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Ask HN: Tax issues with failed startup?

3 points by jboggan ↗ HN
I've always done my own (simple) taxes but in 2014 I did a startup full-time for most of the year and had a lot of expenses relative to what I made the other months. My main concerns are getting personal deductions for the expenses incurred, figuring out how to report for the LLC we formed, and making sure we close that entity up with no outstanding reporting requirement.

Does anyone know any accountants who have any experience cleaning up this sort of startup mess? I'd also appreciate any advice in general about pitfalls in resolving this sort of thing or transactions that you were able to expense. Thanks!

5 comments

[ 3.5 ms ] story [ 18.9 ms ] thread
davismwfl
Find a local tax accountant that handles small businesses. Really your situation isn't likely that complex (to a tax person that is) and even probably an H&R Block can do it quite well. You will sit with them and go through things and provide all the details and they'll help you get it together. I have used a variety of people, but now have one that is a firm that is medium sized and handles both public and private companies and is honestly really fairly priced for a small business but they also help me with regular accounting chores too.

I will say, I actually used H&R Block a number of years back when I had partial income from a 1099 and a lot of losses from a business that failed, plus some income. They actually did really good for me, and were really detailed, plus they provided audit protection which was awesome, and thankfully I didn't need it.

jboggan
Thanks, I hadn't seriously considered them.
ianlevesque
I had a good experience with H&R Block as well my first year in business. I've since moved on to an independent CPA.
sharemywin
an accountant doesn't usually close up the various state and federal accounts. sales tax, workers compensation, unemployment, etc. make sure you do it. most of them are pretty easy to work with later if you can show you went out of business but it's alot easier to do it now.
MalcolmDiggs
In my experience, it pays to print out something formal stating that the business is closed and the entity is dissolving; then file whatever you need to with the Secretary of State. Then, reach out the FTB, the BOE, the IRS and anybody else you might owe money to, and see if they'll just close the records on that entity. That worked for me when I wound-down a failed C-Corp, saved me a few thousand dollars in the end (the FTB just wrote off the minimum-franchise-tax as uncollectable, etc). But getting a good tax guy is obviously a high priority as well.