How to Avoid Common Business Tax Mistakes
Payment of tax is important to any business as it keeps the authorities off your back. You should pay the taxes to avoid wrangles with the authorities.
Your business will operate without interference from the tax authorities if you have a good record of tax paymentcheck it out!.
When filing your tax returnswebsite, there are possibilities of mistakes that should be corrected early enough. For instance, filing late returns can attract consequences.
As a business owner, you should be careful when making tax payments to avoid possible business tax mistakes. Illustrated below are tips to help you avoid possible business tax mistakes.
The first thing you should do is check the deadline for filing the returns. Due to your tight business schedule, you rarely check the important dates on your calendar.
That is why just as you have a day for paying your employees, you should also include in your records the day for filing your returns to avoid late payment of taxes.
You will be forced to pay a fine for late payment of taxes. To avoid these penalties, you should have your secretary always remind you of the deadline.
Another common business tax mistake you should avoid is misclassification of your employees. Always make sure that when you hire a contractor, you classify them accordingly.
How much you control a contractor will tell whether they are employees or independent contractors.
An employer always has control over their employees so make sure that you classify your employees and independent contractors separately. You should also make sure their salaries are classified separately when filing tax returns.
It is also advisable that you avoid mixing your personal and businesses expenses. This can be a real mess up and will cost you a lot of money to rectify.
Many people are fond of paying for all their expenses using the same credit card as it seems easier that way. But there are consequencesthis site for such when you have to pay taxes.
It is necessary, therefore, to have a separate business bank account with its own business records.
It would be best if you open separate accounts to make it easy for you when filing tax returns. It would be best to keep records of all your expenses, especially when you choose to use a similar account for all your expenses.