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.

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)

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)

Would be valuable: - E1, E2 (payroll provider + state accounts) - 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)

Can defer to follow-up: - 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)

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