How to Avoid Common Business Tax Mistakes
Filing of tax returns is essentialread more here for your business as it keeps you in check with the authorities. You should pay the taxes to avoid wrangles with the authorities.
As a business with a permit, ensure that your taxes are paid on time for successful operations.
Any business tax mistake that might occur when filing your tax returns should be rectified as quickly as possible. For instance, filing late returns can attract consequences.
As a business owner, you should be careful when making tax payments to avoid possible business tax mistakes. Illustrated below are tips to help you avoid possible business tax mistakes.
The first thing you should do is check the deadline for filing the returns. Due to your tight business schedule, you rarely check the important dates on your calendar.
It is, therefore, necessary to have in your schedule a marked tax deadline to avoid late payment of taxes.
You will be forced to pay a fine for late payment of taxes. To avoid these penalties, you should have your secretary always remind you of the deadline.
Another common business tax mistake you should avoid is misclassification of your employees. Always make sure that when you hire a contractor, you classify them accordingly.
How much you control a contractor will tell whether they are employees or independent contractors.
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. You should also make sure their salaries are classified separately when filing tax returns.
You should also classify your business and personal expenses separately. This can be a real mess up and will cost you a lot of money to rectify.
Many people are fond of paying for all their expenses using the same credit card as it seems easier that way. Mixing of the business and personal expense is likely to attract a penalty on your business.
To avoid the audit process, you should always have a separate account for both your business and your personal expenses.
You should have a separate business account from your personal account to make it easier when filing the returnsmore. But in case you are using the same account, make sure you have the records right.