July, 2023 » Brock CPA

5 Common Tax Mistakes Made by Small Businesses

Running a small business comes with a myriad of responsibilities, and managing taxes is certainly one of them. Navigating the intricate world of tax regulations can be a challenging task for many business owners, and mistakes in this realm can have significant consequences. Common tax mistakes made by small businesses include inaccurate recordkeeping, misclassifying workers, overlooking tax deductions and credits, failure to separate personal and business expenses, and missing deadlines and filing errors. Poor recordkeeping can lead to incorrect reporting and potential IRS audits, while misclassifying workers can result in penalties and legal disputes. Small businesses often miss out on valuable deductions and credits by not staying informed about available tax breaks. Blurring the lines between personal and business expenses raises red flags and creates confusion during tax audits. Missing deadlines and making filing errors can lead to penalties and interest charges.