So you have this great idea for being the next San Francisco technology startup. That is absolutely great, because you are going to make certain that you succeed. You may not be quite the next Steve Jobs, but then again, who knows?
Of course, the thing about any business, whether it’s a startup or has been going for years, is that as soon as it starts to make a profit you will run into that dreaded three letter word – TAX!
Sadly, it is a fact of life. You work hard. You make a profit. The IRS is simply not going to let you keep all of it. No, the IRS does not generate wealth: it is there for the sole purpose of extracting money from those who do create wealth. What’s more, the greater the amount it can extract from you the happier it is!
This is precisely why it is absolutely vital to obtain the finest advice possible from a San Francisco accounting firm for technology startups, even before you have made a cent of profit. The vast majority of people planning a startup don’t even begin to consider tax. In fact, in most cases that is the last thing on their minds.
A Big Mistake
However, this is a big mistake. We have to assume that your goal is to make a profit – and the bigger the better. That is a very laudable and understandable approach, but by taking advice from a San Francisco accounting firm for technology startups now – before you ever make a sale – you can ensure that you put into place the best practices and systems to ensure that when you DO start making a profit you keep your taxes to the absolute minimum.
It is quite one thing to begin to make a profit and suddenly find that your idea is taking off and flying, and money is pouring through the door, but it is only at that stage that the majority of entrepreneurs even begin to think about the tax aspect. By this time it can be too late if you have failed to position your business to take maximum advantage of the tax laws.