Starting a business has a lot of complexities. One of them is taxes. A lot of new and small businesses attempt to do their own taxes without any help, and this can lead to all kinds of pitfalls. Here are some of the biggest problems, liabilities, and mistakes that you might not be aware of during the year:
RISK #1 You End up Missing the Deadline. Remember that you will have to pay interest and a late payment penalty if you miss the deadline.
RISK #2 You Didn’t Pay Enough Estimated Tax. Some businesses will worry about federal estimated tax and then completely forget that they may also have to pay estimated tax to the state.
RISK #3 You Didn’t Keep Proper Track of Expenses. Not deducting things you can deduct can cost you and deducting something you are not entitled to can be even more expensive.
RISK #4 You Used Your Personal Bank Account for Business. You should put all business income into the separate account, use a separate credit or debit card for all business expenses, and avoid using personal cash as much as possible.
RISK #5 You Did Your Math Wrong. You can lose out on deductions by calculating expenses wrong (or even dropping/forgetting about an expense), or flag an IRS audit.
RISK #6 You Missed a Crucial Change in the Tax Law. Many of these changes don’t affect businesses that don’t have employees or who don’t sell out of state but something can crop up at any time that either increases or decreases your tax liability.
All of these problems are best mitigated by hiring a bookkeeper who will work with your tax preparer to help reduce some of the hassles and worry during tax season. The bottom line is that you need a bookkeeper if you want to run your business properly and keep your finances from becoming an unmitigated disaster and ultimately help you manage your business with a clear head.
Send us a message today – Diane@precisebooksandtax.com – to help you get on track for success this upcoming tax season!
Or set up a FREE consultation with us today to learn more about our bookkeeping services.