Questions for the CPA — first consult

Use this document as your consult agenda. Take it into the meeting; the background and primary sources are already staged in the sibling research docs so the CPA can jump straight to the judgment calls.

Consult structure

First CPA consult typically runs 30–60 minutes and should cover: (a) engagement + fee structure, (b) entity + tax-classification fit for projected revenue, (c) S-Corp election timing + reasonable-salary requirement, (d) state tax posture, (e) bookkeeping and tools.

A) Engagement and fee framing (ask first)

1. What's your fee structure — monthly retainer, annual flat fee, or per-engagement hourly?
2. Typical annual cost for a single-member LLC with S-Corp election: bookkeeping + 1120-S + K-1 + personal 1040 with Schedule K-1? Expected range for year 1?
3. Do you handle quarterly estimated-tax calculations and reminders, or is that self-service?
4. Do you offer year-round tax-planning or only year-end tax-prep?
5. Which bookkeeping software do you require or prefer — QuickBooks Online, Xero, Wave? Anything on accounts-payable automation (Bill.com)?
6. Do you handle payroll setup and ongoing, or do you recommend a payroll provider and coordinate with them?

B) Entity + tax-classification fit

(Background: entity-structure.md, owner-compensation.md.)

1. For Raxx's projected year-1 revenue of [figure] and year-2 revenue of [figure], does an S-Corp election make economic sense after factoring in payroll, tax-prep uplift, and reasonable-comp defense?
2. Can you produce a written S-Corp breakeven memo with specific numbers for my situation?
3. At what revenue threshold would you typically recommend a solo founder layer on the S-Corp election?
4. Are there any reasons not to elect S-Corp for my profile (state-level consequences, future investment plans, mix of earned vs. passive income)?

C) S-Corp election — timing and late-election relief

(Background: owner-compensation.md.)

1. If we form the entity this month, should we file Form 2553 immediately effective this tax year, or wait and file for next January 1 (2-months-15-days rule)?
2. If we miss the 2553 deadline for an intended effective date, will you handle Rev. Proc. 2013-30 late-election relief with a reasonable-cause statement?
3. Does my home state recognize the federal S-Corp election automatically, or is a separate state-level election required (NY) or a state-level tax still imposed (CA's 1.5% S-Corp tax, e.g.)?

D) Reasonable compensation

1. Based on my role (sole founder / CTO of a pre-revenue SaaS, geography [home state]), what's a defensible reasonable-salary range?
2. Will you produce an RCReports analysis (or equivalent) annually so I have documentation if audited?
3. How should I think about increasing salary as revenue grows — annual cadence, or tied to specific revenue triggers?
4. Should the reasonable-compensation salary be set on a W-2 basis pre-year-start with a written board resolution, or adjusted quarterly?

E) Payroll setup

(Background: owner-compensation.md.)

1. Which payroll provider do you recommend for solo S-Corp owners — Gusto, QuickBooks Payroll, Justworks, OnPay, or other? Integration cost with your tax-prep?
2. Do you prefer I register the state employer withholding and unemployment accounts myself, or do you or the payroll provider handle it?
3. Workers' comp: do I need it as a sole S-Corp shareholder-employee in [home state], or is there a sole-owner exemption?

F) Quarterly estimates + safe harbor

(Background: owner-compensation.md Sources [4].)

1. Who computes my quarterly estimated-tax vouchers — you, or do I self-compute with Form 1040-ES?
2. What's the penalty-avoidance safe harbor for my income level (pay 100% of last year's tax, or 110% if AGI > $150k)?
3. State-level estimated-tax schedule for [home state] — do you handle it?

G) Health insurance, retirement, home office

1. Health insurance as a >2% S-Corp shareholder: how should I structure it (S-Corp pays premium → reported as W-2 Box 1 wages → self-employed health-insurance deduction on 1040)? Do you handle the year-end W-2 entry?
2. Retirement: Solo 401(k), SEP-IRA, or SIMPLE IRA for a single S-Corp owner — which fits best for my profile? Contribution limits, deadlines?
3. Home-office deduction: for an S-Corp, the "accountable plan" reimbursement is the clean path. Can you set up the accountable-plan policy and the reimbursement mechanics? What records do I need to keep?
4. Augusta Rule / § 280A(g) rental to entity: are we using that for any shareholder-to-entity transactions, or are you not a fan?

H) State tax and sales tax

(Background: ein-and-tax-ids.md.)

1. Does my home state tax SaaS? At what revenue / nexus thresholds does sales tax become my obligation in other states post-Wayfair?
2. Do you recommend a sales-tax tool (Stripe Tax, Avalara, TaxJar), or handle it manually until we cross thresholds?
3. Economic nexus planning — do you monitor threshold crossings by state, or is that on me / a tool?

I) Bookkeeping and integration

1. Chart of accounts recommendation for a SaaS company — do you have a template?
2. How do you want Stripe/bank/credit-card feeds into QuickBooks / your system? Any deliverables on my end to prep for monthly close?
3. Cash vs. accrual basis — which do you recommend for a pre-revenue to early-revenue SaaS?

J) Founders Pro pricing — SaaS COGS and at-cost framing

(Background: docs/business/founders-pro-pricing-rationale.md.)

These questions are specific to the Founders Pro $19/mo SKU and should be addressed before the price is committed publicly or in Stripe.

1. COGS vs. operating expense for SaaS infra. Heroku compute, Alpaca market data, and Anthropic API calls are directly attributable to serving each paying user. For a PA LLC (disregarded entity or S-Corp), should these be treated as COGS on a gross-margin view, or as operating expenses on Schedule C / Form 1120-S? Does the treatment affect what "at-cost" means in a pricing narrative?

2. Revenue recognition for a monthly subscription cohort. Founders pay $19/mo on a month-to-month basis. If any Founder pre-pays annual, is there a deferred-revenue obligation under cash-basis vs. accrual? Which basis do you recommend for this stage of the business?

3. Is $19 "at-cost" or "below-cost" accounting-wise? The break-even analysis (see founders-pro-pricing-rationale.md §2) shows $19 is slightly below cost at fewer than ~14–22 users. At what point does selling below cost create any accounting or tax obligation — e.g., does selling below cost to a defined cohort have any gift or promotional-discount implications at the entity level?

4. PA and CA sales-tax nexus for SaaS. Pennsylvania is a complex SaaS tax state. Does Raxx's current activity (pre-revenue, pre-launch) create a taxable SaaS obligation once the first $1 of subscription revenue is received? Kristerpher spends approximately 4 months/year in California — does that create CA nexus for the business, and does CA's SaaS taxability treatment apply?

5. Home-office deduction interaction with infra costs. If a home-office deduction is claimed, how does the CPA want Heroku/Alpaca/Anthropic expensed — as direct business costs separate from the home-office computation, or blended? The bookkeeper convention (docs/finance/chart-of-accounts.md) defers home-office to the CPA; confirm the handling before the first paid revenue quarter.

K) Data licensing costs (added 2026-04-23) — historical options-chain data vendor

(Background: docs/data-science/historical-options-data-vendors.md §6. Priority: HIGH — blocks finalization of Founders Pro pricing unit economics.)

Context: Raxx is evaluating adding a historical options chain data vendor (candidate: ORATS at ~$199/mo retail, enterprise pricing TBD) to power MBT's backtest engine. This fee would be incurred at the entity level, shared across all users.

1. COGS classification. Is a fixed monthly options data licensing fee (e.g., ORATS at $199–$500/mo) correctly classified as COGS or as an operating expense for a Pennsylvania LLC treated as a disregarded entity or S-Corp? How does the COGS vs. OpEx classification affect the gross-margin view and the Schedule C / Form 1120-S presentation? The gross-margin model in docs/business/founders-pro-pricing-rationale.md §1.1 treats Alpaca and Heroku as effectively COGS — should this new data line item be treated the same way?

2. Variable vs. fixed cost treatment. The data license fee does not scale with user count (flat monthly fee regardless of users). This makes it economically semi-fixed, similar to Alpaca at $90.75/mo. For IRS purposes, is a flat-rate data subscription distinguishable from per-unit COGS, and does that distinction matter for the entity's tax return?

3. One-time historical data archive. If Raxx also purchases a one-time historical data archive (e.g., ORATS one-time export cited in community sources at ~$2,000 for full 2007-to-present history; confirm price with ORATS directly), is that cost: (a) a capital expenditure to be amortized over its useful life under IRC §167/§197, or (b) an expensed operating cost deductible in the year of purchase? What amortization schedule applies if it is a capital expenditure?

4. Break-even impact for Founders pricing narrative. Adding a $199–$500/mo data line item shifts Founders break-even from ~14–22 users to ~25–41 users (depending on price). Does this change your view on the "at-cost" pricing narrative, and does the break-even shift have any implication for how the Founders pricing should be described to customers from an accounting or contractual-obligation standpoint?

Priority for this consult: K1 and K3 are the highest-priority questions from this section. K1 determines whether this cost appears above or below the gross-margin line. K3 determines the tax treatment of the one-time archive purchase, which affects year-1 cash-flow planning.

L) Pre-formation expenses + software license treatment (added 2026-05-03)

(Background: docs/business/expenses/2026-05-03_FastSpring_FreeScout_modules.md. Priority: HIGH — affects how all pre-formation software purchases are classified.)

Context: On 2026-05-03, Kristerpher purchased 10 lifetime FreeScout module licenses through FastSpring for $105.75 total ($97.91 + $7.84 sales tax). MooseQuest LLC is not yet formed as of this purchase date. This is the first software purchase that surfaces the pre-formation classification question cleanly.

1. Pre-formation operating expense vs. start-up cost under IRC §195. This purchase was made before MooseQuest LLC exists. Should it be treated as: (a) a 2026 Schedule C operating expense for the ongoing sole proprietorship, (b) a start-up cost under IRC §195 to be claimed in the year of entity formation, or (c) something else? Does your answer change depending on whether MooseQuest LLC is formed in 2026 vs. 2027?

2. Lifetime software license — de minimis safe harbor vs. capitalization. The 10 module licenses are "lifetime" (one-time fee, no renewal). The highest single-module price is $14.99; the aggregate pre-tax total is $97.91. Does the de minimis safe harbor under Treas. Reg. §1.263(a)-1(f) ($2,500/item threshold for taxpayers without an applicable financial statement) permit full expensing in 2026 — either per-module or in aggregate? Or does the "lifetime" framing trigger IRC §197 or IRC §167(f) amortization analysis?

3. Sales tax jurisdiction question. FastSpring (CA-based reseller) collected 8.01% sales tax on this PA purchaser's order. The 8.01% rate does not map cleanly to a standard Santa Barbara, CA rate, and Pennsylvania also imposes sales or use tax on some software purchases. Was the correct jurisdiction's tax collected? Does Kristerpher owe any PA use tax on the difference (if any), or does FastSpring's collection satisfy the obligation?

4. Going-forward convention for pre-formation purchases. Should all software tool purchases made before entity formation be tagged confirm-with-CPA and held in a sub-ledger pending formation, or is it cleaner to book them to Schedule C immediately on a cash basis and not revisit at formation? Requesting a standing convention so the bookkeeper can apply it consistently.

Priority for this consult: L1 is highest priority — it sets the convention for all pre-formation purchases. L2 is moderate — affects year-1 deduction timing. L3 is low priority (small dollar amount) but should be resolved before the PA return is filed.

M) GitHub org business account — Schedule C and pre-formation treatment (added 2026-05-06)

(Background: docs/legal/research/github-org-pre-llc-2026-05-06.md. Priority: MEDIUM — apply the same pre-formation convention established in §L to this new recurring expense.)

Context: On 2026-05-06, Kristerpher created a GitHub organization (raxx-app) on the GitHub Team plan at $4/user/month, entering "Raxx" as the business name — before any Raxx LLC or corporation is formed. This expense begins recurring monthly from this date forward.

1. Schedule C vs. IRC §195 start-up cost for GitHub Team subscription. This recurring subscription begins before Raxx LLC exists. Applying the convention established in §L: should the GitHub Team plan monthly fee be treated as (a) a 2026 Schedule C operating expense for the ongoing sole proprietorship, or (b) a pre- formation start-up cost under IRC §195 to be claimed in the year of entity formation? Does the fact that this is a recurring monthly charge (not a one-time purchase) change the analysis compared to the one-time FreeScout license in §L?

2. DBA commencement date and Schedule C business name. By entering "Raxx" as the GitHub org business name on 2026-05-06, has Kristerpher implicitly commenced operating under a fictitious business name for Schedule C purposes? Should the business name on Schedule C for 2026 reflect "Raxx" if that name is in active use, and does the GH org creation date function as the DBA commencement date for any state reporting purpose?

Priority for this consult: M1 applies the pre-formation convention from §L and should be resolved in the same conversation. M2 is low urgency but should be confirmed before the 2026 return is prepared.

N) International expansion — tax, VAT, and payment-rails questions (added 2026-05-09)

(Background: docs/legal/research/i18n-launch-language-research-2026-05-09.md Section 7.2. Priority: MEDIUM pre-launch; HIGH once first non-US subscriber is accepted.)

Context: Raxx's v1 launch (2026-05-23 UTC) targets US customers. Post-launch Tier 2 expansion (60–90 days) may include Canada, UK, Australia, Germany, France, and Spain. Each market introduces tax-collection, currency, and payment-processing obligations that are separate from and parallel to the legal/language questions in the attorney section.

1. VAT / GST collection obligations — per market. When Raxx collects subscription fees from: (a) UK residents — 20% VAT (UK Making Tax Digital); (b) EU residents (Germany 19%, France 20%, Spain 21%, Netherlands 21%); (c) Australian residents — 10% GST (ATO Low Value Imported Services rules); (d) Canadian residents — 5% federal GST + provincial HST/PST/QST (Quebec 9.975% QST); what are the registration thresholds, registration deadlines, and remittance obligations for each? Does a single subscriber in any of these countries trigger an obligation immediately, or is there a threshold (e.g., EUR 10,000 for EU OSS)?

2. EU OSS (One Stop Shop) registration. Is Raxx eligible to register under the EU VAT One Stop Shop (OSS) non-union scheme to simplify multi-member-state VAT collection? What is the registration process for a US-domiciled entity? Does OSS registration eliminate the need for individual country VAT registrations?

3. Permanent establishment (PE) risk for SaaS. Does accepting subscribers in UK, EU, Australia, Singapore, or Canada create a taxable permanent establishment in any of those jurisdictions? Is there a safe-harbor threshold (e.g., number of users, revenue, or days of activity) below which PE risk is negligible for a US-domiciled SaaS with no physical presence?

4. Canada GST/HST + Quebec QST registration. Canada requires non-resident digital service providers to register for GST/HST once CAD $30,000 in annual revenue from Canadian customers is exceeded. Quebec separately requires QST registration on the same threshold. At what point does Raxx need to register, and can a single filing cover both federal and Quebec obligations?

5. Payment processor + multi-currency. Which payment processors (Stripe, Braintree, Paddle, Lemon Squeezy) handle merchant-of-record VAT/GST collection on Raxx's behalf vs. requiring Raxx to register and remit independently? Does a "merchant of record" (MoR) model (e.g., Paddle or Lemon Squeezy) meaningfully reduce Raxx's international tax compliance burden at this stage?

6. Transfer pricing — if a separate international entity is ever formed. If Raxx creates a UK Ltd, German GmbH, or other international subsidiary to hold EU market operations, what transfer pricing documentation is required between the US parent and the foreign subsidiary? What's the minimum viable structure for a sub-$1M revenue stage company?

7. Brazilian withholding tax on software. If any Brazilian users are ever accepted, Brazilian law (Instrução Normativa RFB 1455/2014 and related) imposes withholding taxes (IRRF, CIDE, PIS/COFINS) on software license payments from Brazilian payers to foreign entities. What is the applicable rate on SaaS subscriptions, and does the US-Brazil tax treaty mitigate this?

Priority for this consult: N1 (VAT/GST per market) and N5 (payment processor MoR option) are highest priority — N5 in particular could eliminate a large compliance burden if Raxx adopts a MoR payment processor before the first non-US subscriber signs up. N2 (EU OSS) should be evaluated alongside N1. N3 (PE risk) should be confirmed with an international tax advisor or big-4 firm with OECD treaty expertise before any EU marketing begins. N4 (Canada GST/HST) should be confirmed with a CA-licensed CPA before any Canadian paid subscriber is accepted.

CPA type needed: US CPA with international SaaS / digital-services tax experience. If current CPA does not handle international VAT/GST, request a referral to a specialist with experience in EU OSS, UK MTD, and Canadian GST/QST for non-resident digital services.

P) Customer-facing tax features — CPA input (added 2026-05-21)

(Background: docs/business/legal-research/customer-tax-features-legal-posture-2026-05-20.md §13. These questions are about what the product should display to customers, not about operator tax obligations. Priority: HIGH — resolve before shipping any tax-adjacent feature to customers.)

P1. PA-specific treatment of §1256 contracts. Pennsylvania does not distinguish short-term vs. long-term capital gains — all capital gains are taxed at the flat 3.07% personal income tax rate. The federal §1256 60/40 treatment (60% long-term / 40% short-term) produces a materially different federal tax outcome for PA residents vs. out-of-state residents. Does §1256 60/40 produce any PA tax benefit at all? Should Raxx surface §1256 tags only with a "federal treatment only" label, or is there a PA-level parallel worth surfacing to PA-resident customers?

P2. PA capital loss carryforward limitation — customer disclosure obligation. Pennsylvania does not allow capital loss carryforwards (losses may only offset gains in the same tax year). A customer harvesting losses for federal TLH purposes may not get equivalent PA benefit — the PA loss is "use it this year or lose it permanently." Is there a norm among CPA practices to surface this limitation when advising PA-resident clients on TLH? Should Raxx disclaim it in any tax-loss display, or is that overly narrow for a nationwide platform?

P3. Wash-sale basis adjustment display mechanics. When a wash sale is triggered, the disallowed loss is added to the cost basis of the replacement shares (adjusting up). How should Raxx label the adjusted cost basis in the lot display — show original purchase price, adjusted basis, or both? What label convention avoids confusing customers about the correct basis for the future sale gain calculation?

P4. Form 1099-B reliance as safe harbor for data accuracy. The broker issues Form 1099-B covering within-account wash-sale adjustments and §1256 contract treatment. If Raxx's tax-data display is derived from the same underlying broker data (trade records, lot assignments), and consistent with what the broker will report on 1099-B, does that create a sufficient basis to say Raxx's display is accurate? Or must Raxx independently calculate and verify these figures?

P5. IRS Notice 2025-7 — lot-display as "books and records" recording. IRS Notice 2025-7 provided temporary relief allowing taxpayers to satisfy the specific identification requirement (for SLID cost-basis method) by recording standing instructions in their own books and records, without necessarily pre-notifying the broker before each sale. Could Raxx's lot-display feature — which shows a user's lot-preference setting and the lots that would be selected — serve as a "books and records" mechanism satisfying Notice 2025-7? Or is that a stretch that requires specific broker confirmation at time of sale?

Priority for this consult: P1 and P3 are highest priority — they directly affect UI label decisions for the tax-display features. P4 determines whether the CPA's sign-off on the underlying data model is needed. P2 and P5 can follow once the base features are scoped.

Q) Corporate card + spend-management (added 2026-06-17)

(Background: docs/business/corporate-card-plan-2026-06-17.md. Priority: MEDIUM — resolve before migrating card spend or signing personal guarantee on any business card.)

Context: Ramp declined Raxx because the business bank balance is below Ramp's $25K minimum. The interim plan is Mercury IO charge card (no personal guarantee, no minimum balance, reports to D&B/Experian/Equifax). Spend is ~$250–400/mo; all business: hosting, workspace, dev tooling, DNS, AI/API. PA single-member LLC.

Q1. Personal-guarantee exposure for a PA single-member LLC. Chase Ink Business Unlimited and Amex Blue Business Cash both require a personal guarantee. What are the practical implications for the LLC's liability shield in Pennsylvania? Does signing a personal guarantee on a business card weaken the corporate-veil argument if a creditor ever pursues the LLC? Is the personal guarantee on a business credit card categorically different from a personal guarantee on a business loan in terms of PA veil-piercing risk?

Q2. Business-credit-file strategy. Mercury IO reports payment history to D&B, Experian Business, and Equifax Business. Chase Ink reports to business bureaus (generally not personal). Amex Blue Business Cash reports to BOTH personal and business bureaus. From your perspective, does building a separate business credit file matter for a single-member PA LLC at pre-revenue stage? When does business credit become practically useful (e.g., net-30 vendor accounts, equipment financing, lease applications)?

Q3. Charge card vs. revolving credit — deductibility and bookkeeping. Mercury IO and Ramp are charge cards (balance due in full, no revolving credit). Chase Ink and Amex are revolving. For a cash-basis PA LLC: any deductibility differences between charge-card purchases and revolving-credit purchases? Mercury IO's introductory tier auto-debits daily — how should the bookkeeper treat each auto-debit in the Google Sheets ledger: as a separate transaction-level payment, or batch-reconciled monthly from the Mercury statement?

Q4. Cashback as income vs. rebate. Is the 1.5% cashback earned on Mercury IO or Chase Ink a non-taxable rebate against business expenses, or reportable income? Does it affect the deductibility of the underlying expense? Is there a 1099 implication from the card issuer?

Q5. When does Ramp make economic sense vs. Mercury IO? Ramp requires a sustained $25K business bank balance (monitored daily; a dip triggers automatic limit reduction). Effectively this is an opportunity-cost requirement. At what revenue / spend level does Ramp's expense-management infrastructure justify maintaining that cash floor? What's your rule of thumb for when a dedicated spend-management platform becomes worth the reserve requirement?

Questions by priority

Must answer this consult: - A1, A2, A6 (engagement + payroll coordination) - B1, B2 (S-Corp fit + breakeven memo) - C1 (2553 timing for this year) - D1, D2 (reasonable salary + RCReports) - K1, K3 (data licensing COGS classification + archive treatment) - L1 (pre-formation expense convention — blocks bookkeeping going forward) - M1 (GitHub Team plan — same pre-formation convention as §L; apply in same conversation) - P1 (§1256 PA treatment — affects how we label §1256 tags in the product) - P3 (wash-sale basis adjustment display mechanics — affects lot UI)

Must answer before Founders Pro launches: - J1 (COGS treatment) - J2 (revenue recognition) - J3 (at-cost vs. below-cost accounting) - J4 (PA + CA sales-tax nexus on SaaS)

Must answer before first non-US subscriber is accepted: - N1 (VAT/GST per market — registration thresholds) - N5 (payment processor MoR option — may eliminate most of N1–N4) - N4 (Canada GST/HST + Quebec QST — parallel to attorney's L1 Quebec question)

Would be valuable: - Q1 (personal guarantee + PA veil-piercing — before signing any business card with PG) - Q3 (charge card vs. revolving — bookkeeper convention for Mercury IO daily debit) - Q4 (cashback as rebate vs. income — bookkeeper + return treatment) - E1, E2 (payroll provider + state accounts) - P4 (1099-B as data-accuracy safe harbor) - F1, F2 (estimates + safe harbor) - G1 (health insurance structuring) - H1 (home-state SaaS sales tax) - J5 (home-office + infra cost interaction) - K2, K4 (flat-rate cost treatment; break-even narrative impact) - L2 (lifetime license de minimis safe harbor) - N2 (EU OSS registration — evaluate alongside N1)

Can defer to follow-up: - Q2 (business credit file strategy — when does it matter practically) - Q5 (Ramp vs. Mercury IO — at what revenue/spend level does Ramp make sense) - B3, B4 (thresholds + reasons not to) - C2, C3 (late-election relief, state conformance) - D3, D4 (salary increase cadence, written resolution) - E3 (workers' comp) - F3 (state estimates) - G2, G3, G4 (retirement, home office, Augusta) - H2, H3 (sales-tax tools, nexus monitoring) - I1, I2, I3 (chart of accounts, feeds, basis) - K1–K3 (logistics) - L3 (sales tax jurisdiction question — small dollar, low urgency) - M2 (DBA commencement date + Schedule C business name) - N3 (PE risk — defer until non-US expansion is actively planned) - N6 (transfer pricing — defer until international entity is contemplated) - N7 (Brazil withholding tax — defer unless Brazilian users accepted) - P2 (PA loss-carryforward disclosure — defer until TLH feature is scoped) - P5 (Notice 2025-7 / lot-display as books-and-records — defer until SLID feature is scoped)

This document is preparation material only. The CPA's answers — not this document — are the actionable output.