February 17, 2022
An essential element to small business owner success is accurate, and organized record-keeping and tax planning. This tax season, don’t become another statistic by making the same kinds of tax filing mistakes made by thousands of other small business owners across the nation. Continue reading to learn the most common types of small business owner tax errors, how to avoid them, and who to trust for qualified and experienced business tax planning and preparation in Central Indiana.
Although the spectrum of tax preparation and filing among small business owners is infinitely expandable, there are some small business owner tax errors that seem to be the most prevalent here in the United States. The top tax filing mistakes made by small business owners include incorrectly listing their business type, procrastinating on record-keeping until the last minute, going in the red with tax deposits and estimated tax payments, paying staff under the table or as independent contractors, and failing to take advantage of eligible tax credits and benefits.
One of the most common mistakes made by small business owners during tax season is inaccurately listing their form of business. So, it goes without saying that it is vital you list your business in its proper form when planning and filing your taxes. If your business is a limited liability corporation, be sure list it as an LLC. If your business is a S-Corp or C-Corporation, be sure list it as so.
Another very common mistake made by small business owners during tax filing season is waiting until the last minute to catch up on all of their books and record-keeping. It is vital that you stay consistent with all of your business’s expenses and keep all of your relevant records organized, including all receipts and expenditures, all year round. So, when tax season comes, you will be fully prepared and can commence your filing in a streamlined fashion.
It is normal for small businesses, especially in the first few years and operation, to be short on capital. These so-called penny-pinching years can sometimes cause small business owners to fall behind with tax deposits and estimated tax payments. Although this is a mistake that can sometimes feel unavoidable, it is critical that you do whatever you can to maintain consistency with your tax deposits and estimated tax payments. Once tax season comes, you do not want to be hit with a devastating and bankrupting tax debt.
Do not be tempted to evade payroll taxes by listing your employees as independent contractors or paying them under the table. Not only can this lead to criminal penalties, but your tax filing process will be significantly jeopardized. In the end, if you are caught, you will owe a devastating amount of restitution and can even be penalized further by the IRS and other governmental agencies.
As a small business owner, it is critical that you take advantage of every single tax credit and tax benefit that you are eligible for. Not only can tax benefits and tax credits significantly increase your bottom line, but it is pertinent to the overall success of your business. Talk to your local Indiana certified public accountant who specializes in small business tax planning and preparation to learn exactly which tax credits and tax benefits you are eligible for this year.
Are you looking for a small business certified public accountant who can help you plan and prepare for tax season? Contact Aspire CPAs, PC at 317-469-4500 to speak with a licensed accountant who specializes in business tax planning and preparation in Indianapolis, Indiana. You may also request an appointment, online.
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