What tax mistakes are you accidentally making?
Small business owners already have a lot on their plate when it comes to running their service. But even when doing everything with good intentions and by the book, there are many tax rules that can trip up a business owner and potentially cause legal issues if not complied, even if by mistake. To avoid this, entrepreneur Bill Murphy explained in a recent Inc.com article what to look out for when filing business taxes.
First, he said, not turning over payroll taxes can get any business in hot water. Murphy explains that many small businesses struggling with finances may use the funds that were intended for the IRS for other expenses, to keep their businesses running, and plan on figuring out what is owed later. Unfortunately, this practice often results in both legal trouble and more money owed overall. To prevent this, small businesses should keep strong records, whether through a 1099 processing service or document scanning service, to both keep up with businesses expenses and to ensure that all payroll taxes are accounted for.
Murphy also says it’s easy to confuse personal and business expenses when deducting for tax purposes. Again, keep strong records to make sure all expenses are accurately categorized can help a small business owner both save money, by not leaving out any deductibles, as well as avoid legal trouble.
Lastly, Murphy says a new internet tax law currently awaiting approval in the House of Representatives could also trip up small businesses. The new law would require internet sellers to pay a tax, instead of the current buyers.
In all, most small businesses can’t afford to lose funds over tax mistakes. With good records and 1099 tax processing services, businesses can ensure that they aren’t accidentally breaking the law when filing business taxes.
Tab Service Company is a Chicago based company with over 53 years of experience as a data processing service provider. We provide business with outsourcing solutions for 1099 processing services. As an SOC2-approved service organization, we apply industry-best practices to our approach with clients.