"Many businesses make well-meaning but potentially serious errors that can create trouble with the IRS in the form of audits or tax penalties."
ASHBURN, Virginia (PRWEB) December 14, 2016
Many small businesses attempt to do their taxes in-house to save money. But without a tax accountant, they may not understand federal or state tax requirements. Many businesses make well-meaning but potentially serious errors that can create trouble with the IRS in the form of audits or tax penalties.
COMMON TAX MISTAKES
MAVENTRI reports that one of the most common mistakes it sees small businesses making on their taxes is spending money with an eye toward business deductions. The IRS must see evidence of a profit motive in the expenditure for it to count toward a deduction, which means that not all money you spend on the business counts.
Another common tax error MAVENTRI encounters is when business owners try to deduct personal expenses as though they were business expenses. Expenses such as home or apartment rent, groceries and personal travel can't be counted as small business expenses. If a small business owner uses items for personal and professional use (such as working out of a home office or using a car for both business and personal travel), it's important to keep track of time and money spent specifically on the business.
Many small business owners also assume their taxes are due on April 15, which is the day taxes are due for individuals and sole proprietor, Schedule C filers. But small business owners pay estimated federal taxes on a quarterly schedule, based on an estimate of what they owe for the tax year. Failing to pay taxes on this schedule may result in late fees.
To avoid common tax pitfalls, MAVENTRI advises hiring a tax accountant or IRS Enrolled Agent to handle taxes. Firms like MAVENTRI partner with local tax firms to make sure business taxes are handled thoroughly and professionally, at a price small businesses can afford. Additionally, there are many great softwares like Xero and it's add on apps available to help businesses stay on track and save time and effort when working on their taxes.
MAVENTRI is a results-driven business services firm combining accounting, marketing and technology — all to help businesses succeed without breaking their budget. The company stands out because of its energetic focus on technology and the solutions it delivers to its clients, who trust MAVENTRI with creating change and initiating growth in their businesses.