It’s tax time, and with revised filing deadlines, small businesses must keep their business running and deal with filing taxes. According to Thumbtack, the 6 biggest tax mistakes small businesses make are:
- Mixing business with pleasure
- Not keeping good records
- Filing as the wrong type of entity
- Not claiming a home office deductions (or claiming too much)
- Failing to keep track of mileage
- Missing deadlines
Working with small businesses, I have seen all of the above. The easiest cure is to set up a good accounting and bookkeeping system. Most small businesses use QuickBooks, however, just using the software isn’t enough. You must set it up correctly in order to capture the right expenses, classify personal expenses, track mileage, etc. While working with a small business accountant may seem expensive, it is much cheaper than having to pay penalties, interest, and redoing tax returns that could have been filed correctly to begin with.