What expense category does Carta fall under?

When tracking business expenses, it's important to know where platforms like Carta fit. So, what expense category does Carta fall under? Let's break it down to help you categorize it correctly in your financial records.

Classifying Carta expenses

Choosing the right category depends on how your business uses Carta. Accurately categorizing Carta ensures clear financial reporting. Here's how you might classify Carta expenses:

• Software expenses: Since Carta is primarily a software platform, it falls under software expenses.
• Equity management software: Carta specializes in equity management, so this subcategory is a good fit.
• Financial analysis tools: If you're using Carta for financial reporting and analysis, you might categorize it here.
• Subscriptions: If you pay a recurring fee, categorizing it under subscriptions is another option.

Examples of Carta expenses

Here are some examples to help you categorize Carta expenses:

• Monthly subscription fees: Regular payments for using Carta's platform to manage your cap table.
• Additional user licenses: Costs for adding more team members to your Carta account.
• Premium features: Expenses for advanced services like 409A valuations or compliance tools.
• Training and support: Fees for onboarding assistance or personalized support from Carta's team.

For example, if your company pays $500 per month for Carta's equity management services, you would record this as a software expense under equity management software.

Tax implications of Carta expenses

Properly categorizing Carta expenses can affect your tax deductions. Here's what to consider:

• Deductible expenses: Software expenses like Carta are typically deductible as ordinary and necessary business expenses.
• Amortization considerations: Some software costs may need to be amortized over time.

Keep detailed records of all Carta-related expenses to support your deductions. Make sure you record expenses in the correct tax year, especially for subscription payments. Accurate categorization helps you maximize tax benefits and stay compliant with tax laws.

Let Ramp automate your expense process

Managing expenses like Carta doesn't have to be a hassle. Ramp can automate the categorization, tracking, and management of your software expenses. With Ramp, you'll save time, reduce errors, and keep your financial records accurate. Let us handle the details so you can focus on growing your business.