Many small business owners make some of the same tax mistakes that could cost them far more in the long run. Learn five of the most common of these and how you can best avoid them.
- Reporting Income Incorrectly
Reporting payments invoiced versus revenues received can be tricky business, and getting it wrong can have severe consequences. Over-reporting and under-reporting income could land you a tax audit or charges of fraud.
Keep clear and accurate reports year-round to avoid this scenario. If you're concerned about doing it properly yourself, hire a qualified professional to handle your small business bookkeeping.
- Reporting Expenses Incorrectly
Likewise, small business owners often misreport their expenses. Some of the most typical of these mistakes include mixing personal and business expenses or claiming too much in deductions, such as business meals, auto and travel expenses, or startup costs.
Keep all your receipts for all your business expenses, and store them separately from your personal receipts. Organize your receipts by month and by the type of expenditure. If it's unclear what a receipt is for, make a note in your records to identify that expense. As mentioned above, qualified small business bookkeeping services can help make this easier for you.
- Overlooking Deductions
The IRS is not going to penalize you for not taking deductions available to you, but nor are they going to inform you of tax advantages you have overlooked. It's up to you to reap the benefits of whatever tax deductions you have available to you, which is why a tax advisor in Charlotte can be so invaluable.
- Missing Deadlines
Business taxes are due more frequently than personal taxes. As a small business owner, you must pay quarterly estimated taxes and, then, file a tax report annually to account for any overages or shortages. A tax advisor in Charlotte can take that on for you, so you can avoid the expensive penalties for failing to stay on top of it yourself and reap the benefits of training your undistracted attention on your more critical work at hand.
- Trying to do it all yourself
Perhaps the most common yet easiest small business tax mistake to make is thinking you can save a buck by filing your taxes on your own, when, in fact, you could be costing yourself more in missed tax advantages and inefficient use of your own time, energy and expertise.
Avoid all five of these common small business tax mistakes and many others with one simple move: calling Scott Boyar, CPA, licensed bookkeeper and certified tax advisor in Charlotte and the surrounding areas. Scott Boyar can help with all your small business bookkeeping and tax filing needs, freeing you to focus on those areas of your business that need you the most. Call Scott now at 704-527-2725 or visit him online at www.sboyarcpa.com.