Tax laws and forms can change from year to year. It's essential to check the latest IRS instructions and publications for any updates to Form 8995.

Inkle is Stripe's India Crossborder Compliance Partner for the purpose of helping Indian resident founders use Stripe's Atlas product. We give end-to-end guidance and help smoothen the process. Stripe Atlas is actually a self-serve product, so you don't need Inkle, but we're always here to help.

Form 8938 includes various foreign financial assets like bank accounts, investments, foreign entity ownership, etc. For a complete list of reportable assets, refer to IRS instructions.

You can get Form 1099 from the IRS website, request it from the IRS, or use tax software like Inkle for assistance.

Yes. Inkle has built Inkle Practice specifically for non-US CA/CS and law firms to access the platform and collaborate with our shared customers.

The QBID is a tax deduction that allows taxpayers to deduct a portion of their qualified business income from eligible businesses, potentially reducing their taxable income.

Yes if your US corporation had a foreign subsidiary at any time during the concerned tax year.

Companies exporting goods or services from India need to furnish a Letter of Undertaking (LUT) on the GST portal. This allows them to make these exports without paying IGST upfront.  It is recommended to include the LUT Application Reference Number (ARN) on the Transfer Pricing invoice.

Here's a sample Invoice: drive.google.com/file/d/1sHgIx7AwswLQkUYnAaiGudN7ZMCh4XSi/view?usp=sharing

A beneficial owner is an individual who either directly or indirectly:

1. Owns or controls at least 25% of the reporting company’s ownership interests.
2. Exercises substantial control over the reporting company.

An individual is considered to exercise substantial control over a reporting company if they:

• Hold a senior officer position (e.g., president, CFO, general counsel).
• Possess the authority to appoint or remove specific officers or a majority of directors.
• Serve as an important decision-maker for the company.
• Exercise any other form of substantial control over the reporting company.

Our team will assist you every step of the way. Before we kickstart your incorporation process with Inkle, please prepare the following information:

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• Brand Name: what will your brand name be? It's perfectly fine (and normal) for this to be completely different to your various entity names. Check that there is no US/India trademark violation or similar-named entities.
• Entity name/s: decide on the entity names (follow the specific regulatory requirements).

Individuals employ Form 1040 to file personal income taxes, whereas C corporations utilise Form 1120 for corporate tax returns. The primary distinction lies in the taxpayer type: 1040 is for individuals, and 1120 is for corporations.

Nil return means your US Corporation has no transactions in the concerned tax year.

Companies for IRS compliance and impartiality often prefer external appraisals, as independent experts ensure accurate evaluation of complex factors. This results in well-supported reports, reducing inaccuracies and conflicts with tax authorities.

No, Form 2553 is typically for corporations. However, some states allow LLCs to elect S corporation status for federal tax purposes.

Individuals who expect to owe a certain amount of tax and don't have it withheld through their paychecks or other sources are generally required to file Form 1040-ES.

Yes, S corporations have restrictions on the types of shareholders they can have. Certain entities, such as other corporations, partnerships, and non-resident aliens, are generally not eligible shareholders.

All reporting companies should include the following information in the Beneficial Ownership Information report -

Reporting Company Details:

1. Legal name
2. Trade names
3. Current U.S. business address
4. Jurisdiction of Formation
5. Taxpayer Identification Number (TIN) or foreign-issued tax identification number and issuing jurisdiction.

Beneficial Owner Details:For each beneficial owner, the reporting company must provide:

1. Name
2. Date of birth
3. Residential address
4. Identifying numbers from an acceptable ID document (e.g., passport or U.S. driver's license) and the issuing state or jurisdiction. (Include a copy of the identification document used for obtaining the identifying number).

Company Applicant Details:Only applicable for companies incorporated on or after 1st Jan 2024. For each company applicant, the reporting company must provide:

1. Name
2. Date of birth
3. Address
4. Identifying numbers from an acceptable ID document (e.g., passport or U.S. driver's license) and the issuing state or jurisdiction. (Include a copy of the identification document used for obtaining the identifying number).

We ensure that data is backed up across multiple locations and can be retrieved within our recovery time objective if a failure does occur.

Additionally, we have a tested and detailed business continuity and disaster recovery plan in the event of a major disruption to one of our key service providers.

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The updated IRS electronic filing mandate has significant implications for businesses employing independent contractors. While many companies are accustomed to electronically filing W-2 forms, the inclusion of 1099-NEC forms, typically used for freelancers and 1099 workers, into this process is a new requirement. Businesses with many independent contractors must now develop standardized procedures for filing 1099-NEC forms to maintain organized records, including tax verifications and invoices, for smooth filing at year-end.

The change from a 250-return threshold to just ten is considerable, affecting many businesses that previously relied on manual filing methods.

This oversight can lead to compliance risks and unregulated spending. With the new mandate, it becomes crucial for businesses working with independent contractors to maintain a comprehensive overview of all 1099-NEC forms required for end-of-year filing.

To adapt, companies may need to assign specific roles, possibly within human resources, to manage independent contractor engagements. This would ensure consistent onboarding and payment processes across the organization, facilitating accurate reporting at the end of the year.

Additionally, implementing automated and centralized systems could significantly reduce administrative workload and the likelihood of manual errors.

We appreciate your help in reporting bugs and have a vulnerability reporting system set up as documented here. Please reach out to security@inkle.ai to report a bug.

Stripe for US entity formation.

Inkle for India entity formation.

Stripe Atlas handles the US entity incorporation (Inkle can give guidance, although Atlas is actually a self-serve platform). Inkle handles the India entities formation through our network of partner CA/CS firms in India.

Regardless of taxable income, every US-based domestic corporation must file tax Form 1120. 

The following entities fall under the obligation to file tax Form 1120:

1. Businesses opting for corporate taxation. These businesses must also complete Form 8832 and include a copy of Form 1120.
2. Limited liability companies (LLCs). LLCs file Form 1120 only if they've chosen corporate taxation. Partnership LLCs use Form 1065, while single-member LLCs typically file taxes through the owner's personal federal tax return.
3. Farming corporations. They are required to file Form 1120 to report their income/losses.
4. Corporations with an ownership interest in a FASIT (Financial Asset Securitization Investment Trust).
5. Foreign-owned domestic disregarded entities. If a foreign entity owns 100 percent of a domestic disregarded entity (D.E.), the D.E. is treated as separate from its foreign owner. The foreign entity must file Form 1120 and attach Form 5472.

Additionally, some types of corporations may need to complete additional forms, such as Form 1120 (Schedule N), for foreign operations in the U.S. Small corporations might not be required to fill out these additional forms. You can locate them by searching for "Form 1120" using the IRS Forms and Publications tool.

Inkle Books allows you to track payroll by integrating with payroll services or manually entering payroll data. If you use a payroll service, connect it through available integrations to automatically sync payroll information. For manual entry, record payroll expenses under the appropriate categories, ensuring accurate tracking of wages, taxes, and other deductions. You can also use Inkle Books’ reporting features to generate payroll summaries and review compensation costs.

We invite high-quality, active investors of various kinds, including VCs, angels, scouts and syndicates.

Delaware is tax-friendly due to no sales tax, business-friendly tax laws, and favourable corporate income tax rates.

Suppose you fail to file a 7004 tax extension or tax return within the appropriate deadline (March 15, 2023, for S-corporations and partnerships and April 18, 2023, for corporations and other businesses). In that case, the IRS will charge interest and penalties on any unpaid Federal taxes.

If you do not file and owe taxes, the failure-to-file penalty is 5% per month (up to 5 months) of the amount due. If your return is over 60 days late, you may be subject to a $135 minimum penalty. The IRS will also impose a failure-to-pay penalty of 0.5% per month (up to 25%) of the amount due if you file a return or extension but don’t pay all your taxes on time.

The Internal Revenue Service (IRS) has introduced a significant update to its electronic filing requirements, effective for the 2023 tax year and onwards (to be filed in 2024). This new mandate stipulates that businesses filing ten or more information returns within a calendar year are obliged to submit these returns electronically. This marks a substantial change from the previous regulation, which set the electronic filing requirement at over 250 annual information returns.

Issued in February 2023, the updated IRS regulations encompass various information return types, including forms such as 1099s and W-2s. Under this new rule, businesses are required to aggregate the total number of all return types to determine if they meet or exceed the ten-return threshold. For instance, a company that needs to file two Form W-2s and eight Form 1099-NECs would have to file all of these returns electronically, as the combined total crosses the ten-return limit.

The mandate is quite inclusive, with few exceptions. It applies to almost all returns if their cumulative number exceeds ten. This regulation significantly impacts how businesses manage and file their information returns, especially those dealing with independent contractors' payments.

If you don’t have a Mercury or Brex account, you can still connect your bank account to Inkle Books using Plaid, a secure financial data aggregator. Simply navigate to the “Data Sources” section in Inkle Books, select “Connect,” and click on “Other banking institutions” in the connect modal. Follow the prompts to connect your bank via Plaid.

Plaid supports over 12,000 US financial institutions, so you should be able to link your bank account without issues.

You must still file a Form 1040 tax return to reconcile your estimated tax payments with your actual tax liability.

If you overpay your estimated taxes, you can apply the overpayment as a credit toward your next year's estimated taxes or request a refund when you file your tax return.

The IRS grants tax-exempt status to specific organisations, such as:

1. Charitable organisations
2. Social welfare organisations
3. Social clubs
4. Trade associations
5. Labor organisations
6. Veterans' organisations
7. Political organisations

The IRS maintains a comprehensive list of tax-exempt organisations, available here. These organisations are required to submit an information return, which may include Form 990, Form 990-EZ, and Form 990-PF.

Yes, both Form 8938 and FBAR might be necessary since they serve different purposes and have separate reporting thresholds. While FBAR has its requirements, Form 8938 is part of your annual tax return and may need to be filed, even if you're already submitting FBAR.

We enforce stringent password security policies and MFA (Multi-factor Authentication) based access for all our employees via a central active directory. We strictly monitor access to customer data and only permit it on an as-needed basis.

Indian FEMA residents may not directly hold control-level stock in any foreign corporation if that foreign corporation is going to have a step-down subsidiary anywhere in the world. The founders must hold their foreign stock through a personal Indian LLP (Limited Liability Partnership) or RP (Registered Partnership) vehicle in India. Think of this LLP or RP as the "personal family office" of each founder. So each LLP/RP would contain only the founder and her/his family member, not any other co-founder.

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To elect S corporation status for a tax year, Form 2553 generally must be filed two months and 15 days after the beginning of that tax year.

Inkle is ideal for:

• Early stage to growth stage startup founders looking to streamline their finances.
• Businesses that need to stay compliant with tax regulations.
• Small and Medium-sized Businesses (SMBs) needing real-time financial insights.

Yes, you can electronically file through the FIRE system, often extending the deadline to March 31. Many tax software providers and e-filing services offer this option.

Foreign Inwards Remittance Advice (FIRA) is a document used in the Indian cross-border payments context. It is used as proof of a foreign currency conversion to Indian Rupees. FIRA is required to claim a GST refund for services or goods exported from India. We provide you with a free FIRA on your dashboard for every transfer, simplifying the process for you.

Missing a payment deadline can result in penalties and interest charges, so making timely payments is essential. Late payments may also affect your ability to request an extension.

It's good practice (but not mandatory with Inkle).

In our experience, many founders tend to just "leave it to the deadline" - and then rush or miss the deadline. And they have little visibility into their books at any given time.

If you come to us days before the deadline, it's really tough for us to catch up your books if you have lots of transactions and missing invoices. And almost impossible to use Accrual method. So we'll be forced to used Cash method accounting, which isn't ideal for you.

Many US tax filing services compel you to pay a high monthly bookkeeping charge of more than $500/month and subscribe to Quickbooks, even if you have low activity at the start. We have fair pricing and nudge you for monthly bookkeeping because it's better for you, and it will cost you about half of the total monthly cost over 12 months in terms of annual cleanup anyway. Why not have monthly visibility instead.

Bookkeeping fees are usually monthly, based on volume, accounts, and complexity.
For small to mid-sized businesses, pricing ranges from a few hundred to a few thousand dollars per month.
Compare not just cost, but the value of accuracy, visibility, and peace of mind.

Providing false information or failing to report/update beneficial ownership may lead to penalties. Civil fines are $500 per day, and criminal penalties include fines up to $10,000.

If a report with inaccurate information is filed without the reporting company's knowledge, there's a 90-day safe harbor to submit a corrected report.

No. It's free.

If you have paid a US resident contractor or an LLC as a contractual payment or rent, during the Concerned Tax Year, then yes you must file a Form 1099 by 31st January of the following year annually. One filing per person/LLC. If you've missed the deadline, discuss with us how to proceed.

Due to the high volume of submissions, we regretfully cannot offer personalised feedback on individual pitch submissions. Nevertheless, you can enhance your pitch or prepare for future submissions by participating in our expert sessions or exploring our published content on our blog.

The Delaware Franchise Tax Calculator is a tool designed to help businesses estimate their franchise tax obligations to the state of Delaware. It typically works by inputting relevant financial information, such as the number of authorised shares and gross assets, and then calculating the expected tax amount based on Delaware's franchise tax regulations.

Corporations must provide detailed financial data, including gross receipts, deductions, credits, and other pertinent details essential for calculating net income and tax liability.

Yes, you may still be able to claim the QBID even if you have W-2 wage income, but some limitations and calculations take W-2 wages into account.

You should adjust your estimated tax payments to reflect the change in income. You can recalculate your estimated tax and make larger or smaller payments as necessary.

• Entity formation (Delaware C-Corp)
• EIN application (Employer Identification Number)
• Bank account setup
• Registered agent services
• Founder stock issuance
• Lifetime documentation & compliance support

You earn rewards by sharing your referral link. When a friend signs up using your link and completes their first service, both you and your friend will receive $100 worth of Inkle Credits or an Amazon Gift Voucher.

You can make electronic payments for Form 1040-ES through the IRS's Electronic Federal Tax Payment System (EFTPS) or by credit/debit card.

Inkle Books prioritizes the security of your financial information with robust measures. The platform uses encryption to protect data both in transit and at rest. Additionally, Inkle Books complies with industry-standard security protocols and offers multi-factor authentication (MFA) for added security. Regular security audits and updates ensure that your financial information remains safe from unauthorized access.

If you primarily work with US-based companies that can benefit from Inkle’s accounting and tax solutions, we’d love to have you on board.

For your 2022 tax year and beyond, your taxable income might increase, possibly leading to due taxes even if you think you were loss making.

Inkle Books offers a variety of financial reports to help you manage and analyze your business finances. These include:

• Income Statements: Show your company’s revenues, expenses, and profits over a period.
• Balance Sheets: Provide a snapshot of your assets, liabilities, and equity at a specific point in time.
• Cash Flow Statements: Track cash inflows and outflows, helping you understand your liquidity.

No fees to participate.

S corporations are pass-through entities, meaning profits and losses are passed to shareholders, who report them on their tax returns. Understanding these tax implications is essential.

BE-12 is a survey conducted by the Bureau of Economic Analysis every five years to collect data on foreign investment in the US. US businesses with foreign ownership or control must participate.

Form 5472 is needed for specific reportable transactions, not all foreign-related ones. Consult IRS guidelines or Inkle to determine what to report.

May 31 or June 30, 2023, for eFiling.

You can revoke the S corporation election under certain circumstances, but it typically requires shareholder consent and IRS approval.

Yes, IRS permits electronic filing using the Electronic Tax Administration system, offering convenience and extended deadlines.

For more information or if you have further questions about the program, you can reach out to the Inkle support team through Chat within the platform.

Partners receive earnings on a monthly basis.

Yes, based on the complexity of a corporation's finances, additional schedules like Schedule R, Schedule K, and others might be required with Form 100.

No. There will be no government fee for submitting your beneficial ownership information report to FinCEN.

These include ongoing compliance support, charter amendments, NDAs, foreign qualifications, and more, ensuring your business remains in good standing.

We open a Virtual Account with JP Morgan Chase for your Indian entity. You need to make a domestic wire from US Bank A/C to this Virtual Account, and then funds are credited in INR in Indian Bank A/C after currency conversion. Funds do not touch Inkle anywhere.

Instead of a full deduction of the R&D expenses upfront in the year it was incurred, you'll now have to spread (amortize) them over 5 years (US R&D) or 15 years (foreign R&D).

Inkle offers a flat fee revenue-sharing model based on the volume of referrals and the services your clients use. Apply to learn more about your earning potential.

Yes! India-resident founders should use the other tab to incorporate their US entity.

No, the batch deadlines are only for founders. Investors will stay in out database and receive all batches.

No, our assisted service eliminates the need for expensive legal consultations. However, if you need legal advice, Clerky offers an optional attorney collaboration portal.

Inkle Raise is not a accelerator, incubator or investor. We provide warm introductions, events and tools for free to the community of founders who apply. Many of these founders will hopefully elect to do business with Inkle.

Required if US corporation did any reportable transactions at any time during tax year AND has any 25%+ foreign shareholder. See here https://www.irs.gov/instructions/i5472

Rewards are processed once your friend completes their first service with Inkle. Payments are typically processed monthly.

Form 1040-ES estimates and pays your federal income taxes if you are not subject to withholding, such as self-employed individuals or those with significant additional income.

C Corporations must file Form 7004 on or before the original deadline of their tax return Form 1120, which is by the 15th day of the 4th month after the taxable year ends.

The deadline for C-Corporations following the calendar tax year is April 18, 2023.

Detailed reporting on foreign corporation ownership, finances, operations, including key data, related-party transactions, and essential info.

Indian CA/CS/law firms can direct their customers to this page, or handle the process for them end-to-end. We will need certain documents/details from the founders, which can be routed through you.

You can manage simple books yourself using software, especially in early stages.
But once transactions grow or accuracy matters, outsourcing saves time and prevents costly errors before tax season.

Your chosen tax year dates are normally Jan-Dec unless you specific asked for it to be something else in your EIN application (SS-4). - for example Apr-Mar is common for those with Indian subsidiaries to match the underlying India tax year. You can check your chosen US dates in your SS-4 (field 12)or your EIN issuance letter (paragraph 3). Depending on your chosen tax year dates, and only if you want a 6-month extension to your corporate tax deadline, you will need to file the Form 7004 either by 15th April (if your tax year is Jan-Dec) or 15th Jul (if your tax year is Mar-Apr). This buys you a 6 month breather.

US-as-a-parent: LLPs take about a month to create (formation, getting a bank account, starting the ODI process). Then the paperwork for the US parent takes just minutes to handle. Subsequently setting up a wholly owned subsidiary in India (a private limited company) takes about another month or so.

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US-as-a-subsidiary: setting up a India Private Limited (Pvt Ltd) company takes a few weeks to do fully. The US subsidiary just takes a few minutes. Wiring the ODI payment from the Indian parent to US subsidiary takes a week or two more.

While the Delaware Franchise Tax Calculator can offer a reasonable estimate of your tax obligations, it's essential to remember that it may only account for some possible scenarios or nuances in Delaware's tax laws. For precise tax estimates, especially for complex business structures, it's advisable to consult with a tax professional familiar with Delaware tax regulations.

Some specific exceptions and exemptions exist for certain types of transactions and entities. For example, certain de minimis transactions may be exempt from reporting.

In 2022, all companies that have foreign ownership or interests exceeding 10% at the end of the year are required to submit BE-12. This requirement applies to e-commerce platforms involved in digital product distribution as well as partnerships that hold real estate for non-personal purposes.

The Delaware Franchise Tax is an annual tax imposed on businesses incorporated in Delaware or have a presence there. It is not a tax on income but on the privilege of conducting business in Delaware.

Form 1040-ES payments are typically due quarterly, with due dates in April, June, September, and January of the following year. The exact dates may vary each year.

Inkle strongly recommends Accrual Method (over Cash Method,) because:

- it's gives a much truer picture of your finances.

- prevents you from getting any nasty surprises.- it is easier for forecasting.

- it is GAAP-standard, and most VCs will ask for it.

- you will eventually have to do Accrual Method anyway after you cross $25mm in revenue (by law) or sooner, so why not start with it.

- the IRS does not permit you to switch to Accrual (from Cash) in the middle of a year.

- restating and translating prior years' Cash books into Accrual method would be a nightmare, if you want to compare later.

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Cash Method is possibly OK if you have very little activity, or just started out or have no real revenue operations in US, but consult us for a discussion on this.

Because Accrual Method is more complex, we can only offer this to monthly customers. Trying to do Accrual Method once per year would just be too difficult for you and us, as we would have to discuss every transaction and invoice.

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Consider your residency status (U.S. or abroad) and the value of foreign financial assets on the last day of the tax year and at any time during the year. If thresholds are exceeded, file Form 8938.

FinCen will issue a penalty of $10,000 fine for intentionally not filing it and $250,000 to $500,000 for reporting incorrect information.

Form 1120 is a crucial tax document utilized by corporations in the United States to disclose their income, gains, losses, deductions, and credits for federal income tax goals. In Delaware, corporations are expected to submit Form 1120 if they are operating within the state or have obtained income from sources within its boundaries.

Form 2553 is the application to elect S corporation status for a business entity with the IRS.

Both are trusted incorporation partners, but they offer different features:

Clerky – Best for founders needing flexibility in share issuance, add-ons like SAFEs and stock plans, and an attorney collaboration portal.

Stripe Atlas – Best for ease of use, fixed share issuance, and perks like cashless founder stock purchase and massive Stripe discounts.

C corporations can electronically file Form 926 through the IRS's Modernized e-File (MeF) system.

You can complete Form 2553 by providing information about your corporation, shareholders, and the S corporation election. The completed form is then submitted to the IRS.

Filing Form 926 is crucial because it allows the IRS to monitor and track investments made by C corporations in foreign entities, ensuring compliance with tax laws.

While the Delaware Franchise Tax Calculator can provide valuable insights into your potential tax liabilities, it may have limitations in accommodating unique business situations or changes in tax laws. Additionally, the calculator's accuracy depends on the inputted data. For comprehensive tax planning, using the calculator as a starting point and seeking professional advice when necessary is recommended.

You are eligible to pitch once every six months.