Auto-categorization may not be working for several reasons:

• Unrecognized Transaction Descriptions: The system might not recognize certain transaction descriptions or vendor names. Ensure your transactions have clear and consistent descriptions.
• Rule Misconfiguration: Review your categorization rules to ensure they are set up correctly and apply to the appropriate transactions.
• Data Sync Issues: Check if there are any issues with data synchronization between your bank accounts and Inkle Books. Ensure all accounts are correctly linked and updated.
• Custom Categories: If you have custom categories or exceptions, ensure these are configured properly within your settings.

If auto-categorization issues persist, consider reaching out to Inkle Books’ support team for further assistance.

You can find Form 1040-ES and its instructions on the official IRS website. Tax professionals and tax software like Inkle can also guide you in completing the form.

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.

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.

We use the Advanced Encryption Standard (AES) algorithm with a key size of 256 bits and with a unique and proper encryption key rotation policy for each customer.

Reporting companies who are obligated to file are:

• Domestic reporting companies include Corporations, LLCs, and other entities created by filing with a U.S. secretary of state or a similar office.
• Foreign reporting companies include entities formed under foreign law registered to do business in the U.S. through filing with a secretary of state or similar office.

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 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.

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

The exempted companies that do not need to file BOI are:

• Big operational companies with over 20 full-time employees in the United States maintain a physical office presence in the US and have filed a federal income tax or information return demonstrating gross receipts or sales exceeding $5 million in the previous year.
• Companies involved in investments, along with advisors for investments and venture capital funds, are officially registered with the Securities and Exchange Commission (SEC).
• Pooled investment vehicles operated or advised by specific financial entities.

Obtain a 409A valuation before issuing your initial common stock options, after completing a round of venture financing, annually or after a significant event, and when approaching an IPO, merger, or acquisition.

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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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.

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.

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.

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

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.

The specific information required may vary depending on the calculator, but typically, you'll need details such as the number of authorised shares, par value of shares, gross assets, and any additional factors relevant to Delaware's franchise tax calculation methods.

In 2021, Congress passed the Corporate Transparency Act to establish a beneficial ownership information reporting requirement. The aim is to enhance transparency and deter individuals with malicious intentions from using shell companies or unclear ownership structures to conceal or profit from illicit gains.

Starting from January 1, 2024, certain U.S. companies must share details about the people who own or manage the company (beneficial owners) with FinCEN (Financial Crimes Enforcement Network). The CTA became law in 2020 as part of the Anti-Money Laundering Act, included in the National Defense Authorization Act for Fiscal Year 2021.

Beneficial ownership information refers to identifying information about theindividuals who directly or indirectly own or control a company.

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

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.

A Delaware C Corporation (C Corp) is a type of business entity formed under the laws of Delaware and is taxed separately from its owners. A C Corp is considered a separate legal entity from its shareholders, meaning it can enter into contracts, own assets, and conduct business in its name.

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

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.

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.

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

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.

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

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.

Individuals, estates, and trusts with qualified company income from pass-through entities, like partnerships, S corporations, and sole proprietorships, may be eligible to use Form 8995.

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

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.

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

In such cases, you need to rectify the mistake by amending the form. Utilise Form 1120X, the Amended U.S. Corporation Income Tax Return, for this purpose. Form 1120X must be submitted within three years from the original return.

To complete Form 1120X, you'll need the following information:

1. Business name
2. Explanation of changes
3. Business address
4. Details on payments and credits
5. Data on income and deductions
6. Tax amount due or overpayment
7. Employer Identification Number (EIN)
8. Signature

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).

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.

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

No.

The Inkle Ambassador Program enables partners to earn a flat fee on referred customers. We provide the materials and resources you need to succeed.

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.

Generally, income from eligible businesses, including domestic partnerships, S corporations, sole proprietorships, and certain real estate activities, may qualify for the deduction.

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.

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

Just put your new address on your new Tax Filing, and they'll update their systems. Or see here for other methods: https://www.irs.gov/faqs/irs-procedures/address-changes/address-changes

While bookkeeping focuses on recording financial transactions, accounting involves interpreting, classifying, and reporting those transactions.

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.

No. It's free.

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.

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.

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.

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.

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.

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.

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.

FBAR requires reporting on various foreign financial accounts, including bank and investment accounts, and certain foreign retirement or pension accounts if they meet the reporting threshold.

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.

Various factors influence the cost of bookkeeping services, from business size to required features. Find out about pricing structures, with options ranging from monthly fees to hourly rates with Inkle.

If a business fails to e-file information returns like Forms W-2 and 1099-series when required, it may face penalties as outlined in IRC Section 6721. These penalties can be imposed for not filing electronically and for late filing or submitting returns with incorrect information.

In 2023, the potential penalty can reach up to $310 for each return, with a yearly cap of $3,783,000. However, for smaller businesses with annual gross receipts not exceeding $5 million, the maximum penalty is limited to $1,261,000. These penalty amounts are subject to annual adjustments based on indexing.

Additionally, hardship waivers are available for those who would encounter significant difficulties meeting the e-filing requirements.

You can use the worksheet with Form 1040-ES or online calculators to estimate the amount you should pay. It's typically based on your expected annual income and deductions.

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

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.

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.

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

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

Form 8995 provides a step-by-step calculation process to determine the QBID. It involves determining your qualified business income, limitations, and other factors.

Reporting companies established or registered before January 1, 2024, must file their initial beneficial ownership report by January 1, 2025. For those created or registered on or after January 1, 2024, the deadline is 30 days from receiving notice of their effective creation or registration or from the first public notice by the secretary of state or similar office, whichever comes first.

Take the guesswork out and see the numbers for yourself.

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

Considering a bookkeeping service is an intelligent choice if you're looking to save time and money. Discover how professional bookkeeping can help streamline your finances with Inkle.

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.

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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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

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.

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, the batch deadlines are only for founders. Investors will stay in out database and receive all batches.

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.

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 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.

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).

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.

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.

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.

Reporting companies formed or registered on or after January 1, 2024, are required to report their company applicants. A company may have up to two potential applicants:

1. The person directly filing the document for company creation or registration.
2. If multiple individuals are involved, the person primarily responsible for directing or controlling the filing.

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.

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, there are exceptions based on ownership thresholds and specific circumstances. It's essential to review the IRS guidelines to determine if you meet the criteria for exemption from filing Form 5471.

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.

No, it also includes compliance. You can pre-fix the purpose code and download e-FIRA for free from the dashboard to claim GST exemptions.

High tech early stage product startups with at least one founder or a subsidiary based in India. Even if you are in the pre-product or pre-revenue stage, you are encouraged to apply. We have no restrictions on valuation size and are open to evaluating startups from any business model focusing on building a US or global business. Being an Inkle customer is not a prerequisite for submitting a pitch, but we'd love to help!

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

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.

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.

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

Delaware Franchise Tax Calculators are freely available online. However, it's essential to ensure you're using a reputable and accurate calculator provided by a trusted source, such as the Delaware Division of Corporations or reputable financial websites.

You are eligible to pitch once every six months.

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.

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.

There is a flat 0.25% forex markup fee on live mid-market rates. There are no other hidden fees, such as flat fees or GST deductions. Since we don't charge a flat fee, GST is not applicable.

Accounting software can empower small businesses to manage their own bookkeeping efficiently, thanks to automated operations ensuring accurate financial records. Know more with Inkle.