No one enjoys tax season, and small business owners usually dread it more than most. As your business grows, so do the complexities of your returns, creating nearly limitless opportunities for small mistakes with potentially serious consequences. As you prepare to file, take some time to avoid these common business tax preparation mistakes.
Forgetting Start-Up Expenses
Did you just get your business off the ground last year? If so, remember to deduct all of your business expenses, even those you incurred before opening the doors. Filing fees, inventory, raw materials, and advertising can add up quickly, so deducting these costs can significantly reduce your tax liability.
Neglecting Mileage Deductions
While you can't deduct the cost of driving to your office, you can write off miles spent meeting with clients and vendors. Also, bear in mind that you can deduct much more than just the depreciation of your vehicle. Portions of what you spend on oil, insurance, payments, repairs, parking, and tolls can also be considered a business expense.
Trying to decrease your tax burden by inflating the amount of your businesses expenses will often trigger an IRS audit. Don't claim deductions you can't prove. Better still, consult with a business tax preparation professional who will ensure that your returns are completed accurately, without the kind of mistakes that can lead to big penalties later.
Forgetting Other Taxes
Many business owners concentrate on their federal income taxes, at the expense of their other obligations. For instance, don't forget to stay on top of your local property taxes, self-employment taxes, and any other that might apply.
The business tax preparation professionals at RKB Accounting & Tax Service LLC in La Crosse, WI, know how intimidating the tax code can be, which is why they're committed to guiding every client through each step of the process. For more information, follow them on Facebook for more tax advice, visit their website to learn more about what sets this unique team apart, or call (608) 782-6433 to make an appointment.