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The LedgerIt blog

Startup accounting,worked out to the dollar.

Accounting for B2B SaaS startups, written for founders who would rather be building. Revenue, runway, taxes and the close, one topic at a time, each with a worked example and its source.

Tax
2025
$0
2026
$800
2027
$800

Minimum tax for a startup that registered in California in 2025

FeaturedTax7 min read

California franchise tax: the $800 minimum for startups

A Delaware startup that registers or does business in California owes at least $800 a year, due April 15. The first year is free only if you register.

  1. Revenue
    From $7,200 to $200

    January's commission expense, spread over a 36-month contract

    Revenue6 min read

    ASC 340-40: how to capitalize sales commissions

    ASC 340-40 capitalizes the costs you pay only because a contract was signed, like commissions, and spreads them over the contract. A worked $7,200 example.

  2. Revenue
    invoiced on January 1
    $42,000
    revenue in January
    $7,000

    One SaaS contract, recognized the way ASC 606 requires

    Revenue9 min read

    ASC 606: the five steps of revenue recognition for SaaS

    ASC 606 recognizes revenue as you deliver what the customer paid for, not when cash arrives. The five steps, worked through one $42,000 SaaS contract.

  3. Fundraising

    Did an employee exercise an ISO this year?

    If yes, the company owes a Form 3921 for each exercise

    Fundraising7 min read

    Form 3921: due dates and how to file for ISO exercises

    A company files Form 3921 for every ISO exercise. For 2026 exercises, it is due to employees by February 1, 2027 and to the IRS by March 31, 2027.

  4. Tax
    Form 1120
    April 15
    With Form 7004
    October 15

    When a calendar-year C corporation files its federal return

    Tax7 min read

    Form 1120 due date: April 15, or October 15 with Form 7004

    A calendar-year C corporation files Form 1120 by April 15, or October 15 with a Form 7004 extension. The tax is still due in April, even with no revenue.

  5. Fundraising

    30 days

    to file an 83(b) election after your shares are transferred to you

    Fundraising7 min read

    83(b) election: the 30-day deadline and how to file it

    An 83(b) election is due 30 days after your shares are transferred. How to file Form 15620 online or by mail, and what missing it costs a founder.

  6. The close
    Digits
    vs
    Puzzle

    AI accounting software for startups, compared plan by plan

    The close8 min read

    Digits vs Puzzle: AI accounting software prices and plans

    Digits starts at $65 a month with bill pay and an open API. Puzzle starts at $30 and puts revenue recognition on its $120 Complete plan. Plans and fit.

  7. Tax
    New York
    Taxed in full
    Texas
    Taxed in part
    California
    Not taxed

    Whether SaaS is taxed, in three states with a $500,000 threshold

    Tax7 min read

    SaaS sales tax: nexus thresholds and which states tax it

    SaaS sales tax depends on two tests per state. New York and Texas tax SaaS, California doesn't, and all three set a $500,000 remote seller threshold.

  8. The close
    Pilot
    vs
    Kruze

    Startup bookkeeping firms: prices, plans and who each one takes on

    The close7 min read

    Pilot vs Kruze: startup bookkeeping prices and plans

    Pilot's Core plan starts at $299 a month billed annually; Kruze starts at $650 a month and only takes funded Delaware C-corps. Plans, tax and fit.

  9. Fundraising
    3 years
    50%
    4 years
    75%
    5 years
    100%

    Of the gain excluded, for stock issued after July 4, 2025

    Fundraising8 min read

    QSBS exclusion: 50% at 3 years, 100% at 5 under 2025 law

    For stock issued after July 4, 2025, the QSBS exclusion is 50% of the gain at 3 years, 75% at 4 and 100% at 5, on up to $15,000,000 per company.

  10. Tax
    From $600 to $2,000

    The 1099-NEC threshold for a contractor, from payments made in 2026

    Tax7 min read

    1099-NEC threshold: $2,000 from 2026, due February 1, 2027

    For payments made in 2026, a startup files Form 1099-NEC for each contractor paid $2,000 or more. The forms for 2026 are due February 1, 2027.

  11. The close
    books when money moves
    Cash
    books when it is earned
    Accrual

    Accrual books for investors, the cash method for tax while you qualify

    The close7 min read

    Cash vs accrual accounting: which one a startup should use

    Keep accrual books for investors and GAAP. A C corporation can still use the cash method for tax while average gross receipts stay at or under $31 million.

  12. The close
    Puzzle
    vs
    QuickBooks

    Startup books against the default, priced plan by plan

    The close8 min read

    Puzzle vs QuickBooks: which books should a startup pay for

    Puzzle puts revenue recognition on a $120 a month plan; QuickBooks Online keeps it for Advanced at $340. Prices, plans and who each one suits.

  13. The close
    QuickBooks
    vs
    Sage
    vs
    NetSuite

    Which accounting system fits a startup, and when to move up

    The close9 min read

    QuickBooks vs Sage vs NetSuite: which one fits a startup

    QuickBooks Online fits most seed and Series A startups at $0 to $340 a month. Sage Intacct and NetSuite are quote-only, with 4 to 6 months to set up.

  14. Fundraising

    Is your 409A still valid?

    It holds up to 12 months, less after news that changes what your stock is worth

    Fundraising6 min read

    409A valuation: when your startup needs a new one

    A 409A valuation sets the floor for option strike prices. It holds for up to 12 months, less if a priced round or other news changes what your stock is worth.

  15. Tax

    Is R&D deductible again?

    Yes: US research paid from 2025 is deducted in the year paid, under §174A

    Tax7 min read

    Section 174 changes: R&D is deductible again from 2025

    From 2025, US research and software costs are deductible in the year paid under §174A. What is left of 2022 to 2024 amounts comes off in 2025 or over two years.

  16. Tax

    $500,000

    of research credit a startup can apply to payroll tax each year

    Tax6 min read

    R&D tax credit payroll offset: up to $500,000 a year

    A startup with under $5 million of gross receipts can apply up to $500,000 of its research credit to employer payroll tax, starting the quarter after it files.

  17. Tax
    From $85,165 to $400

    One startup's franchise tax, by the default method and by assumed par value

    Tax8 min read

    Delaware franchise tax: $85,165 or $400, due March 1

    Delaware bills startups by authorized shares, often tens of thousands of dollars. The assumed par value capital method usually cuts it to $400. Due March 1.

  18. Metrics
    ARR on December 31
    $144,000
    revenue for the year
    $115,000

    The same company in the same year, two honest numbers

    Metrics7 min read

    ARR vs revenue: why your two numbers never match

    ARR is a run rate on the day you measure it; revenue is what you earned under GAAP over a period. How they differ, with a worked example and a reconciliation.

  19. Revenue
    in the bank in October
    $24,000
    of revenue each month
    $2,000

    One annual prepay, recognized over twelve months under ASC 606

    Revenue7 min read

    Deferred revenue for SaaS: why cash in isn't revenue

    Annual prepay hits your bank on day one but your P&L over twelve months. How deferred revenue works under ASC 606, with journal entries and a worked example.