Most Common Tax Mistakes Small Businesses Make
Merriman Tax Services
There is just so much to remember as a small business owner, and, frankly, so much to learn that it can all be very overwhelming. Plus, given the fact that you are intricately involved in the day-to-day operations as well that other areas that are not client-facing can take a back seat, such as your accounting.
Merriman Tax Services offers the best bookkeeping, tax preparation services, and payroll solutions for small to medium-sized businesses. Our cloud-based accounting firm has years of experience helping you not only with your small business back office accounting needs, but also helping you focus on growing your business. Below, we'll review some of the most common tax mistakes we see small businesses make. Contact us to get started today!
MOST COMMON TAX MISTAKES SMALL BUSINESSES MAKE
Misreporting income in various fashions is a common mistake we see small businesses make. Not only is this a common mistake, but it can also be a costly one as well. If you're an independent contractor, Form 1099-K shows what you've been paid. The IRS receives this information when one is filled out and filed, so you could very well be underreporting your income. The trend towards virtual currency is being investigated more by the IRS as well. This income has to be reported. In addition, small businesses over report their income — one mistake the IRS will not tell you about.
Mixing Your Personal and Your Business Funds
When you mix your personal and your business funds, you are inviting mistakes to be made. Not only is this harder for your cloud-based accountant to figure out, but it increases the chance of business expenses being missed for deductions, as well as personal income being counted as business revenue. This increases your taxes as well. It's always best to have separate accounts and keep all monies separate as well.
Not Paying All Applicable Taxes
There are consequences for not paying your small business taxes, such as penalties, fines, and late fees. However, most of the time, not paying taxes is inadvertent — simply due to the fact small business owners did not realize they either had to pay the tax in the first place or they thought it had already been paid. For example, sometimes the business owner forgets to pay the state the sales tax it collected from customers. Most small business owners also have to pay taxes on a quarterly business. Many simply forget to do so. Having a tax accountant by your side who can handle these payments for you will ensure your taxes are paid on time. Call us to learn more today.
Merriman Tax Services excels at your small business accounting needs. Our cloud-based accounting services allow you to have real-time access to your financial records. We can handle your quarterly submittal of taxes, as well as your payroll needs. We maintain a close working relationship with you so you can feel comfortable asking us any question you may have and so that we can understand your business better, which allows us better customer service.
If you are looking for a comprehensive business accounting solution, contact us to get started today!