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

It is used to request a change in accounting method with the IRS. The most common reason is switching from cash to accrual, but it also covers depreciation changes, revenue timing adjustments, and catching up on missed deductions from prior years.

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.

C corporations conducting business in Delaware must pay an annual fee known as the Delaware state franchise tax, a privilege fee for operating within the state's jurisdiction.

May 31 or June 30, 2023, for eFiling.

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.

Filed with US Treasury within 45 days of stock issuance when a foreign person acquires a US business.

No. Once access is shared, payroll reports come through each cycle. The review happens at financial closing, alongside your other accounts.

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.

Generally, foreign real estate isn't reported on an FBAR except when held through a foreign financial account like a foreign bank account, where exceptions may apply.

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

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.

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.

We offer post-incorporation maintenance services, including compliance tracking, bookkeeping assistance, and tax filing support for US entities. Inkle doesn't maintain Indian entities, but we'll connect you to partners that do.

Yes. If you missed depreciation in prior years on property you still own, Form 3115 lets you claim the full catch-up in the current year rather than amending each prior return.

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

Take the guesswork out and see the numbers for yourself.

Inkle has partnered with dozens of companies to bring founders the best of the startup ecosystem, including perks from platforms like Stripe, Notion, Mercury, Brex, Gusto, Carta and more - helping you build your startup stack at cost-efficient rates.

Check out our long list of partners and perks on our perks page - https://www.inkle.ai/perks

You can seek assistance from tax professionals, use tax software like Inkle, or refer to the IRS website for guidance and resources on completing Form 8995 and understanding the QBID.

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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.

No.

Form 5471 is filed by U.S. taxpayers, while Form 5472 is for foreign corporations in U.S. business or U.S. corporations with 25% foreign ownership.

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

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

Partners receive earnings on a monthly basis.

It's best to do a tax consultation with our certified professional tax experts who can help you determine the answer.

As a general rule of thumb: if you don't have a formal physical office, permanent employees in attendance, stock or inventory and business operations, then you won't need to file a State return. This is even if your US company address is located in that state. Basically: it depends on what you're doing in the state.

You may need one, the other, or both. FBAR is filed with the Financial Crimes Enforcement Network (and is based on calendar year), whereas Form 8938 goes to the IRS as part of your federal tax filing (and is based on your chosen tax year). FBAR is judged based on foreign balances controlled by your US entity's foreign accounts or its controlled entities foreign accounts, whereas Form 8938 is judged based on a threshold of specified passive income. See here for more details: https://www.irs.gov/businesses/comparison-of-form-8938-and-fbar-requirements

Yes Inkle has already partnered with dozens of Indian CA/CS firms to help them help their clients with US+India incorporations. Inkle does not offer India entity maintenance services.

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.

Automatic Stripe revenue sync is part of the Books Standard Plan. (See note below, this needs sign-off.)

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

Inkle Raise is not an 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.

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.

If you have a Delaware C-Corp which was in existence during any calendar tax year (1st January to 31st December), then yes you must file the Annual Report and pay the Delaware Franchise Tax. This is going to cost you a minimum of $400 tax + $50 government filing fee, and possibly much more if you've raised in the millions.

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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You can find Form 2553 and its instructions on the official IRS website. Additionally, tax professionals and software can guide you in completing the form.

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

Nothing. Inkle is free for you. Your end customers will pay Inkle and Stripe the normal rack rates. You can charge your customers whatever fees you wish. Alternatively, you can add your fees on top and quote a combined fee to your customers.

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.

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

Failure to pay the Delaware Franchise Tax and file the Annual Report for two consecutive years can result in the State of Delaware automatically dissolving the corporation.

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

Transactions stream in automatically once the connection is live, so your expense ledger stays current between closes rather than catching up at month-end. If you run a distributed team spending on Brex cards, reconciling weekly rather than monthly tends to surface anomalies faster.

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

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.

You are eligible to pitch once every six months.

Electing S corporation status can offer tax advantages, including pass-through taxation and avoiding double taxation on corporate income.

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.

Gusto debits your operating account for each run. The payroll report records the components, the bank transaction records the cash leaving, and reconciliation ties them together. Reconcile your operating account first, since payroll, cards, and processors all feed into it.

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

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

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.

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.

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.

Generally this is the bulk of software development expense, which is often in the form of software engineer salaries. However, you can exclude the time they spend on maintenance (such as support and bug fixes).

Yes, a 409A valuation can and should be updated if there are material changes in your company's financial situation or other significant events.

Some exceptions and rules may apply, especially for entities like trusts and tax-exempt organisations. Consult Inkle today for entity-specific guidance.

Yes, there are income limits and phase-out ranges for claiming the QBID. The limits can vary based on filing status and taxable income.

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.

Yes, Inkle Books supports accrual accounting. The platform allows you to record revenues and expenses when they are incurred, rather than when cash is exchanged. This helps in tracking accounts receivable and payable, and in generating accurate financial statements that reflect your company’s financial position and performance over time.

C Corporations must file Form 7004 by the original due date of Form 1120 — the 15th day of the 4th month after the end of the tax year.For companies following the calendar tax year, this is typically April 15 (or the next business day if it falls on a weekend or holiday).

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.

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.

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

Yes. You authorise on the bank's own login screen, so Inkle never sees or stores your credentials, and the connection is read-only. We can read transactions into your books but cannot move money. Revoke access from Data Sources whenever you want.

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.

Stripe accounts typically carry the highest transaction volume in a startup's books, which makes Smart Reconcile (AI) the right choice: Inkle matches your books against the statement automatically and flags discrepancies for you to resolve. The guided manual flow is there if you prefer it, and a licensed CPA is available in-app if a line won't tie out.

We offer post-incorporation maintenance services, including compliance tracking, bookkeeping assistance, and tax filing support for US entities. Inkle doesn't maintain Indian entities, but we'll connect you to partners that do.

Transactions come through with their currency, which matters for startups running India-US operations where money moves between entities. Cross-border flows have tax and transfer pricing implications, so having them recorded properly from the start makes filing season considerably easier.

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.

Limited liability companies (LLCs) that have chosen corporate taxation. Partnership LLCs file Form 1065, while single-member LLCs typically report taxes through the owner’s personal return.

Specific criteria must be met, such as having a valid business structure (typically a domestic corporation), a particular number of shareholders, and meeting other requirements.

Yes, and most startups should. They answer different questions: HubSpot tells your books what you're owed, Stripe tells them what you collected. Together they give you a complete AR picture from close through to cash.

Foreign corporations conducting business in California must file Form 100 if they earn income from sources within the state.

We provide an option to delete customer data upon request and will ensure that the data is erased within a set timeframe.

Yes. Checking, savings, and sub-accounts all sync, and each appears separately on the Reconciliations dashboard with its own reconciliation status. If you use sub-accounts to ring-fence runway or reserves, that structure carries through to your books.

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.

Inkle's panel vets each startup on primary factors which all investors look for, such as team, market size, macro themes, product, disruption, progress. We do not conduct any due diligence or recommend investments. Investors do this themselves.

Yes. Manually added accounts work the same way once you upload statements, which is what most founders use when backfilling prior periods after migrating from QuickBooks, Xero, Pilot, or Puzzle.

Non-USD charges arrive with the original amount, currency code, and conversion rate, so your books show both what was charged and what it cost in dollars.

The IRS requires businesses to file certain information returns electronically if they meet a minimum filing threshold.

Under current regulations, if your business files 10 or more information returns in total during a calendar year, you must submit them electronically. This is a significant reduction from the previous threshold of 250 returns.The requirement applies across multiple return types, including forms such as 1099s and W-2s, and businesses must aggregate all return types to determine if they meet the threshold. For example, if you file 2 W-2s and 8 Form 1099s, you are required to file all of them electronically since the total equals 10.

This mandate applies to most businesses, with limited exceptions, and affects how companies manage and submit their tax filings, especially those working with independent contractors.Failure to comply with the electronic filing requirement may result in IRS penalties for each return filed incorrectly.

You enter your bank credentials inside Plaid's own flow, so Inkle never sees or stores them. What reaches your books is read-only account and transaction data. Plaid cannot move money on your behalf and neither can Inkle, and you can revoke the connection from Data Sources whenever you want.

US VCs and angels often don't get India-based dealflow without feet on the ground, and because India founders don't reach out to you. Inkle Raise fills that gap, providing a liquid platform for receiving vetted and curated pitches from quality early stage teams that you probably haven't heard of before.

If a business fails to electronically file information returns such as Forms W-2 or 1099 when required, the IRS may impose penalties under IRC Section 6721. These penalties apply to returns that are not filed electronically, filed late, or contain incorrect information.

Penalty amounts can be charged per return and may increase based on how late the filing is. At higher tiers, penalties can reach hundreds of dollars per return, with annual maximum limits that vary based on business size. Smaller businesses are subject to lower annual caps.The exact penalty amounts are adjusted periodically, so the total liability depends on when the return is filed and the size of the business.

In some cases, businesses may qualify for a hardship waiver if they can demonstrate significant difficulty in meeting the electronic filing requirement.

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

Because it shouldn't. Stripe deducts processing fees before paying out, and batches charges into payouts on a delay, so a $1,000 day in Stripe might arrive as $971 two days later. Recording only the deposit understates both your revenue and your expenses. Inkle Books records the charge gross, the fee as an expense, and matches the payout to the charges behind it, which is what accrual accounting requires and what investors expect to see.

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

• 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).

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.

Most C-Corps in the US follow a calendar tax year, so yes, you should file Form 7004 by April 15 to get an automatic 6-month extension to October 15. Note that this only extends your filing deadline, not your payment deadline. Any taxes owed are still due by April 15.

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.

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 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.

Click on the "Get My Referral Link" button. You will be redirected to the Inkle app, where you will be able to copy your referral link & share it with your community.

Inkle receives payroll reports for bookkeeping, not employee records. We cannot run payroll, change compensation, or add or remove people from your team.

Vendor records sync across, and the financial closing checklist prompts you to review new vendors added during the period, including checking for duplicates. If the same vendor exists under slightly different names in each system, that's where you'll catch it.

Because your CRM knows about revenue before your bank does. A deal closes, an invoice goes out, and payment arrives some number of weeks later. Accrual accounting recognises that revenue at the close, not the payment. Connecting HubSpot means your receivables reflect your actual pipeline rather than a manually maintained list that's always slightly out of date.

Form 8995 is used to calculate and claim the Qualified Business Income Deduction (QBID) for individuals, estates, and trusts.

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.

A Transfer Pricing Benchmarking Study is conducted to determine the margin rate for transactions between the related parties. It is required annually from the second year of starting such transactions. A Transfer Pricing Audit (Form 3CEB) is a mandatory annual report that companies engaging in Transfer Pricing must file with the Indian tax authorities. Inkle can help you with both of these processes through our network of empaneled CA firms.

C corporations use Form 926 to report property transfers to foreign corporations.