Barbara Schreihans, CEO and Founder of Your Tax Coach, discusses the common tax mistakes business owners make and how to avoid them. She points out that managing taxes can be challenging for business owners who are unfamiliar with the tax landscape, leading to potential financial costs like penalties, audits, and missed opportunities for savings.
One common mistake Schreihans highlights is not keeping accurate and complete records. Failing to maintain detailed records can lead to errors in tax filings, missed deductions, and complications during audits. She suggests using accounting software, keeping all receipts, and even hiring a bookkeeper to manage financial records to ensure accuracy and compliance.
Another frequent mistake Schreihans mentions is missing available deductions and credits. Many business owners are unaware of valuable deductions and credits in the tax code, leading them to miss out on potential savings. To avoid this, she recommends educating yourself on available deductions and credits, staying updated on tax laws and regulations, and seeking professional guidance to maximize tax benefits.
Schreihans also emphasizes the importance of professional tax guidance to avoid costly mistakes. Attempting to handle business taxes on your own can result in errors due to the complexities and ever-changing nature of tax laws. She suggests exploring free or low-cost resources for education and research and working with a reputable tax professional to develop a comprehensive tax plan tailored to your business.
By focusing on keeping accurate records, leveraging available deductions and credits, and seeking expert tax guidance, business owners can avoid common tax mistakes and ensure compliance with tax laws. Researching and learning about taxes may not be the most exciting task for owners, but it can ultimately save them money in the long run. Schreihans advises consulting with a licensed professional for specific advice concerning individual situations.
Overall, understanding and avoiding common tax mistakes can help business owners effectively navigate the complex tax landscape and optimize their tax outcomes. By taking proactive steps to educate oneself, utilize available resources, and seek professional guidance, owners can mitigate financial risks and maximize tax benefits for their business.
