The Complete New Architecture Firm Startup Checklist

Starting an architecture firm is exciting, but the business side can be overwhelming. This checklist walks you through the essential steps, from legal setup to tax registration, with realistic costs and timelines. Follow it in order, and you’ll have a solid foundation before your first client project.

1. Choose Your Legal Structure

Your business structure affects taxes, liability, and paperwork. Most new architecture firms choose one of these:

• LLC (Limited Liability Company): Offers liability protection with flexible tax options. Formation costs range from $50 to $500 depending on your state. Annual fees are typically $0 to $800.
• S-Corporation: Often preferred once you have steady income, as it can reduce self-employment taxes. Requires more payroll administration. Setup costs are similar to an LLC, plus ongoing payroll service fees of $40 to $100 per month.
• Sole Proprietorship: Easiest and cheapest, but you are personally liable for debts and lawsuits. Not recommended for architecture due to high professional risk.

Action step: Research your state’s filing fees and annual report requirements. Most states allow online registration through the Secretary of State website.

2. Register Your Business Name and Get an EIN

Your firm’s name must be unique and comply with state rules. Check your state’s business registry and the U.S. Patent and Trademark Office for conflicts.

Next, apply for an Employer Identification Number (EIN) from the IRS. It’s free and takes about 10 minutes online. You’ll need it to open a business bank account, file taxes, and hire employees.

Action step: Complete the EIN application on IRS.gov today. It’s immediate.

3. Obtain Professional Licenses and Permits

Architecture is a regulated profession. You must hold a license in every state where you practice. Requirements vary, but generally include:

• A degree from an accredited program
• Completion of the Architectural Experience Program (AXP)
• Passing the Architect Registration Examination (ARE)

Licensing fees range from $100 to $500 per state, plus renewal fees every 1 to 3 years. You may also need a local business license or zoning permit depending on your office location.

Action step: Check your state’s licensing board website for exact requirements and application deadlines.

4. Set Up Business Insurance

Architecture firms face significant liability. At minimum, you need:

• Professional Liability (Errors & Omissions) Insurance: Covers claims of negligence or mistakes. Premiums start around $2,000 to $5,000 per year for small firms, but can be higher based on project size.
• General Liability Insurance: Covers bodily injury and property damage. Costs $500 to $1,500 per year.
• Workers’ Compensation: Required if you have employees. Costs vary by state and payroll.

Action step: Get quotes from at least three insurance brokers who specialize in professional services. Compare coverage limits and deductibles.

5. Open a Business Bank Account and Set Up Accounting

Separate your personal and business finances from day one. Open a business checking account and a high-yield savings account for tax reserves. Most banks require your EIN and formation documents.

For accounting, choose software that fits your needs:

• QuickBooks Online: $30 to $100 per month, industry standard, integrates with payroll and tax software.
• Xero: $13 to $65 per month, user-friendly, good for small firms.
• FreshBooks: $11 to $50 per month, simple invoicing, but less robust for project costing.

Action step: Set up a chart of accounts specific to architecture, including categories for project revenue, software subscriptions, and professional fees.

6. Understand Your Tax Obligations

As a new firm, you’ll face several taxes. Here’s what to expect:

• Federal Income Tax: Paid quarterly via estimated payments if you expect to owe more than $1,000. Use Form 1040-ES.
• Self-Employment Tax: Covers Social Security and Medicare. The rate is 15.3% on net earnings up to the Social Security wage base ($168,600 in 2026).
• State and Local Taxes: Varies. Some states have no income tax; others have franchise or gross receipts taxes.
• Sales Tax: Generally not applicable to architectural services, but you may owe tax on physical products like scale models or printed plans.

Action step: Set aside 25% to 30% of every client payment in a separate savings account for taxes. This prevents a surprise bill in April.

7. Implement a Time-Tracking and Billing System

Architecture is billed by the hour or by project phase. You need accurate time tracking to invoice correctly and to support your tax deductions.

Popular tools include:

• Toggl Track: Free for up to 5 users, paid plans from $10 per user/month.
• Harvest: $12 per user/month, includes invoicing.
• Clockify: Free unlimited users, paid plans from $9.99 per user/month.

Action step: Choose a tool and train yourself to log time on every task, even administrative work. This data is also useful for estimating future projects.

8. Track Deductible Expenses

Keep receipts for every business expense. Common deductions for architecture firms include:

• Software subscriptions (CAD, BIM, rendering tools)
• Office rent and utilities
• Professional development and conference fees
• Travel for client meetings and site visits
• Marketing and website costs
• Insurance premiums
• Home office deduction if you work from home

Action step: Open a dedicated business credit card and use it for all expenses. This simplifies tracking and builds your business credit.

9. Plan for Payroll (If You Hire)

If you hire employees or contractors, you must handle payroll taxes. Options:

• DIY with payroll software: Gusto or ADP, $40 to $100 per month plus per-employee fees.
• Hire a bookkeeper or CPA: $200 to $500 per month for basic payroll and tax filing.

Action step: If you plan to hire within the first year, set up payroll before your first hire. This avoids penalties for late filings.

10. Create a Tax Calendar

Missing deadlines triggers penalties. Mark these dates on your calendar:

• Quarterly estimated tax payments: April 15, June 15, September 15, January 15
• Annual federal tax return: April 15 (or extended to October 15)
• State tax filings: Varies, check your state’s department of revenue
• Business license renewals: Usually annual, check local requirements

Action step: Download the IRS tax calendar and set reminders in your phone for each deadline.

FAQ

Q: Do I need to register with my state before getting an EIN?
A: Yes, you’ll need your formation documents (like Articles of Organization) before applying for an EIN. The EIN application asks for your legal entity name and formation date.

Q: Can I deduct the cost of my architecture software?
A: Yes, software subscriptions are fully deductible as business expenses. If you purchase perpetual licenses, you may need to depreciate them over several years.

Q: What if I don’t make a profit in my first year?
A: You can still deduct business expenses, but the IRS may scrutinize hobby losses. Keep detailed records and show a clear intent to make a profit through marketing and client acquisition.

Q: Should I hire a CPA from the start?
A: It’s wise to consult a CPA for tax planning, especially for entity choice and quarterly estimates. A CPA can cost $300 to $1,000 for initial setup and advice, but can save you more in penalties and missed deductions.

Related guides

• The Annual New Architecture Firm Review Checklist
• 7 Questions to Ask Before Buying a New Architecture Firm
• 7 Things to Know Before You Start a New Architecture Firm

The bottom line

Launching an architecture firm requires careful attention to legal, financial, and tax details. Work through this checklist systematically, and don’t skip the foundational steps like licensing and insurance. Set aside time each week to manage your books and track expenses. With a solid structure in place, you can focus on what you do best: designing great buildings.