Doing taxes is typically a task most people dislike. It becomes even more cumbersome for new and/or small business owners, who are oftentimes found managing all aspects of their day-to-day operations. Taxes might not be as daunting to some business owners as others, but attention to such task is imperative to avoiding mistakes that can be costly. Tax errors, including failing to comply with tax laws, violating tax codes, or incorrect or inaccurate forms can lead to penalties.
Here are some of the most common tax errors committed by SMBs and simple solutions to avoid them.
Estimated taxes are generally for business owners who expect to owe $1,000+ upon filing their taxes. If business owners lack the funds through withholding and estimated tax payments, they could be subject to a penalty.
Business owners are expected to deposit employee withheld taxes and their share of those taxes through electronic fund transfers. It is crucial to ensure accuracy of the forms, means of transferring, and timing of delivery, as any error in those three components can result in penalties.
As with personal taxes, if a business owner files their business tax return late, they are subject to a penalty. Business owners should also familiarize themselves of all tax requirements for their business tax return.
Personal vs. Business
To avoid confusion between valid business expenses from personal expenses and ensuring accuracy of deductions, business owners should file their personal and business tax returns separately. This can assist in preventing audits and errors.
Investing in a reputable tax preparer or tax management company such as QBS can give you the support you need in filing your business taxes. From quarterly state and federal reporting to withholding and unemployment management, QBS offers comprehensive solutions for tax reporting and tax management for businesses of all sizes. We understand how complex taxes can be, so we value your investment and trust in us to assist you in minimizing your liabilities and maximizing your savings. Contact QBS today to jumpstart your tax season with confidence.