Filing taxes for your small business can be much more complex than you expect. Many small business owners discover this the first time they try to handle their taxes themselves. Taking care of tax preparation with a professional tax service can help you avoid many of the mistakes small business owners frequently make while filing taxes, such as the ones below.

Common Small Business Tax Preparation Mistakes to Avoid

1. Missing the Deadline

The tax filing deadline for your business is April 15th of each year. When you miss it, the IRS will give you a 5% penalty for each month that you’re late. If you don’t pay your taxes on time, you’ll be charged a late penalty along with a 6% interest fee on what’s owed. Get started on your tax preparation early — preferably in January — so you have plenty of time to gather all your receipts and information. If you have trouble getting everything finished by the deadline, file an extension and confirm that you’ve paid the taxes required by the due date.

2. Overlooking Payroll Records

Whether you have 30 employees or half a dozen, accurate payroll records are essential. Unfortunately, they’re often overlooked. Work with an accountant to keep those records organized and have each employee classified correctly. This will avoid IRS penalties and make tax season much easier when it comes around.

3. Mixing Business & Personal Expenses

As a small business owner, the line between business expenses and personal ones can be tough to maintain. This is why detailed records are so important. If you use your car for both business and personal use, for example, you can deduct the mileage used for business purposes. Keep a separate bank account for business expenses, and you’ll find that separating those deductions will be much easier.

Filing taxes properly will save you a lot of money and time, which is why it should be left to America’s Favorite Insurance & Tax in San Antonio, TX. These tax preparation experts are knowledgeable about small business needs and relevant tax codes. They’ll provide all the resources you need to get every deduction possible while avoiding common mistakes on your business income tax return. Learn more on their website and schedule an appointment at (972) 662-8221.