Costly Tax Mistakes to Avoid

Any bookkeeping, business or tax article contained in this communication, including attachments and enclosures, is not intended as a thorough, in-depth analysis of specific issues, nor a substitute for a formal opinion, nor can it be used to avoid tax-related penalties. If desired, we would be pleased to perform the requisite research and provide you with a detailed written analysis. Such an engagement may be the subject of a separate engagement letter that would define the scope and limits of the desired consultation services.

Costly Tax Mistakes to Avoid

March 8, 2020

No one wants to pay more than what’s necessary. As a business owner, you need to be practical with your expenses to ensure you have enough funds for the business operation.

Here are four mistakes you need to be aware of to avoid penalties:

Not Paying Taxes as You Earn Income

Earning compensation saves you from the stress during tax filing. Your employer withholds an appropriate amount based on what your completed W-4. However, if you are self-employed, the responsibility of remitting taxes falls on you. The IRS requires you to report and pay quarterly estimated tax.

Failing to File Returns on Time

You need to file your tax return even if you haven’t paid your tax bill in full yet. For an individual taxpayer, the income tax return is due on April 15^th or the next business day when the 15^th falls on the weekend or holiday. For partnership and S Corporation, the deadline is March 15^th. If you need more time to prepare your tax return, you can file an extension and this must be filed before the due date of the return.

Not Maximizing the Deductions and Credits You Deserve

As a business owner, you must be vigilant of ways to reduce the amount of tax you owe. Dig all business-related expenses that entitle you to claim as a deduction to your taxable income.

When doing this, remember to hire a tax expert like an Enrolled Agent, to guide you about properly claiming tax credits and deductions.

Doing It Alone

Managing a new business requires you to wear many hats. It involves taking up roles to avoid too many expenses. For example, instead of hiring a professional, you took upon yourself the responsibility of filing your tax return. Tax rules are very complex and it is worth the investment to hire a professional to help you.

An Enrolled Agent is a federally-licensed professional that can help you through this tax season. You can always do your research and find the right one to help you out with your returns. Investing in hiring someone that can help you avoid costly mistakes is better than paying penalties on mistakes that should have not been made in the first place.

If you need help to avoid these costly tax mistakes, call FAS today and let our Enrolled Agent guide you! Contact us today at admin@fas-accountingsolutions.com or 832-437-0385.