Lisa Johnson, CPA, Tax Director, FintechForce


A Checklist For Your Startup

Lisa Johnson, Director of Tax, FintechForce

Another year is coming to a close! It’s a good time to take stock of your company’s past 12 months and get your ducks in a row for 2024. Year-end reporting is always more involved due to annual filing requirements. Businesses must look at financial “housekeeping” every month, but the end of the year demands a closer look at the financial reports and performance assessments before diving into a new year.

All U.S. entities are required to report worldwide transactions which include those conducted in digital currency and through foreign accounts. Neglecting to report these can result in substantial penalties, so here are some highlights of the transaction reporting requirements to stay compliant in the coming year.

Year-End Reporting

Tax information returns for the calendar year are due to recipients by January 31st, 2024. Forms 1099 for Nonemployee compensation and other Miscellaneous Payments are due if a business pays at least $600 to a U.S. recipient for services or events other than sales of tangible assets. A best practice to comply with this requirement is to ensure that all recipient information including name, address, and tax identification numbers are up to date in your files before the reports are due. Form W-9, Request for Taxpayer Identification Number and Certification, is used to request this information from vendors throughout the year.

The U.S. government attempts to keep companies honest about worldwide transactions by requiring any U.S. individual or entity who has financial interest in accounts outside of U.S. borders to report information via the Foreign Bank and Financial Accounts Report (FBAR). This report is required for entities with accounts of an aggregate balance of $10,000 at any time during the calendar year. The report is due by April 15th and must be submitted electronically through the FinCen system. Filing late or not at all is subject to civil and/or criminal penalties. It is important to note that if an individual has signature authority over a business account outside of the U.S., both the individual and the business must file this annual report.

Additional Year-End Reporting For Corporations

Corporations have additional filing requirements for information returns when specific stock transactions occur with U.S. employees. When an employee exercises an Incentive Stock Option, Form 3921 is due to the recipient and to the IRS. When an employee becomes owner of an Employee Stock Purchase Plan, Form 3922 must be filed and delivered to recipients by January 31st. The sooner this is handled, the sooner you can go from looking back to looking ahead.

Continuous Reporting

Any business who accepts physical cash payments over $10,000 has an important filing which is due year round. The Report of Cash Payments Over $10,000 (Form 8300) is filed electronically through the FinCen system within 15 days of receiving these funds in a single cash payment or a series of related payments by a trade or business. The business must also provide a statement to each party included on a report during the calendar year by January 31st of the following year. Beginning January 1st, 2024, this requirement is extended to include virtual currency transactions.

These are just some of the things to keep in mind as you wrap up 2023. As the end of the year approaches, it’s natural to reflect upon how far you’ve come and look at where you’re headed. Whether you’re handling matters yourself or reaching out for assistance, getting your year-end financials and reporting ready now for the new year deadlines will put you one step closer to starting 2024 on a high note.

Lisa Johnson, CPA, Tax Director, FintechForce


How R&D Can Cost or Save Your Fintech Startup in the Ever-Changing Tax Landscape (or Minefield)

Lisa Johnson, Tax Director

Research and Development is a cornerstone of many startup businesses. For over 70 years, businesses have also been allowed to treat their efforts in research and experimentation like any other current trade or business expense for tax purposes. But as of 2022, that changed, bringing with it some good news and some bad.

If you’re a business owner, especially a startup or an aspiring unicorn, this applies to you. As we catch our breath from the end of another tax season, it’s important to highlight recent tax code changes in Research and Development (R&D) and Research or Experimental (R&E) expenses that will likely affect your bottom line.


The Tax Cuts and Jobs Act (“TCJA”) enacted in 2017 introduced significant changes to the Internal Revenue Code regarding R&D expenses for tax years starting after December 31, 2021. These changes require businesses to capitalize and amortize certain R&E expenses over a period of years rather than deducting them in the year incurred, resulting in reduced deductions and thus increased taxable income. Critics contend that these requirements hinder innovation and growth in the United States.

Senate Bill 866, the American Innovation and Jobs Act, was introduced in March 2023 to counteract those effects. It’s designed to promote innovation and job growth in the United States by repealing the TCJA changes in the treatment of R&E expenses.


NOW WHAT? As of June 2023, this Senate bill is still pending. Generally Accepted Accounting Principles (GAAP) remain the same, requiring the cost to be expensed in the year it is incurred. Tax professionals have hoped for more expedient relief from these requirements, and many requested tax filing extensions in anticipation of changes before the final deadline. That hope is dwindling, and it is mandatory for all businesses to comply with the daunting task of identifying direct and indirect expenses related to R&D solely for tax purposes.


R&D Credit expenditures are described in a different tax code section. Classified as Qualified Research Expenditures (QREs), these direct costs are more easily identified than the R&E expenses mentioned earlier.


HOW SO? Businesses may elect to use this income tax credit against payroll tax. This is a great opportunity for cash-strapped startup businesses. Eligible organizations who have less than 5 years of generating gross receipts and less than $5 million in gross receipts in the current year could offset up to $1.25 million in payroll taxes.

The documentation and processes for tracking QREs as well as the compliance with the new R&E expense requirements can be overwhelming. IRS guidance continues to evolve on this topic. As with any new tax regulations, it is important to proactively discuss the impact of these changes with your experienced tax advisor.