As a business owner, you have your hands full from the get-go. Regardless of how much help you have behind the scenes, ensuring things run smoothly and efficiently is an ongoing challenge. From recruiting and hiring employees to payroll and marketing efforts, you are responsible for the overall operation and success of your business, and this includes managing the finances and properly reporting taxes to the IRS.
Tax Mistakes That Can Hurt
When it is time to report your company’s earnings and expenses to the IRS, it is crucial to make sure you have all financial affairs in order, otherwise you run the risk of landing yourself—and your entire company—in hot water with the IRS. Consider the following examples of small tax errors that can mean big consequences for your business.
Neglecting to Work with a Professional
Many small business owners have good intentions when attempting to manage the company’s money and taxes on their own. However, this road can lead to risky loss. While it is true that a range of tax software is available to business owners looking to manage taxes on their own, that software is limited in what it can and cannot do.
The same goes for doing your own bookkeeping. Just because you are familiar with a program that helps you budget and keep track of your expenses does not mean you are a financial expert. At the end of the day, if your numbers are not adding up or you have made incorrect claims or deductions, you will need a professional tax attorney to defend you when the IRS comes knocking.
You can avoid a lot of trouble early on by working with a qualified accountant to help you budget and manage your money. It is also wise to establish a relationship with a knowledgeable tax law attorney who can address any questions or concerns you have in the event something goes wrong.
Meddling with Employee Withholding Funds
This tax mistake has liability written all over it. Some small business owners think they can get away with borrowing money from the funds reserved for employee withholding and social security, but this is not the case. Dipping into these funds makes you personally liable for the money you touch, and that means big ramifications for your business.
Whether you are missing out on tax breaks or you are claiming the wrong deductions, your business can end up losing money due to fees, penalties, or failing to claim deductions for which you are eligible. If you incurred travel expenses for a meeting, purchased a suit for your event, or had dinner with a potential client, you may be able to claim some of these expenses come tax season. On the other hand, if you attempt to claim certain deductions without first confirming whether or not those claims are permissible, your business can get hit later on during an audit, which can present a myriad of financial consequences.
If you are guilty of any of these common errors, it is important to speak with a competent Cook County tax law attorney before the consequences pose a serious threat to your business. Call the Law Offices of Eric G. Zelazny today at 708-444-4333 for a special consultation.