personal assets, the procedure for paying dividends, and the tax burden. For example, an LLC offers flexibility but can have a high self-employment tax (S-Corp) rate. S-Corp status allows you to optimize these payments for U.S. citizens, while a C-Corp is the standard for attracting venture capital investment. An accountant should analyze your business type, founders’ residency, and profit plans to offer the best solution.
2. What are my tax obligations in different states?
Following the landmark U.S. Supreme Court decision in South Dakota v. Wayfair (2018), the concept of “economic nexus” has changed significantly. If you sell goods or services online throughout the United States, you may be required to register, collect, and remit sales tax in states where you have reached a certain sales threshold ($100,000 or 200 transactions). Failure to comply with this obligation can result in large fines.
3. What deductions and tax credits can I legally use?
US tax law offers hundreds of options to reduce your taxable income. An experienced CPA will tell you how to properly write off expenses for a home office, business trips, marketing, meals with clients, or a car. In addition, it is worth learning about special credits, such as the R&D tax deduction, which is often available even to young IT startups.
4. How to properly structure financial statements for investors and banks?
To attract loans or investments, you need to use standardized financial statements: income statement (P&L), balance sheet, and cash flow statement. An experienced specialist will help you set up management financial statements so that the reports are understandable to US banks and institutional investors.
5. What quarterly and annual deadlines are crucial for our company?
In the US, penalties for late filing of reports (for example, Form 1120 for corporations or 1065 for partnerships) can be extremely high. In particular, failure to file Form 5472 for foreign sole proprietorships or LLCs carries a $25,000 penalty. Your professional should create a clear calendar of quarterly estimated taxes and annual reports.
6. What accounting system and integrations do you recommend?
Automation is the key to error-free accounting. A CPA should recommend software that meets your needs (QuickBooks Online, Xero, Wave, etc.) and set up its integration with payment systems (Stripe, PayPal) and bank accounts. This will ensure real-time accounting and reduce the cost of manual data entry.
7. How to properly pay salaries to founders and employees?
Payroll in the United States is accompanied by mandatory withholding taxes for Social Security, Medicare, and federal and state income taxes. Depending on your status (W-2 employee or 1099 contractor), the rules are different. Misclassification of employees carries serious penalties from the Department of Labor (DOL) and the IRS. That’s why you need payroll accounting services to pay salaries.
8. Do we need to file a BOI report?
The Corporate Transparency Act, administered by FinCEN, will take effect in 2024. Most small businesses are required to file a BOI report. Ask your accountant if filing this report is part of their services and what the deadlines are for your business.
9. How do you calculate the cost of your services and what will our monthly communications look like?
Transparency in your relationship with your accountant is essential. Find out if you pay a flat monthly fee or a flat fee, or if you are billed on an hourly basis. It is also important to agree on how often you will hold strategy meetings – monthly or quarterly – to adjust the financial plan.
