Tax Preparation Workflow

Your CPA gets a clean package in January, not a shoebox in March.

Updated 2026-04-18
Tycoon solution

AI CFO runs a year-round tax readiness program. Quarterly estimates calculated from real P&L (not last year's), 1099 tracking from day one of each contractor, nexus monitoring across 50 states as revenue grows, and a year-end package that lives in Google Drive and updates monthly. By January 15 your CPA has everything they need — they file, they don't reconstruct.

How it runs

  1. Quarterly estimate calculation

    15 days before each quarterly deadline (Apr 15, Jun 15, Sep 15, Jan 15), AI CFO calculates the estimate from actual YTD P&L + projected Q4. Not last year's number, not a rough guess — a real estimate with the math shown. Reviewed with you before payment.

  2. 1099 tracking from day one

    Every contractor payment (Mercury, bill.com, Stripe) gets tagged against the vendor record. W-9s collected at onboarding (via the Vendor Onboarding workflow). At year end, AI CFO generates 1099-NECs for everyone >$600, files electronically with the IRS, and mails copies to contractors. Usually done by Jan 15.

  3. State nexus tracking

    As revenue grows, AI CFO watches state nexus thresholds (economic + physical). When you cross CA's $500K or NY's $500K, you get a chat alert with a plain-English explanation and a recommendation: register for sales tax, file a franchise tax return, or file zero. No surprise letters from state tax authorities.

  4. Sales tax collection and remittance

    For SaaS or e-commerce, AI CFO integrates with your Stripe/Shopify checkout to collect sales tax at the right rate per state/county. Remittance happens monthly (or quarterly, per state rules) via TaxJar or Avalara. You approve each filing in chat — 5 minutes instead of an hour.

  5. Deduction capture

    Throughout the year, AI CFO flags deductions you might miss: home office %, mileage (via your calendar + addresses), QSBS qualification tracking for founders, R&D credit eligibility, Section 179 on equipment, retirement contribution room (solo 401k/SEP-IRA). Year-end estimate includes all of these.

  6. Year-end package assembly

    By Jan 15, AI CFO assembles the CPA handoff package: P&L + balance sheet for the year, reconciled bank statements, 1099 copies filed, major transaction memos (equipment purchase, equity grants, acquisition expenses), state filings summary, prior year comparison. Lives in Google Drive, shareable link to your CPA.

  7. CPA review and filing

    Your CPA opens the package, asks clarifying questions in the shared Notion doc, and files. Since the books are already clean, CPA time drops from 8-12 hours to 2-3 hours. Bill drops proportionally — from $4K to $1-1.5K for the federal return.

Who runs it

  • hire/ai-cfo
  • hire/ai-bookkeeper
  • hire/ai-coo

What you get

  • CPA package ready by January 15 every year
  • Quarterly estimates within 5% of actuals (no big April surprise)
  • All 1099s filed on time, zero IRS penalty letters
  • State nexus tracked proactively, not retroactively after a state letter
  • CPA bill drops 40-60% because they file instead of reconstruct
  • Missed deductions captured ($3-10K/year for typical SaaS founder)
  • Audit readiness: every number has a source document linked
FAQ

Frequently asked questions

Clear answers about wallet credit, usage, subscriptions, and how Tycoon charges for work.

I already have a CPA. Why do I need AI to do tax prep?

You don't want AI to do tax filing — that's what the CPA is for. You want AI to do the prep work the CPA currently charges you $300/hour to do: pulling bank statements, matching 1099s to W-9s, reconciling intercompany transfers, catching a missed home-office deduction. A typical founder pays their CPA $3-5K/year; 60% of that is prep work, 40% is actual filing and strategy. Tycoon handles the 60% — your CPA stays in their high-value zone (entity structure, equity planning, state strategy) and your total tax bill drops.

What about state nexus — I'm remote, how do I know where I owe?

Nexus has two flavors: physical (you or an employee is in the state) and economic (you sell >$X into the state). AI CFO tracks both. For physical: it pulls your calendar + addresses + employee records to flag when you've spent >14 days in a state or hired someone there. For economic: it tracks your Stripe + Shopify revenue by customer state against each state's threshold ($100K or $500K typically, varies wildly). When you cross a threshold, you get a chat explaining what registration is required and a draft application. The costly mistake is ignoring this for 2 years and then getting a letter demanding back taxes + penalties.

My entity is an LLC taxed as S-corp / C-corp / partnership. Does this handle all entity types?

Yes, but the workflows differ. For S-corp: AI CFO calculates reasonable salary vs distribution split, runs payroll through Gusto, files 1120-S prep. For C-corp: calculates federal+state tax provisions, tracks NOL carryforwards, handles R&D credit studies, preps 1120. For LLC/partnership: handles K-1 prep for each member, distributes year-end tax packages. For sole prop / single-member LLC: Schedule C prep, SE tax calc. You set your entity type once and all the workflows adapt.

Can it handle international operations — foreign entity, foreign contractors, VAT?

Partially — international adds real complexity that deserves a specialist CPA. What Tycoon handles: tracking payments to foreign contractors (W-8BEN on file, no withholding needed), VAT/GST collection on EU/UK sales via Stripe Tax, foreign entity financials in USD for consolidation, FBAR tracking if you have >$10K in foreign accounts. What it doesn't do: transfer pricing studies, foreign tax credits, PE (permanent establishment) analysis, US-UK tax treaty positions. For those you pay a cross-border CPA $500-1K/year; Tycoon makes their job easier by keeping the underlying data clean.

What happens if the IRS sends a letter or audits us?

First step: don't panic, most IRS letters are automated mismatch notices (CP2000, CP501) and not audits. AI CFO pulls the letter, identifies what the IRS thinks is wrong, and pulls supporting docs from your audit trail (every transaction has a source document linked). 80% of the time the response is a letter explaining the discrepancy with attached evidence, drafted in 30 minutes. For actual audit (rare — <1% of S-corps), you forward to your CPA who now has a fully-reconciled set of books with source documents, making their job 10x easier. Audit survival rates correlate strongly with bookkeeping quality, and this workflow keeps yours clean.

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