howard, as you well know, a small-
business owner often wears many different
hats. You mAY have to wear your Boss Hat
one day, and your Employee Hat the next.
Then, when tax season comes around, you
may put on your Tax Hat.
Some small-business owners (SBO) think
of doing their taxes as just another item to
quickly cross off their to-do list, but taking
that approach could leave you open to
mistakes when filing and paying taxes.
Accidentally failing to comply with tax laws,
violating tax codes, or filling out tax forms
incorrectly, can leave you and your
business open to possible penalties.
The IRS encourages small businesses to
explore using a reputable tax preparer –
including certified public accountants,
Enrolled Agents or other knowledgeable
tax professionals – to help with their tax
situation. Filing electronically can also
help avoid common errors.
Being aware of common mistakes can
also help tame stress of tax time. Here
are a few of the most common tax-filing
errors according to the IRS…
#1. Underpaying Estimated Taxes
Business owners should generally make
estimated tax payments if you expect to
owe tax of $1,000 or more when your
return is filed. If you don’t pay enough tax
through withholding and estimated tax
payments, you may owe a penalty.
#2. Depositing Employment Taxes
Business owners with employees are
expected to deposit taxes you withhold,
plus the employer’s share of those taxes,
through electronic fund transfers. If those
taxes are not deposited correctly and on
time, the owner may be charged a penalty.
#3. Filing Late
Just like Individual returns, Business tax
returns must be filed in a timely manner.
To avoid late filing penalties, you should
be aware of all tax requirements for your
type of business and the filing deadlines.
#4. Not Separating Business
and Personal Expenses
It can be tempting to use one credit card
for all expenses especially if the business
is a sole proprietorship. Doing so can make
it very hard to tell legitimate business
expenses from personal ones. This could
cause errors when claiming deductions and
become a problem if either you, p ersonally
or your business is ever audited.
As we begin to approach tax season again,
those are a few tax tips the IRS wants you
to be aware of.
Helping THOUSANDS to SAVE a BUNDLE,
Dr. Ron Mueller, MBA, Ph.D.
Author, Speaker, Small-Biz Tax-Savings Coach
P.S.
Now is the perfect time to watch the
recorded web briefing posted at
www.DeductHealthCosts.com .If you take
the one action recommended, you could
be among the tiny percentage of small-
business owners to be able to legally
write-off ALL health-r elated expenses
incurred during ALL of 2020 for ALL of
the members of your family.
This is NOT ONLY for monthly premiums,
but ALSO for your massive Annual Deductible,
all co-pays and co-insurance, health expenses
that are not covered under your plan – even
many health and nutritional costs. This could
be your BIGGEST of all tax deductions in
2020, but ONLY IF you set-it-up NO LAT ER
THAN Dec. 31, 2019. Most sole-proprietors
and LLCs can qualify. Get the details at
www.DeductHealthCosts.com .
