How much should I expect to pay for a good startup-focused accountant? The quotes I'm getting seem all over the place, from $400 to $3000+ for personal tax prep. Is the higher price worth it?

The price range definitely varies based on complexity and location. If you have multiple equity events, secondary sales, or multi-state filing requirements, expect to be on the higher end of that range. In my experience, paying more for someone with startup expertise has saved me far more than the difference in preparation fees. For context, I paid about $800 for a general CPA my first year, who missed several startup-specific deductions. The next year I paid $2200 for a startup-specialized accountant who saved me over $15,000 through proper equity planning and startup-specific tax strategies. Look at it as an investment - the right accountant should identify tax savings that exceed their fee difference.

Omg please dont. I tried using TurboTax last year for my startup situation and it was a COMPLETE disaster. The software kept getting confused by my 83(b) election and couldn't properly handle the reporting of my partial stock sale. Ended up having to hire a professional anyway to fix all the mistakes and file an amended return. Cost me way more in the end.

Good point about state taxes! This varies significantly by state though. When my daughter was in a similar situation, our state (California) had a much lower filing threshold than federal, so she actually did need to file state taxes even though she was exempt from federal. Definitely worth checking the specific requirements for your state.

Omg thank you for mentioning this - I just checked and he did pay state taxes too! About $120 to our state. I'll make sure we look into the state-specific process for requesting that refund as well. Appreciate you bringing this up, I completely overlooked it.

Was the refund just directly deposited, or did they send a check? And did they pay any interest on the amount since it took so long to process?

That's a great point! Are there any major "cliffs" I should watch out for around the $100k income level? I'm currently putting about 10% into my 401k but wondering if I should increase that to stay under certain thresholds.

Around the $100k level, you might start seeing some phase-outs, but most aren't complete cliffs. Student loan interest deduction starts phasing out at about $75k (single filers) and is completely gone by $90k. The Roth IRA contribution starts phasing out around $125k and is fully eliminated around $140k. Increasing your 401k contribution is almost always a good strategy when you're approaching these thresholds. Not only does it lower your taxable income, but you're also increasing your retirement savings. For 2025, you can contribute up to $23,000 to a 401k if you're under 50, which could significantly reduce your taxable income and potentially keep you under these thresholds.

TurboTax's calculator is decent for basic estimates, but it doesn't always let you see the breakdown of how your income is taxed across different brackets. I found TaxCaster (by Intuit, same company as TurboTax) gives a more detailed view of the marginal rates. The IRS also has a withholding calculator on their website that's pretty accurate but not very user-friendly.

That's a really good point I hadn't considered. If they messed up my COGS on the 1125-A, it definitely would have changed my Schedule C profit and then my self-employment tax on Schedule SE. Should I submit copies of all three forms with my amendment or just the 1125-A?

You should submit the entire amended tax return package, including the corrected 1125-A, Schedule C, Schedule SE, and main 1040 form. This gives the IRS a complete picture of how the corrections flow through your entire return. When preparing your 1040-X, you'll need to show the original figures that were processed, the corrected figures, and the difference between them. Make sure your explanation in Part III clearly traces how the 1125-A errors affected each subsequent form. For example: "The IRS incorrectly transcribed line 2 of Form 1125-A as $8,400 instead of the correct amount of $11,250. This error reduced my Cost of Goods Sold by $2,850, which incorrectly increased my Schedule C profit and subsequently my self-employment tax on Schedule SE." This level of detail helps the IRS follow your calculations and process your amendment more efficiently.

I used TaxAct to prepare an amended return last year when the IRS messed up my itemized deductions. It worked fine but you have to be very careful. The software doesn't automatically know that you're correcting IRS errors versus changing your own entries. Make sure you use the explanation section to clearly state that you're fixing IRS transcription errors, not changing your original filing.

Thank you for sharing! Did you and your spouse both use the same CPA so they could coordinate both of your returns? And did you have any issues with previous years where you might have filed inconsistently?

Yes, we definitely used the same CPA for both returns to ensure consistency. That was key to making sure our community property allocations matched up perfectly. Regarding previous years, we had indeed filed inconsistently for two years (similar to your situation). Our CPA advised that we could either amend those previous returns or simply start filing correctly going forward. Since the difference in our case wasn't enormous and we hadn't been audited, we chose to just file correctly going forward rather than opening up old returns. The CPA mentioned that the statute of limitations for most returns is 3 years, so after that time passes, your risk decreases significantly.

How much were the penalties? Was it worth the savings you got on the student loans during that time or did it completely wipe that out?