If you are a small business owner, you must be aware of how much work one has to do when you are just starting out. Whether it is marketing, hiring, or carrying out daily operations, all these things require time and effort on your end. Furthermore, you also need to ensure that your tax matters are in check.
When you are filing taxes, and you end up making a mistake, you are most likely to miss out on a possible deduction. You may also end up owing more tax than you should have. However, there is good news for you: these mistakes can be avoided. In Louisville, a professional accountant can help you manage things better.
They can detect the areas where you are most likely to make mistakes and then accordingly come up with strategies to counter them. As a small business owner, you are already going to have a lot on your plate; thus, having a professional carry out some of your activities can reduce the burden. Contact a CPA in Louisville KY, to ensure accuracy in everything.
What are some of the typical business mistakes?
There are several common mistakes that small business owners are likely to make; let us look at some of them:
Filing taxes and making payments is crucial, but doing so all on your own increases the chances of errors. You might miss deductions that can reduce the costs. Even if you have been in a business line for a long time or are just starting out, the tax rules navigation is not easy in any scenario.
Business taxes are not easy to handle and can be pretty complicated. Thus, working with a CPA in such a case is the best option. Let us look at some of the common mistakes:
- Startup costs are deducted incorrectly:
When you prepare your own taxes, you are likely to make a mistake in deducting costs. Startup costs are deductible, but not all of them are. You might end up overestimating the expenses that are deductible. Startup costs are concerned with the amount that you put in in order to build a business and set it up.
There are various examples of startup costs, such as travel expenses, surveys conducted, etc. While there are misconceptions, you, as a small business owner, cannot deduct the entire startup costs in the beginning.
- Missing deductions:
Having a professional on your side can help detect all the possible areas where deductions can be made. Whether it is printing marketing material or postage stamps, they are deductible; thus, make sure you have the receipts with you. There are additional costs that you may make deductions on:
- Deductions on having a home office. However, make sure you have gone through the guidelines provided by the IRS.
- Expenses related to tax preparation.
- If you are using your vehicle to deliver some product, that is also deductible.
- Business meals, such as taking the client for dinner or lunch, are also deductible.
- Not classifying the staff correctly:
It is another common mistake that business owners are likely to make. There are independent contractors that business owners hire, as it can help save costs during tax season. You should know that if the contractors can only work for certain hours or are needed to work on-site, then they might be under regular employees.
The IRS has specific regulations when it comes to hiring contractors; make sure you have gone through them and understand them. Otherwise, you may find yourself under severe tax-related penalties.
A CPA can help you avoid such mistakes!
Assistance from a CPA can provide insight into your business and help you avoid common mistakes. They can manage those tax filings and various other things for you.
Since they have been in this line of work for years, they know what they are doing. You can focus on increasing the profitability of your business while they take care of other business-related activities.