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IndustryAccounting and tax for software companies.
Deferred revenue, R&D credits against payroll tax, Delaware franchise tax, stock options and investor reporting — the accounting that has to be right before a raise or an acquisition.
Where this industry gets it wrong
- Delaware franchise tax calculated by the default method and overpaid by tens of thousands
- R&D payroll-tax credit (up to $500,000 a year) never claimed
- Annual subscriptions booked as revenue on day one
- Section 174 capitalization of software development costs handled wrongly
Questions we hear from tech & saas
We got a Delaware franchise tax bill for $85,000. Is that right?
Almost never. Delaware's default calculation uses authorized shares; the assumed-par-value method usually reduces it to a few hundred dollars. We refile it.
Can we get the R&D credit pre-revenue?
Yes. Qualified small businesses can apply the credit against payroll taxes, which matters exactly when you have no income tax to offset.
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