Tax Mistakes To Keep An Eye Out For
Written by Ken Gaebler
As the April 15 deadline for taxes gets nearer, small businesses would do well to avoid a few mistakes.
As April looms, small business owners are rushing to file their taxes before the deadline. However, in the hustle and bustle to get their forms in, owners will need to keep a wary eye out for a few mistakes.
According to Entrepreneur magazine contributor Karla Dennis, there are three common tax errors that can plague small business finance news.
First, Dennis highlights poor record keeping. Small business owners are responsible for so many tasks that it is folly for them to believe they can keep track of purchases and payments solely in their heads. Instead, businesses should consider using accounting software or working with a professional accountant to keep paperwork straight.
Secondly, it is relatively easy for owners to misclassify employees, especially if they are independent workers or virtual assistants, Dennis explains. Rather than classifying these individuals as payroll or labor costs (which can result in over taxation), owners should mark them as outside services on their tax returns.
Lastly, owners often make the mistake of believing their payments are due by the same date they are required to be filed - April 15. However, Dennis notes that business owners operate on a quarterly payment schedule - April 15, June 15, September 15 and January 15 - and missing any of these payment dates could result in an audit by the Internal Revenue Service.
While accountants can aid owners keep with bookkeeping duties, they can also help them make the most of state and federal tax credits, such as those provided by the Affordable Care Act.
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