As April 15 looms large, many small business owners scramble to get their taxes done or file an extension. If you’ve already filed your taxes, give yourself a pat on the back. For everyone else, there’s still time to get it done—and lots of resources to help you. If you’re being overtaken by a sense of dread or procrastination, put that aside and get going!
First stop: the American Institute of CPAs (AICPA). The institute says that while many small business owners think of one word—confusion— when they think of having to organize and file federal taxes, there are really 10 words you need to know. Why are they important? The AICPA says these 10 words will help ensure that you do not pay more taxes than you’re required to pay. If that doesn’t get your attention, nothing will!
The 10 words are deceptively simple, but behind them are critical concepts every small business owner should embrace. The ‘terrific 10’ include:
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The NFIB (National Federation of Independent Business) also offers some good tips grounded in common sense. These include making sure you have all the correct forms, using a computer for your taxes, being sure you double check your return before filing it—and most of all, filing an extension if you’re just not going to make the deadline.
Meanwhile, CBS News MoneyWatch reports on The 10 Small Business Tax Mistakes That Will Cost You.
Beginning with I can do it myself, a lot of these common mistakes are going to sound pretty familiar.
Some may surprise you, like Yay! A big fat refund or my bookkeeper would never steal from me. Sorry and sorry, but yes, getting back a big refund signals that you’re having too much deducted throughout the year—and giving the government the use of your money tax free. And yes, many small businesses fail to have checks and balances built into their financials, often with unhappy surprises.
If you’re still not convinced of the pitfalls that lurk along your tax-preparation path, check out this great infographic from Intuit. It shows not only some of the most common tax errors made by small business owners, but also some of the reasons why taxes are so challenging for small businesses. Some reassurance: According to this infographic, because IRS rules are so complex and always changing, the majority of small business owners wisely get help, in the form of either a professional or software program. Only 13 percent still handle their taxes themselves, at their own peril.
Image courtesy of Stuart Miles / FreeDigitalPhotos.net
