Let’s Be Real: Taxes Probably Weren’t in Your Startup Pitch Deck
You’re hustling to grow your business, land funding, and build something amazing. But tax planning? Yeah, that probably wasn’t on your radar.
Here’s the problem: Ignoring taxes can cost you thousands. And the worst part? You don’t even have to be doing anything wrong to overpay, you just need to know what deductions, credits, and strategies you’re missing.
At Insogna CPA, a trusted Austin, Texas CPA firm, we specialize in helping startup founders keep more of their money by using smart, legal tax strategies. So, let’s talk about how to stop overpaying and start saving.
3 Tax Mistakes That Are Costing You Money
Mistake #1: Not Tracking Expenses Properly
Swiping your personal card for business expenses? Mixing personal and business finances is a tax deduction nightmare and an IRS red flag waiting to happen.
Fix It: Open a business bank account and credit card ASAP. Use tools like QuickBooks or Xero to track your expenses automatically.
Mistake #2: Missing R&D Tax Credits
You don’t have to be running a Google-level research lab to claim R&D credits. If you’re developing software, designing new products, or improving processes, you could be eligible for up to $500K in payroll tax credits.
Fix It: If your startup is spending money on engineering, software development, or even cloud computing, you might be able to lower your tax bill or get cash back.
Mistake #3: Sticking with an LLC for Too Long
Running your startup as an LLC forever might be a mistake. As soon as you hit $50K+ in profit, an S-Corp election can cut your self-employment taxes in half.
Fix It: Talk to a CPA in Austin, Texas (like us!) to figure out if switching to an S-Corp is the right move.
What Deductions Are You Actually Allowed to Take?
If you’re not writing off everything you can, you’re basically giving the IRS a donation—and let’s be real, they don’t need it.
Startup Costs You Can Deduct:
- Legal & filing fees for setting up an LLC, S-Corp, or C-Corp
- Website, branding, and marketing expenses
- Software subscriptions (yes, your Slack, QuickBooks, and Zoom are deductible!)
- Business travel, networking events, and conferences
- Hiring a CPA, lawyer, or business consultant (that’s right—our fees are deductible!)
Pro Tip: The IRS lets you deduct up to $5,000 in startup costs in your first year. If you’re not tracking these expenses, you’re overpaying.
When Should You Switch from an LLC to an S-Corp?
Here’s a quick test:
- Your startup is making over $50K in profit
- You’re paying way too much in self-employment taxes
- You’d rather pay yourself a salary + take distributions (and save money)
If that sounds like you, it’s time to talk about an S-Corp election.
Why?
- LLC owners pay self-employment tax (15.3%) on 100% of profits.
- S-Corp owners only pay self-employment tax on their salary—not on their full profits.
Example:
Let’s say your startup makes $100K in profit:
- As an LLC, you’d pay $15,300 in self-employment tax.
- As an S-Corp, if you pay yourself a $50K salary, you only pay self-employment tax on that salary—cutting your tax bill significantly.
How Insogna CPA Helps:
- Analyze whether an S-Corp election makes sense for your startup
- Help you set a “reasonable salary” to stay IRS-compliant
- Set up payroll so everything runs smoothly
Not sure if it’s time to switch? Let’s review your numbers—schedule a consultation today.
Final Thoughts: Keep More of What You Earn
Smart tax planning isn’t about loopholes or sketchy strategies—it’s about making sure you’re not overpaying...
At Insogna CPA, a top Austin tax accountant for startups, we help founders:
- Claim R&D tax credits to reduce payroll taxes
- Deduct startup costs properly to lower tax liability
- Determine the right business structure (LLC vs. S-Corp)
Let’s optimize your tax strategy before it’s too late. Book a tax planning session with Insogna CPA today!