Somebody needs to do the same thing for filing taxes. Figuring out an 1102 form is a daunting task for a pre-revenue startup that just wants to work on the business.
Having dealt a little with company structure legal (we sold our LLC but I wasn't point person on the deal mechanics) and a lot with LLC principal tax issues, I'd be much more comfortable with online legal than with online taxes. There's an advantage to doing your company structure in a cookie-cutter way, so that you look like every other company YC sees. There's no similar advantage for doing taxes that way.
If there's money flowing through your company, get a good accountant. You can either do it now, or in a mad scramble when the IRS puts a lien on your bank account.
I absolutely agree it's worth getting a good accountant if there's money flowing through your company. But for many early-stage startups, there might not be any money flowing yet, in which case hiring an accountant is a little difficult and almost seems unnecessary, considering there's no money to account for. I imagine a tax form for a startup with 0 revenue and low costs should be pretty cookie-cutter.
Of courses, there's not much money to be made serving startups that have no money.
Last time I went C-corp because I was certain my company will be a great success, ended up switching directions a couple of times, then ran out of money and took a job. Thinking about another go, but this time thinking I might start off as an S-Corp to make taxes simpler and filing less costly. Perhaps a LLC might not be a bad choice either, but I'd really like is to find a good accountant to help me choose the right entity.
Doing the tax equivalent of clerky.com is a "schlep" in PG parlance.
It is EXCEEDINGLY difficult but it can be done. The number of people who can do this well is probably very small -- take a few million words of ever-changing law, regulations, case law, etc. and convert it into code.
Yet it has been done. Just look at tax return preparation software. It's out there. And it is, for the most part, shit.
I offer that judgment as a tax lawyer whose office prepares tax returns. And who cleans up messes created by people using the software out there in the world.
Tax software alone is not the end to shoot for, however. You need to bolt together a bank plus accounting software plus the tax software. If you have a fashion-forward bank that will host a better Quickbooks (not just "oh, yeah, my bank talks to your software" -- make it F-ing work), then have that accounting data speak directly to the tax software -- this is a winner. For extra added bonus points, this system collects all of the documentation required by the IRS on audit.
For the bulk of people out there, tax and accounting is a schlep problem and not a brain damaging intellectual exercise. And if you solve 80% of the problems leaving 20% for the owner/accountant to solve, you've saved a ton of time and money.
I have been cobbling together a system for nonresident consulting types to do business in the USA: a corporation, how to sign the contracts with consulting clients, how to allocate the income to taxable in the USA vs. not taxable in the USA, how to pay the employees/consultants properly in the USA, what paperwork to file, etc. etc. But it has humans where software would be useful. That's because of one key constraint.
The biggest problem is that people don't want to do the schlep work -- not even download data from the credit card or bank sites into their software. And if they download, they don't want to look at it. They'd rather allow magic to occur.
Someone should write magic software. :-) It's either magic software or intelligent and expensive humans.
