Ways of Avoiding Common Business Tax Errors
Payment of tax is important to any business as it keeps the authorities off your back. If you want to avoid brushing shoulders with the tax authorities, you need to file your tax returns on time.
As a business with a permit, ensure that your taxes are paid on time for successful operations.
In most circumstances, there can be errors during this process and a business owner should make sure that they correct them as quickly as possible, or else they’ll attract penalties. One of the imminent mistakes is the late filing of returns which will attract penalties.
It is common to make business tax mistakesclick for more that’s why you should be very careful. You should read this article if you want to avoid the common business tax mistakes.
The first thing you should do is check the deadline for filing the returns. As a business person, it is hard to always find time to check certain matters about your business because of your tight schedule.
It is essential to organize yourself and keep in mind the deadline for filing returns just as you have the date for paying your contractors.
You will be forced to pay a fine for late payment of taxes. Your secretary can help you keep these records to avoid the late filing of returns.
Misclassification of employees is a mistake that every business should avoid. It is essential to know the difference between an independent contractor and an employee in your organization.
One way of determining whether the hired individual is an employee or not is through the control you have over them.
You will always have limited control over an independent contractor so make sure you do not misclassify them or else you will be caught on the hook for a lot of money. 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. Any person that fails to separate their personal expenses from the business expenses is likely to pay a penalty fee to the tax authorities.
In most instances do you find business owners paying for their expensesclick here for more from the same bank account as they consider it easier and quicker? You should avoid this since mixing of the expenses always results in an audit of your accounts.
To avoid the audit process, you should always have a separate account for both your business and your personal expenses.
You should have a separate business account from your personal account to make it easier when filing the returnsmore. If you choose to use the same credit card for both personal and business expenses, you should make sure you have the records of each expense.