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Navigate tax season using Stripe Atlas
- patio11 9y agoHowdy folks. I worked a wee bit on this and am happy to answer questions if you have them.
- superasn 9y agoNot that it is my intention to do it, but just for the sake of knowledge, what if I find that Stripe Atlas isn't for me and I want to close the company I've setup? What kind of work does that entail? Is it easy or hard? Thanks.
- patio11 9y agoIt depends. If the company hasn't generated revenue yet, then the process is relatively straightforward, and we have an option to work with an attorney to get it done for a fixed $500. https://stripe.com/docs/atlas/next#dissolution https://stripe.com/docs/atlas/next#dissolution You can probably imagine that closing a company with actual assets / liabilities / pending legal claims / etc can get much, much more complicated. That sort of thing would be solidly "you need to ask a lawyer" level.
- newusertoday 9y agoany plan for atlas like program in asia?stripe is now supported in SG as well and taxes are way lower as compared to US.
- patio11 9y agoWe have a rule that we never announce anything before we're ready to ship it. That said: the general scale of our ambitions is "incorporate a majority of all Internet companies, worldwide" and "materially impact global macroeconomic indicators." Anything needed to accomplish those things is in (eventual) scope for us.
- csomar 9y agoMy issue is that it is still not clear how much you are going to pay in term of taxes. It seems like my first company that I created here in my country: You start discovering taxes as you move on. Could you for example create an article that demonstrates these following cases: 1. Exactly 0 activity. Cost to incorporate + yearly cost. 2. Some International sales (credit cards). Say 20k in sales 3. US sales. Say 20k in sales. 4. Example of deduction and how much it saves in taxes. These example can be very helpful. For example, if I'm expecting $20k in US sales, and have $15k expenses; I know that my taxes + accounting expenses will be between X and Y. I know that every situation is different but it kinda brings the feet back to the earth. It is not going to cost just to registration and the yearly franchising fee.
- patio11 9y agoI can give you reasonably firm quotes for tax preparation but I cannot give you quotes inclusive of taxes, because there is wide variance in situations and because "Estimate my taxes for me" is very firmly in the practice of accountancy and/or law. Getting started with Atlas is $500 flat, in all cases. The ballpark numbersfor yearly running costs, inclusive of the Delaware franchise tax, registered agent fee, the bank fee, and a tax return through the appropriate Atlas partner but not inclusive of corporate income tax or your personal tax situation: No activity: ~$1,000 $20k of sales, all US activity: ~$2,000 $20k of sales, cross-border activity: still rounds to ~$2,000 but the tax return preparation will cost ~$200 more
- gamblor956 9y agoDoesn't sound like you need to incorporate in the US given your bare-bones fact pattern (non-US company selling into the US) but you'd need to hire an accountant or tax lawyer to provide advice specific to your circumstances.
- option_greek 9y agoI will be posting this on atlas forum soon but wanted to ask here as well :). We incorporated last November. Is the delaware franchise tax payable again this march.
- patio11 9y agoCompanies which incorporated in calendar year 2017 will owe their first franchise tax in March 2018.
- wasd 9y ago1. If you are already incorporated, is it possible to still use this service? 2. I know the world doesn't revolve around CA but a sure lot of tech happens here. Any chance you'll add CA franchise taxes too?
- joshdotsmith 9y agoI'm also curious about this. We were accepted into Stripe Atlas but too late – we ended up forming our company while on the waiting list and couldn't partake.
- DenisM 9y agoWhy no S-Corp? Couldn't find an answer myself.
- patio11 9y agoS corps aren't a company type, they're a status you can elect for tax purposes. We didn't automate the process of making that election because we felt it was not a fit for most Atlas users. A Delaware C corporation can still elect S corp status; that's a "talk to your accountant" question. The primary reason people seem to want S Corps is to save social security taxes by putting their salary in one small bucket and their distributions in one larger bucket. Should we spend time enabling that, when our primary goal is accelerating the number and success of viable businesses creating wealth in the world? That does not sound like it is how we should spend a month of our lives.
- DenisM 9y ago>that's a "talk to your accountant" question. I though it was the point here, to reduce such needs? Anything Atlas does can be solved by an accountant and a lawyer. As to reasons, S-Corp allows deducting losses from personal income. This saves a good chunk of money in the early stages. In fact there few reasons to avoid S-corp until you start picking up serious investments.
- SwaroopH 9y agoWow, looks like they made it super easy to file franchise taxes. Directly through Atlas and no extra fees either!
- superasn 9y agoI really admire how Stripe atlas has the customer's best interest in mind. I recently incorporated my company through them and without much thought decided to do it near 20th Dec. Immediately I got an email from them that it would be in my best interest to wait till 1st otherwise I'll be paying taxes in March. That one email saved me a lot of work this year, so thanks for that. It's these little things that can be really helpful sometimes.
- koolba 9y agoCurious why you didn't wait 12 days (until Jan 1st) to save your self from one year's paperwork and fees? (assuming you're using the calendar year end as your fiscal year end). EDIT: Oh duh I totally misread that. Sound advice indeed!
- tudelo 9y agoPretty sure the OP is saying he did, after getting notice.
- superasn 9y agoYou're right about that. Waiting for 2 weeks was well worth all the paperwork i'll avoid this year :)
- z3t4 9y agotip: Jan 1st might not be the optimal start of the fiscal year. For example Christmas and new year season might be very busy. It should not matter if you have your accounting set up correctly though, but that is usually not the case for small businesses.
- EADGBE 9y agoI hadn't seriously considered Stripe to take care of all the initial paperwork, but after reading a comment like this, I'm reconsidering.
- nik736 9y agoI am based in Germany and would be required to pay my taxes in Germany (?). Going with Stripe Atlas, would I have to pay additional tax in the US as well?
- patio11 9y agoAtlas incorporates companies in the U.S., and US companies will have a filing obligation for federal taxes and an obligation to pay Delaware franchise tax (which is basically a renewal fee for the company every year). Whether it is "additional" tax depends on your circumstances, and is a good question to run by an accountant. I've run US businesses from Japan for ~10 years or so. The net tax rate of doing is not obviously materially higher than just having a Japanese entity and doing everything through it; I'll avoid giving you the full blow-by-blow of why that is true, since it isn't relevant to your circumstances, but the short version is "foreign tax credits" and "social security totalization agreement " (a bilateral treaty).
- hultner 9y agoDo you know of anyone running an Atlas corporation in Sweden and how it works in conjunction with the Swedish tax system? I've been curious on the concept ever since I first read about it on your blog (which over all is a great read).
- patio11 9y agoWe have a variety of companies opened by folks operating in Sweden (and another 100+ countries besides). I would love to give you an answer regarding the Swedish tax system, but it is not one of the two tax systems that I know enough about to model well and, unfortunately, if it were, I would be legally enjoined from doing any sort of interpretation about how our product interacted with it. I recommend you talk to a local accountant.
- lgbr 9y agoNo, Stripe forms a C Corporation which separates the company's income from your own (as opposed to an S Corporation or LLC), which will prevent Germany's Welteinkommenprinzip from having an effect on your German tax return.
- Mortiffer 9y agoSo can anyone here get their hands on one of these stripe atlas invite codes ?
- patio11 9y agoI'd be happy to give one to anyone from HN who wants one. Just email me; I'm (unsurprisingly) my usual handle @stripe.com (If you want it immediately, I'm up for next ~30 minutes or so.)
- ezekg 9y agoOne of the main reasons I held back with Stripe Atlas back whenever it was in beta (been sitting on an invite for awhile) was that I didn't want the added tax burden while bootstrapping that an C Corp brings in, so I ended up going for a simpler LLC. These resources on taxes are good to see. The work Stripe has been doing with Atlas is really, really great.
- abc03 9y agoOne word of advice to everyone thinking about Stripe Atlas living outside of the USA: Please discuss plans to incorporate with an Accountant beforehand. You are still liable to pay taxes in the country where you effectively operate from.
- drchiu 9y agoYup. It’s one of the reasons I didn’t go through them when incorporating... not that I didn’t want to. If they figure this one out, it would be a dream. Sort of like when Stripe first launched and was only available in certain countries.
- bspn 9y agoWouldn't that depend on the details of any tax treaty your home country has with the US?
- gamblor956 9y agoGenerally it would not. Under almost every US tax treaty, if you incorporate in the US but run your business from another country, you would be liable to tax in both the US and that other country for income earned by the business. (Concept of permanent establishment.) It's even worse if you operate in a country that doesn't have a tax treaty with the US.
- nik736 9y agoIs there any legal way to avoid it?
- gamblor956 9y agoDon't operate a US-incorporated business from a non-US location. Conversely, if you are going to be operated from a non-US location, don't incorporate in the US.
- dantiberian 9y agoI looked very seriously at using Stripe Atlas from New Zealand, but ultimately the uncertainty of the tax implications stopped me from using it. It was not only the short-term implications while running the company I was worried about, but also what kinds of reporting requirements it might trigger for years after. Things like FATCA, dealing with US foreign tax credits, and who knows what else that is lying just below the surface. It would be great if Stripe could offer incorporation in another company with fewer unknown implications, or hire a lawyer to write an opinion for the implications of using Stripe Atlas in every country in the world.
- walshemj 9y agoSo setting up a company in the USA costs you a minimum of $400/ $500 a year just to exist. In the UK once you have set up a company there is no ongoing cost paid to companies house.
- dantiberian 9y agoI was really hoping that this announcement was going to be related to collecting, calculating, and remitting sales tax (VAT) with Stripe. More and more countries are starting to charge sales tax on online purchases. There are third-party solutions that integrate with Stripe, but none of them are as clean or nice as it would be if Stripe was to handle it for you.