Starting and running a small business is chock full of challenges and hurdles. There are so many components that make up a small business. Each component must be dealt with on a regular basis and dealt with properly and efficiently. One such component is that of understanding your small business taxes. Taxes of any kind do not make life easier, that’s for sure. There is much to understand when it comes to how business taxes work. When learning how to properly and effectively run your small business, there is much to comprehend and, therefore, mistakes are often made.
Common Tax Mistakes for Small Business Owners
Here at Tax Alternatives, our team of skilled professionals, wants to help our valued clients understand some of the common mistakes that can occur when preparing and filing your small business taxes. With that said, let’s discuss those mistakes you want to avoid.
- Listing yourself as the wrong business type – There are three different types of small business entities – sole proprietorship, a partnership or a limited liability company also referred to as an LLC. Each of these business types is faced with different tax laws and regulations. You want to be sure you can sustain your business based upon the business entity you identify as.
- Failing to pay your taxes or paying them late – Operating a small business is a great deal of work and often there are just not enough hours in the day to perform all the daily tasks and responsibilities. Though time can simply slip away, it is imperative that you make certain that your taxes are filed and are done so on a timely basis. Not paying your taxes or paying them late will lead to hefty penalties and fines, which you want to be sure to avoid. Be sure to make a calendar entry well enough in advance to remind yourself to file your taxes on time. If necessary, you can elect to file an extension. Whatever the case may be, just be certain you make the filing and do so on time.
- Claiming expenses on your tax forms that are not deductible items – Knowing and understanding which items are and are not deductibles can be a huge challenge for many new small business owners. The regulations and laws change routinely making it all the more difficult to differentiate from what is and is not a deductible item. If you claim multiple items that are not deductibles, you may find yourself faced with a tax audit. With that thought in mind, it makes good sense to put your trust in our team of skilled professionals to help you understand all the regulations and laws and to ensure that your taxes are filed properly. Our team of experts stands ready to meet your every need.
- Improperly identifying and deducting business startup expenses – Many of the start up costs of a small business are indeed deductible, but it is important to know that not all of the expenses can be deducted. The inability to differentiate which start up costs are deductible can lead to confusion and concern about the proper filing of your taxes. It may be in your best interest to rely upon our professionals to help you file your small business taxes correctly so as to avoid any red flags with the IRS.
- Failing to identify and list employees and staff members – If you have employees or outside contractors that you have hired, you must fully understand the laws with regard to these individuals. You want to be sure to properly identify employees based on the hours worked otherwise if you improperly identify them, or outside contractors, on your taxes, you may find yourself audited.
Bottom Line – You Can Trust Our Professionals
Here at Tax Alternatives, unlike so many other bookkeeping, accounting and CPA firms, our team of professionals is steadfast in meeting the individual needs of all our valued clients. We take pride in our high-quality services, our affordable prices and our overall commitment to the 100% happiness and satisfaction of each and every one of our clients. We offer free consultations and encourage open communication to allow for our team to have a complete understanding of both your concerns and business tax needs.
When it comes to preparing and filing your small business taxes, you can be confident when choosing our team of specialists that you are putting your trust into the hands of some of the absolute best in the industry. For more information on our top-quality tax services or to schedule a free consultation reach out to one of our dedicated team members today! Tax season is upon us, so be sure not to delay!