No one likes to deal with taxes, perhaps except for tax resolution specialists and tax professionals. However, if you’re running a small business, you have many tax responsibilities to uphold! Apart from providing quality products or services, filing your taxes correctly and on time is crucial to your company’s success!
If you want to grow your business, you must make sure to avoid making these tax mistakes:
1. Writing off All Startup Expenses at Once
Since you’ve only just launched your company, you won’t have much taxes to take care of, so you’ll have a lighter burden than established businesses. However, this doesn’t mean that you won’t have to pay a dime for taxes—you’ll be setting yourself up for a mountain of tax problems if you get the wrong idea!
What many small business owners get wrong is that they write off all of their startup expenses at once. While you can write off your startup expenses and save a lot of taxes, you must keep in mind the limitations the IRS has set for initial startup cost deductions.
Small business owners can only deduct up to $5,000 of their startup expenses in the first year; everything beyond the limit must be amortized over 180 months. Although there’s no going around IRS rules, you can maximize your deductions by writing off the total $5,000 and spread out the rest with the help of an accountant.
2. Not Keeping Records of Every Expense
When we say that you should record every expense, we mean it! Every bill, invoice, or receipt that you have must be kept safely and recorded, or else you won’t be able to deduct the taxes you owe!
Unfortunately, when running a small business with one or two people, keeping good records can be challenging. Given the mountain of responsibilities you have to fulfill, recording your expenses seems like a task you don’t need to prioritize.
However, if you mistakenly overlook your records, you’re bound to have a few tax problems! To help you keep track of your receipt, we recommend using a digital accounting tool to auto-fill expenses from uploaded images and store your data in the cloud.
With a reliable record-keeping system, you’ll feel confident in accurately deducting and submitting payroll taxes!
3. Failing to Pay or File On Time
Every business owner knows how daunting taxes can be, but this doesn’t mean that you should avoid them. Although we understand the weight of tax responsibilities on top of running a business, you shouldn’t forget to pay and file your taxes before the deadline, or you could lose your business!
If you don’t want to encounter tax problems, make sure to leave the filing to a tax professional. Meanwhile, a tax resolution specialist can help you clean up the jumble of tax mess you’re in and get you back on track. With the right help, you can get on top of your taxes and run your operations smoothly!
Taxes are unpleasant, but as a small business owner, they’re now an essential part of your life! Depending on how properly you handle your taxes, you could either grow your business or lead it to failure. However, as long as you work with the best professionals in the accounting and tax field, you’re sure to grow and scale up your business over time without any problems!
Are you having difficulty dealing with your tax problems? Then, leave the job to our trusted tax resolution specialists at Axiom Tax Resolution Group! You can rely on us to analyze your circumstances and find the best way to proceed in your case. Call us now at 205-872-1100 to learn more or request a consultation online.