California Startup CPA: 5 Questions to Ask First

California Startup CPA: 5 Questions to Ask First

Most startup tax problems are not filing errors. They are decisions made months earlier, such as a stock grant priced wrong or an exercise timed badly, that nobody ran past a CPA. A California startup CPA earns the fee before the return is due, so the first call should test how early the CPA gets involved.

The Sam's List partner program lists five California firms: Doug Johnson CPA in Los Angeles, Ever Ledger in Los Angeles, Olarry in San Jose, Good Operator in West Hollywood and Bull Oak, a financial advisor in San Diego. Only Doug Johnson CPA is written up here, as the firm whose profile covers growing businesses and high earners with equity compensation. The other four are named and linked only. Every firm named is a vetted Sam's List member. The firm written up below is a paid featured member of Sam's List. How we picked this list is at the end.

1. Does Your California Startup CPA Handle the Company Return and Your Equity Tax Together?

You want to hear "one team, one calendar."

A startup has two tax lives. The company files its own returns and pays California franchise tax, which generally includes a minimum annual amount even in a year with no revenue. Founders and employees owe tax on their own equity. Decisions on one side change the other: the price set for options affects what employees pay.

Ask whether one firm covers both. Splitting is fine if someone owns the handoff. If no one does, you are that person.

The limitation: one firm doing both is convenient, not automatically better. Ask who prepares each return.

2. How Do You Handle a 409A Valuation and Option Grants?

A 409A valuation is an independent appraisal of what your common stock is worth, used to set the strike price on options. Options priced below fair market value on the grant date can trigger additional tax for the holder under the deferred compensation rules in Section 409A of the Internal Revenue Code.

The safe harbor most startups rely on: a valuation by a qualified independent appraiser is generally presumed reasonable if it is no more than 12 months old and no material event has happened since. A priced funding round or an acquisition offer can be a material event and may call for a new valuation.

Ask whether the CPA reviews the valuation, flags a grant date that falls after a material event, and owns the calendar so the valuation does not lapse.

The limitation: a CPA is not the appraiser, and the presumption can be challenged if the facts do not support it. Involve your attorney too.

3. What Is Your Approach to Startup Equity Compensation Tax in California?

Startup equity compensation tax comes in a few shapes, and a CPA should walk through each in plain language. Founders buying restricted stock may be able to file an 83(b) election, which has a hard 30-day deadline after the stock is transferred to you. Some stock may qualify for the federal qualified small business stock exclusion on a later sale, if many conditions are met.

California adds its own layer. The state taxes residents on their income, including equity compensation, and may tax part-year residents and nonresidents on income tied to work performed in California. A founder who moves out of state before an exit needs a CPA who asks where the work was done. Ask also how California treats items like the stock exclusion, since it has historically not followed every federal rule.

Equity type	Generally taxed when	Ask the CPA about
Restricted stock	At vesting, unless an 83(b) election is filed	The 30-day election deadline
Non-qualified options	At exercise, on the spread	Cash to cover the tax
Incentive stock options	Not at exercise for regular tax	Alternative minimum tax modeling

The limitation: these are general patterns. Holding periods, plan terms and your other income change the result, so a CPA should model your numbers.

4. How Often Will You Run a Year-End Projection for Founders With Lumpy Income?

Founder income does not arrive evenly. A secondary sale, a bonus, an option exercise or a year of near-zero pay can each swing your bracket.

Ask for the cadence in months, not adjectives. A useful pattern is a projection in the fall, while there is still time to act, and another after any large event. You want a number: expected federal and California tax, what has been paid or withheld, and the gap. Then the CPA should say whether to adjust withholding, make an estimated payment or time an exercise differently.

The limitation: a projection depends on a valuation and share price you cannot control. Treat it as a planning range, not a guarantee.

5. Who Do I Call When a Vest or Exercise Lands Mid-Quarter?

Equity events do not wait for filing season. A tender offer opens in March. A co-founder wants to exercise before a round closes.

Ask who answers a mid-year question, how fast, and whether a short question is covered or billed separately. Then ask: "If I tell you about an exercise before I do it, what do you do with that information?" The right answer is running the numbers and replying before the date, not noting it for the next return.

The limitation: responsiveness during the sales process is not always responsiveness after you sign. Ask for a client reference.

Doug Johnson CPA: A California CPA for Equity Compensation on Sam's List

Doug Johnson CPA is based in Los Angeles and was founded in 2024. Its profile positions the firm as the CPA firm for growing businesses with $250,000 to $10 million in revenue and for high earners with equity compensation. It has three employees, Doug Johnson as owner and Frederico Lima as associate, serves clients nationwide, and lists minimums of $250,000 of income and $250,000 of revenue.

The profile does not claim a startup specialty. The fit it describes is growing businesses and people whose pay includes equity, so put the five questions above to it directly.

Doug Johnson CPA has 15 verified client reviews on Sam's List as of 2026-10-02. Each review is submitted by an individual who identifies as a client of the firm and rates it on communication, subject-matter knowledge, and overall satisfaction. Reviews reflect those individual experiences and do not represent an endorsement by Sam's List. Doug Johnson CPA is a paid featured member of Sam's List. Ratings and rankings are not indicative of future performance or results.

The limitation, plainly: the income and revenue minimums rule out many pre-revenue startups and founders with modest income. A three-person firm founded in 2024 has a short track record and finite capacity in filing season. A Los Angeles address does not make it the right fit by itself, since it serves clients nationwide.

Frequently Asked Questions

How much does a 409A valuation cost, and how often do I need one?

Cost varies by valuation firm and company complexity, so get quotes. A valuation by a qualified independent appraiser is generally presumed reasonable for up to 12 months, unless a material event, such as a priced funding round, happens first. Refresh before granting options after such an event.

When should a startup founder hire a CPA?

Before the first stock issuance or option grant, ideally. The 83(b) election has a 30-day deadline, and early pricing choices are hard to undo. Waiting until the first return means fixing problems rather than avoiding them.

Does California tax startup equity differently from the federal government?

In part. California generally taxes residents on their equity compensation and may tax nonresidents on income from work performed in the state. California also does not follow the federal qualified small business stock exclusion, so state and federal results can differ. Ask a CPA to model the state result separately.

How We Picked This List

You should be able to check our work, so here is what we did.

The pool. The pool is the Sam's List partner program: vetted members with a live public profile. It is not a survey of every California CPA.

The California roster. The roster for California is five firms: Doug Johnson CPA, Ever Ledger, Olarry, Good Operator and Bull Oak. That is the whole roster, not a shortlist, as of 2026-09-14, the date the roster was last frozen. Rosters change, so check the directory.

Who was written up, and why. Doug Johnson CPA is written up because its profile positions it for growing businesses and for high earners with equity compensation. Ever Ledger, Olarry, Good Operator and Bull Oak are named and linked only, with no write-up and no recommendation, and nothing here says they do or do not work with startups.

Ranked or not. This is a list of questions, not a ranking. The numbering is the order we would ask them in and says nothing about any firm.

What review counts mean here. We cite the verified review count and its date from the profile. A count shows how many clients wrote something down, not technical quality.

Paid listings. Listing on Sam's List is free, and so is being named in this article. The firm written up here is a paid featured member of Sam's List, which is why it is written up here.

Write down the answers to the five questions and compare them on each call. You can browse accountants on Sam's List and see the firm above.

---

About the author: Kimberly Green is cofounder of Sam’s List, a directory and matching platform for financial professionals.