When it comes to running a successful business, staying on top of all your finances is key. Unfortunately, handling many of these financial aspects can be quite complicated. Tax and audit services, for instance, can lead to all kinds of problems, including financial and even legal stress.
The International Revenue Service (IRS) can audit any business tax return within three years of filing, and can also collect back taxes owed for up to 10 years. That’s why it’s imperative to stay on top of these important financial aspects and handle them accordingly and timely.
Here are some common business tax mistakes that you should avoid at all costs:
- Making Minor Errors — Even the simplest of tax errors can cause major concerns. From mathematical errors to incorrect social security numbers, making these mistakes could result in increased IRS scrutiny and possible fines. When filing your taxes and handling your finances, be sure that you’re as accurate as possible and are double and triple checking your work.
- Not Consulting with an Experienced CPA Firm — Accounting firms are staffed with plenty of experienced professionals who are fully aware on how to properly handle every financial aspect of a business. If you attempt to do everything by yourself, unless you’re well versed in business taxes and regulations, you could find yourself in some serious trouble. Working with CPA firms can help avoid some of those costly complications.
- Claiming Losses on Hobby Expenses — Business loses need to be included, but many business owners also list their personal and hobby business losses — that’s not allowed. Make sure that everything you’re claiming on your taxes is directly related to your actual organization.
- Not Making Tax Payments a High Priority — The best way to avoid these legal complications and financial disasters is to stay on top of all your payments. If you don’t make paying your taxes a priory, it can ruin your business. When it comes down to it, if you only have enough money to pay either the IRS or keep your company building’s lights on, you should pay the IRS.
If you want to learn more about how to better handle your company’s taxes and finances and work with a trusted CPA firm, give CST Group a call today.