When Should a Startup Hire a CPA?

Hire a CPA when any of these happen

• You incorporate (Delaware C-Corp, LLC, or otherwise)
• You issue founder equity or grant employee options
• You raise outside capital (friends/family, SAFE, priced round)
• You hire your first employee
• You open bank or credit accounts under the company name
• You generate revenue in a state where you don't live
• You qualify for R&D, QSBS, or other startup-specific credits

What a startup CPA does in year one

• Files the 83(b) election within 30 days of equity grant
• Sets up the chart of accounts with investor-grade categories
• Registers the company for state withholding and franchise taxes
• Files initial annual reports and Delaware franchise tax
• Tracks R&D expenditures for the federal R&D credit
• Issues 1099s and prepares the first 1120/1120-S return

Costs to expect

• Entity setup support: $500–$2,000 one-time
• Monthly bookkeeping: $400–$1,500
• Annual tax prep (1120 or 1120-S): $1,500–$3,500
• Delaware franchise + annual report filings: $300–$600
• R&D credit study: $3,000–$10,000 (paid out of credit recovered)

Founder tax issues a CPA prevents

The 83(b) deadline is 30 days from grant — no extensions, no exceptions. QSBS qualification depends on the company being a C-Corp at issuance. Reasonable compensation for S-Corp founders becomes an IRS focus once revenue picks up. Every one of these gets harder to fix retroactively than to do correctly the first time.

What about pre-revenue startups?

Even pre-revenue, you need to file zero-revenue returns, Delaware franchise reports, and any state-level minimum taxes. A few hours of CPA time per year is enough until you hit the trigger events above.