The last thing you want to do is make a tax mistake as it relates to your small business. Not only can this cost you a lot of money, but it can also take time to get things back in order.
While most small business owners find it impossible to understand every aspect of the tax code, there are a few key details you can pick up on that can help you avoid trouble in the future.
Here are some of the most common small business tax mistakes:
- Forgetting to properly deduct startup costs
- Overlooking the ability to maximize your medical expense reimbursement plan
- Neglecting to keep your small business finances and personal finances separate
- Choosing the wrong type of business structure, such as an S Corp instead of an LLC (or vice versa)
- Neglecting to pay your taxes on time
As you can imagine, one or more of these mistakes has a way of dragging down your small business.
For example, if you neglect to pay your taxes on time, the IRS will begin to charge interest. So, when you finally get around to paying what you owe, your tax bill will be much higher.
It is not always easy to avoid these common small business tax mistakes, but you need to do your best to stay on the right track at all times.
Once you understand what’s required of you and the basics of how the tax system works, it’s much easier to settle into a routine that allows you to make informed decisions each and every month.
Source: Quickbooks, “5 Major Small Business Tax Mistakes to Avoid,” accessed Oct. 11, 2017