Tax time is never fun. As a small business owner, there are a lot of rules and regulations you have to follow and adhere to at all times. The last thing you want to do is end up making a costly tax mistake that could end up costing you far more out of pocket than what you needed to spend. You worked hard to build your business up, so you deserve all of the tax breaks you can get. To make sure you get through tax time as unscathed as possible, avoid making one of the three mistakes below.
Not filing on time.
The way your business is structured will determine the proper tax forms to file. Sole proprietorships have to file Form 1040C, which is due on April 15th. An S-Corporation has to file Form 1120S, which is due earlier on March 15th. Because of the different classifications and forms available to file, it is important that you have a trusted professional working on your side to make sure the right forms get filed when they need to be. Not filing the proper forms could land you with a monthly charge from the IRS. Not paying your taxes at all will land you with even more charges on top of the balance due.
Not taking the proper business deductions.
There are a number of different things that you are eligible to deduct on your business income taxes. You can deduct just about anything that is necessary for you to operate your business. Things like rent, office supplies, taxes, utilities, insurance, gas, oil changes and so on are all eligible expenses that you can write-off on your taxes. Another huge one you don't want to miss out on is depreciation for any assets. However, you don't want to claim anything that isn't related to the operation of your business. That could land you in trouble for tax fraud.
Not keeping accurate records.
Above all else, make sure you have accurate records of anything you do at your business. Good records allow you to detail all expenses, maintain payroll, minimize legal errors and manage your inventory. Being organized is the key to keeping everything in order. This makes taking deductions and filing your business taxes quick and simple.
By not making one of the mistakes above, you can save yourself a lot of time and hassle in the long run. To find out more, you can always enlist the help of a small business accounting professional, like Don Lamb CPA Inc P.S.