The Most Common Tax Mistakes Small Businesses Make
August 15th 2015 at 4:22pm Published by firstdownadmin
Small business owners, if they are new to the world of business management, happen to make numerous mistakes. These mistakes can have varying repercussions based on the gravity of the damage, but there are certain tax mistakes that can harm you in ways more than one.
As a business you have to be extremely responsible when it comes to the tax that you are filing. You should make sure that there are no errors whatsoever in the entire proceedings and you are able to manage your tax filings in a manner that you want.
Tax is an entire component of business management. You have to hand over a due amount to the relevant authorities, and should make no errors while doing so. Even if you are going through a cash crunch or liquidity crunch of sorts, you should make sure that you take small business funding if the need be and file your taxes properly. Any alterations or neglect in the tax filing procedure can harm you in a negative manner.
If you want to stay safe from making silly mistakes here, you have to learn from the example of businesses before you. Some businesses before you have made common tax mistakes, which shouldn’t be repeated by you.
Here we mention all of these tax mistakes so that you are able to stay safe from them:
Not Keeping Good Records
You need thorough and authentic records, so that the returns you prepare are accurate. Your returns would never be accurate, if the records you’re keeping aren’t authentic. As a responsible business owner you need to realize just how important it is for you to focus on bookkeeping and maintain every entry in the book.
Not maintaining entries where they should be can lead to overstating or understating the profits and both can have certain legal and financial implications.
Over Reporting Income
Be it by mistake, or intentionally, you wouldn’t want to over report your income at all. Most businesses end up over reporting their income when they include the sales tax in the income they make from the sales. The sales tax you get from your daily sales shouldn’t be made part of your returns. This is a genuine oversight that can increase your tax dues.
Not Meeting Deadlines
Not meeting deadlines or not complying with tax regulations can have a certain impact on your business. The impact can stop you from getting the kind of results you want and expect from your business. As a small business startup, you surely wouldn’t have the kind of time to have on your hands to entertain a legal case for not meeting your tax deadline. Make sure you have some legal help to help you avoid all these mistakes.