Tags: small business | tax | mistakes | 2017

5 Small Business Tax Mistakes You Need to Stop Making in 2017

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By    |   Thursday, 22 Dec 2016 07:44 PM

 

There are five simple steps all small businesses can take to avoid potentially costly tax mistakes.

Michael Burdick is the CEO of Paro, the outsourced finance and accounting department for small businesses, offered Forbes.com a handful of great advice:

Get an Early Start

Start the conversations with your accountant long before your returns are due (April 15th — or Sept. 15th for corporations and Oct. 15th for individuals, if you file for an extension). “Get on their good side and your tax accountant will be more likely to try to dig up some possible deductions to save you money,” Burdick said.

“Another thing you shouldn’t wait to do is remitting your estimated taxes. Individuals, sole proprietors, and S-corps filing at the individual level who expect to owe $1,000 or more in taxes need to be filing quarterly estimated taxes. The same goes for corporations expecting to owe $500 or more. Based on how much you owe, if you wait until filing time to pay the government, you’re more likely to be charged penalties and interest.”

Compile Your Own Financials

“If compiling your financials is cumbersome due to the poor shape they’re in, your tax accountant will likely charge a higher hourly rate just to clean them up. Your management financials must also be in good standing in order to make your tax accountant’s job easier (and cheaper). Work with an experienced bookkeeper every month to maintain your financials,” he said.


Filing Tax Extensions Every Year

“One of the biggest blunders I see business owners make is not learning from last year’s mistakes. Take the time to get it right and file on time.”

Don’t Mix Business and Pleasure

Avoid this situation from the beginning. Set up different bank accounts and credit cards for business and personal expenses.

Trying To Handle Payroll Liabilities Yourself

You should run your own payroll every cycle. It’s an excellent way to improve your financial knowledge and to understand employer vs. employee taxes, what the cost of a W2 vs. a 1099 contractor means, etc.

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There are five simple steps all small businesses can take to avoid potentially costly tax mistakes.
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2016-44-22
Thursday, 22 Dec 2016 07:44 PM
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