Posted on: 13 April 2015Share
Taxes can be confusing for just about anyone trying to file on their own. If you own a small business, taxes can be even more intimidating. There's a lot of information to keep up with, so it can be easy to miss. Here's a look at some of the most common tax mistakes that a small business owner can make, and what you can do to avoid them.
Not planning for just how many agencies you will owe Just about everyone is aware of income taxes. If you have a small business, you're probably planning to pay taxes on the money you make. But that's just the start of things. As a business owner, you're subject to many more taxes than you are as an individual. You'll owe taxes like sales tax, payroll taxes for your employees, self-employment tax (since you're the owner), property tax, city and state agencies and more. Many of these taxes carry hefty penalties if you don't pay them. Not paying attention to exactly who you owe can land your business in big trouble very quickly.
Not keeping track of everything you have If you own a small business, you have some assets that are a part of that business, even if it's just a computer. When tax time comes, you'll need to know exactly what your assets and your inventory are as you're responsible for taxes on both. There's another advantage to keeping up with assets though. The assets you own can actually lessen your tax liability. If your assets are worth less this year than they were before, you may not be required to pay as much.
Not separating business and personal deductions One advantage of small business taxes are the deductions you're able to take. But remember that some of those deductions are only for your personal taxes or only for your business' taxes. This is likely the most common mistake people make, and one that can quickly trigger an IRS audit. Make sure you have dedicated, separate personal and business accounts, and that funds never cross into the wrong account.
Of course, the easiest way to make sure you stay on top of your taxes is to hire a certified public accountant, like Carmines Robbins & Company PLC. They have years of experience with this taxes, and have probably seen plenty of situations just like yours. It may be tempting to try to save a little money by doing your own taxes, but you'll probably find it's worth your money to let an accountant handle things. Trust the professionals, and you're not only taking the stress off of yourself, but you're making sure the job gets done right the fist time.