Founder Personal Finance
Written by Aparna Devalla, CPA
Curated by Rubric Financial
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Tax Obligations Most Founders Miss
- Estimated tax payments: founders with equity income, consulting income, or S-corp distributions must make quarterly estimated payments to avoid penalties
- State tax obligations: if you moved from California to Texas for tax reasons, California may still claim you as a resident for up to 18 months based on ties
- 83(b) election: must be filed within 30 days of receiving restricted stock. Missing this deadline can cost hundreds of thousands in taxes later
- Self-employment tax: founders paying themselves through an LLC owe 15.3% SE tax on all net income. An S-corp election can reduce this significantly
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Tax & ComplianceSection 754 Election: Step-Up Basis for Partnerships (and Why S-Corps Can't)
The §754 election is the mechanism that lets partnerships and LLCs step up the inside basis of their assets when a partner dies, transfers their interest, or takes a distribution. S-corps have no equivalent, a real cost founders often discover too late.
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