Are you paying more in taxes than you need to? If you’ve recently converted your business to a C Corporation or issued stock to shareholders, you might be leaving thousands of dollars on the table without even realizing it.
It happens more often than you think—many business owners miss crucial tax-saving elections like the Qualified Small Business Stock (QSBS) and the 83(b) election. The result? Higher tax bills, missed deductions, and a bigger chunk of your hard-earned profits going straight to the IRS.
The good news? You can prevent these costly mistakes with proactive planning and expert support from a trusted Austin, Texas CPA. Let’s break it down and help you keep more of your money.
Are You Missing Tax Elections?
If you’ve recently made big business moves—like restructuring from an LLC to a C Corporation or issuing stock to founders—there’s a chance you’ve missed tax elections that could save you thousands.
Here’s Why It Happens:
- You Didn’t Know About It: Many small business owners aren’t familiar with tax elections like QSBS or the 83(b) and how they reduce tax liability.
- Tight IRS Deadlines: Some elections, like the 83(b) election, must be filed within 30 days of issuing stock.
- It’s Complicated: The language around these elections is confusing, and missing one small step can disqualify you from tax benefits.
The result? Paying higher capital gains taxes and missing out on valuable deductions that could have protected your bottom line.
What Is a Tax Election, and Why Should You Care?
A tax election is a formal choice you make to reduce your tax liability under certain conditions. For C Corporations, two of the most commonly missed elections are:
1. Qualified Small Business Stock (QSBS)
QSBS allows you to exclude up to 100% of capital gains when you sell eligible stock after holding it for five years. This can be a game-changer for long-term tax savings.
Example: If you sell $1 million of eligible QSBS stock, you could pay zero in capital gains taxes.
2. 83(b) Election
If you issue stock or grant equity to founders or early employees, the 83(b) election lets you pay taxes upfront when the shares are issued instead of when they vest and increase in value.
Why it Matters: Paying taxes early often results in lower rates since the value of the shares may be minimal at the time of grant.
Missing These Elections Can Mean:
- Paying thousands more in capital gains taxes.
- Being taxed at higher rates on shares as they grow in value.
- Losing out on tax-saving strategies built for long-term wealth.
How to Fix Missed Tax Elections (or Prevent Them Altogether)
The good news? It’s not too late to take control of your tax situation. Here’s how you can avoid costly mistakes moving forward:
1. Identify Which Tax Elections Apply to You
Not all tax elections are relevant for every business. A trusted small business CPA in Austin, TX can help you figure out which elections make the most sense for your business structure.
Common Elections You Might Need:
- QSBS Election: Ideal for startups and growing businesses planning to sell stock in the future.
- 83(b) Election: Best for founders and early-stage employees receiving equity grants.
- S-Corp Election: If you’re considering moving to a pass-through structure to avoid double taxation.
Pro Tip: Insogna CPA can review your entity structure to identify any missed tax-saving opportunities.
2. Act Fast—IRS Deadlines Are Tight
The IRS doesn’t offer much flexibility when it comes to tax elections.
- 83(b) Election: Must be filed within 30 days of issuing stock.
- QSBS Eligibility: Must be documented at the time of share issuance.
Miss the deadline? Without expert support, your business could lose the ability to claim these benefits permanently.
Pro Tip: Insogna CPA, a top CPA firm in Austin, Texas, can help you stay on track by managing filing deadlines and keeping your records organized.
3. Keep Your Financial Records Clean and Clear
Accurate record-keeping helps you stay compliant and ready for tax-saving opportunities.
- Document all share issuances and entity conversions.
- Track all filing dates and tax elections made.
- Store financial records securely and accessibly.
Pro Tip: Partner with a CPA South Austin professional for bookkeeping and compliance services to avoid costly oversights.
4. Work with a CPA Who Understands Tax Elections
Trying to navigate tax elections alone can feel overwhelming. The rules are complex, and missing one step could cost you thousands. This is where working with a CPA firm in Austin, TX makes all the difference.
At Insogna CPA, we help you:
- Identify Missed Elections: If you’ve already restructured your business or issued stock, we’ll assess if you missed any elections.
- File on Time: We track IRS deadlines and ensure all forms are filed correctly.
- Maximize Your Savings: Our proactive tax strategies help you legally reduce your tax bill while staying compliant.
Real Results: How Insogna CPA Helped a C Corp Save Big
Case Study: A local business owner in Austin converted their LLC to a C Corporation but didn’t file the QSBS election. After reviewing their structure, our team identified the missed election and corrected it in time for their upcoming stock sale—saving them over $75,000 in capital gains taxes.
Why Choose Insogna CPA?
At Insogna CPA, we specialize in helping small businesses and C Corporations stay compliant while maximizing tax savings. Whether you’re restructuring your business or issuing founder shares, we ensure you’re protected against costly tax mistakes.
✅ Top-Rated CPA Firm in Austin Texas
✅ Proactive Tax Planning for Small Businesses
✅ Expertise in Entity Conversions & Tax Elections
Don’t Leave Money on the Table—Act Now
Missing tax elections doesn’t have to cost you thousands. With proactive planning and expert guidance, you can stay compliant, reduce your tax bill, and protect your profits.
👉 Let Insogna CPA, your trusted Austin, TX CPA firm, help you protect your hard-earned money with expert tax strategies.
📞 Schedule a consultation today to take control of your taxes!