Many small business owners might put taxes on the backseat of their time and attention until IRS deadlines loom on the horizon.
That makes sense given most small business owners focus their attention on tasks like customer acquisition, servicing customers, balancing books, ordering products, managing employees—you know, those day-to-day business tasks.
However, taxes shouldn’t be a last-minute task. That last-minute rush to handle taxes can lead to failure to comply with tax laws, violating tax codes, or filling out forms incorrectly.
Incorrectly filing your small business taxes can open the door to possible IRS penalties.
That’s why the IRS recommends that small business owners consider using a professional tax preparer.
Below, we’ve gathered common mistakes small business owners make on their taxes.
Frequently Asked Questions about Four Common Tax Errors Made by Small Businesses
What Happens if a Small Business Underpays Estimated Taxes?
If small business owners expect to owe more than $1,000 in taxes when their return is filed, they should make estimated tax payments. Small business owners who don’t pay enough taxes through withholding and estimated tax payments may be charged a penalty.
What Happens if a Small Business Doesn’t Deposit Employment Taxes?
The IRS expects small business owners to deposit taxes they withhold plus the employer’s share of those taxes through electronic fund transfers. If a small business fails to deposit these funds correctly and on time they may be susceptible to an IRS penalty.
What Happens When a Small Business is Late Filing Taxes?
The IRS wants small business tax returns to be filed on time—just like individual returns. A small business owner or their tax professional should be aware of all tax requirements for the business and filing deadlines. Failure to make timely tax filings can incur late filing penalties for small businesses.
What Happens if a Small Business Owner Doesn’t Separate Business and Personal Expenses?
Many tax experts highly recommend separating business and personal expenses. This helps to organize legitimate business expenses from personal expenses. While the IRS doesn’t penalize small businesses for this, doing so can cause a business to make errors when claiming deductions. If those errors are found during a tax audit it may open the business up for penalties.
Consider Delegating Your Tasks to Business Solutions Unlimited
If you’re placing taxes on the back burner because of your other small business tasks, consider delegating. We understand your time is valuable and can help take some things off your plate.
If you’d like to explore the benefits of using a Virtual Assistant Firm, give us a call at (904) 429-4588 to see how we can help your business today.