Tips for Avoiding Common Business Tax Mistakes
To be at peace with the authorities, you should always file your returns on time. You should pay the taxes to avoid wrangles with the authorities.
Your business will operate without interference from the tax authorities if you have a good record of tax paymentcheck it out!.
When filing your tax returnswebsite, there are possibilities of mistakes that should be corrected early enough. One of the imminent mistakes is the late filing of returns which will attract penalties.
It is essential to always be sure of the tax return deadline to avoid late payment. Due to your tight business schedule, you rarely check the important dates on your calendar.
That is why just as you have a day for paying your employees, you should also include in your records the day for filing your returns to avoid late payment of taxes.
A business is normally penalized for late filing of returns which is an unnecessary expense. Your secretary can help you keep these records to avoid the late filing of returns.
Another common business tax mistake you should avoid is misclassification of your employees. It is essential to know the difference between an independent contractor and an employee in your organization.
Also, whether it is a contractor or an employee, depends on how much control you have over them.
You will always have limited control over an independent contractor so make sure you do not misclassify them or else you will be caught on the hook for a lot of money. Furthermore, once you have determined the difference, you should classify their paypage as well on your tax returns.
It is also advisable that you avoid mixing your personal and businesses expenses. Any person that fails to separate their personal expenses from the business expenses is likely to pay a penalty fee to the tax authorities.
In most instances do you find business owners paying for their expensesclick here for more from the same bank account as they consider it easier and quicker? You should avoid this since mixing of the expenses always results in an audit of your accounts.
It is necessary, therefore, to have a separate business bank account with its own business records.
It would be best if you open separate accounts to make it easy for you when filing tax returns. It would be best to keep records of all your expenses, especially when you choose to use a similar account for all your expenses.