I hate to complain and whine, especially on a blog, but taxes really warrants some wholesome bitching. It's amazing how behind the times tax filing is in terms of the whole software and technology front. People who deal with taxes are deep in a system that's been around for longer than some startup founders have been in existence, and the attempts at making taxes cool (online services, e-filing) are still built around the old and busted tax procedures.
It is a tragedy when it comes to taxes for today's growing tech startups that are completely started by technical founders. It's so easy now to create a product with very few employees, and completely possible for tech people to just make something with no overhead, but when it comes to taxes, these startups get screwed.
Joe and I started a side project at some point, and decided to put a LLC around it so that we could start getting payments and roll in the dough without the legal problems. Great! We're both engineers who count by typing out for loops and += characters, so we decided to spend over $3000 to allow LegalZoom to handle all our legal things and to pay for the ridiculous minimum $800 tax fee (twice within a year, which still boggles my mind). But the problem is, they don't file taxes for you when it comes time. So here it is, the most horrible time of the year. Not because we owe taxes, not because money is tight, it's because we have no time to read the millions of pages of documents that describe how you can be eligible to be a dependent, or get military status, disability status, or are grieving for something.
Can I just type in my LLC name and have it tell me what information it needs? Hit submit? Put my paypal credentials in and be done with it? I have my paperwork, all those weird EIF, FEIF, SSO, SOS numbers and paperwork, but what and where does this all go?
A few lessons I've learned so far in this desolate demise of death:
- Don't get a freakin LLC until you make more than $1600 a year
- If you decide to stop working on anything, kill your LLC or else you'll have to pay $800 the moment January 1st rolls around and you're still LLC'd up.
- Don't do a multiple member LLC, it does you no good, and you have to file a crapload more documents because of it
- Don't ever even think you can figure out which forms you need to fill out. And when you think you've figured out the right form to fill out, it asks you to submit 3 more.
- TurboTax is crap, it doesn't work on a Mac, it charges you $150 to download a Windows only version. Unless you have anything less than a multi-member LLC, it's Windows only.
Am I the only engineer that has started a startup without a business person / cpa to help me along? Taxes are such a big barrier for a company to get started and keep going. It's a complete farce to startup mentality.
First photo is loosely related. Took a picture of a foosball table at a cabin we rented in Lake Tahoe. Taxes are like the bars impaling soccer players horizontally while they're trying to play the game. ;) I really hope I can figure out these taxes soon so I can stop stressing over them.
