It’s every small business owner’s nightmare to be fined by the IRS. With tax season just around the corner, the professionals at ASC Payroll in New York City are already gearing up for their busiest time of year. With over 60 years in the business, the experts at ASC Payroll know exactly where small business owners should turn their attention come tax time if they want to avoid penalties.
Here are three straightforward tips to ensure that you (and your business) get through the tax season without any unpleasant surprises:
- Keep Records of Everything: Many businesses that incur fines from the IRS do so because of failure to report all earnings, or an inability to prove claimed deductions. Oftentimes, this is not the result of intentional deception, but a result of poor organization. However, the IRS does not care about intent and will fine you even if it is just an honest mistake. Cover yourself by keeping evidence of all earnings and deductions.
- Keep All Payroll Taxes Collected Separate From Other Money: Many smaller businesses combine collected payroll taxes with the business’ primary accounts. It's illegal for them to use any money collected for taxes for anything but their original intent. To avoid accidental misstep in this area, it's best to keep all collected taxes together in a separate account, so that you can easily keep track of things.
- Never Be Late: This might seem obvious, but a shocking number of businesses are fined every single year for simply submitting their taxes after the deadline. If you owe taxes, the IRS is fully within their rights to hold you accountable as an individual. If you delay long enough, you may even be charged with failure to pay taxes, which is a federal offense. Save yourself the stress by filing on time.
Always remember that if you’d rather be safe than sorry, you can employ a tax professional to help answer all of your questions. For help getting your documents in order, or to learn more about payroll services and the common tax pitfalls for businesses, call ASC Payroll at (212) 684-0800.