How to Avoid Common Business Tax Mistakes
Filing of tax returns is essentialread more here for your business as it keeps you in check with the authorities. 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.
When filing business tax returns, there is always the possibility of oversight so always be careful. Illustrated below are tips to help you avoid possible business tax mistakes.
It is essential to always be sure of the tax return deadline to avoid late payment. Business can be taxing to the point that you forget to remember the deadline for filing your tax returnshomepage.
It is, therefore, necessary to have in your schedule a marked tax deadline to avoid late payment of taxes.
If you file your tax returns late, you are likely to attract a penaltyview here which will force to spend unnecessarily for ignorance. To avoid these penalties, you should have your secretary always remind you of the deadline.
Misclassification of employees is a mistake that every business should avoid. In a business, if you hire a contractor to do a job for you, make sure you clarify whether they are independent or permanent employees in your organization.
Also, whether it is a contractor or an employee, depends on how much control you have over them.
An employer always has control over their employees so make sure that you classify your employees and independent contractors separately. The payments should also be classified separately on the business’ tax return form.
You should also classify your business and personal expenses separately. 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? Mixing of the business and personal expense is likely to attract a penalty on your business.
It is necessary, therefore, to have a separate business bank account with its own business records.
Having separate business and personal credit cards will save you a great deal when filing business 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.