Advice on small business tax mistakes to avoid

It has been said that an entrepreneur is someone "who works 16 hours a day to avoid working eight hours a day." The challenges and rewards of owing and running your own business can be substantial, and indeed can take much of your time. But it can be a costly error to become so engrossed in the day-to-day management of starting up and growing your enterprise that you neglect another key consideration: business tax matters.

Common small business tax mistakes can take two main forms: failing to maximize the allowable deductions and credits for both federal and state taxes, and mistakes that can lead to accusations that your business has not paid enough taxes (or worse, has been engaged in tax evasion activities). 

that your business has not paid enough taxes (or worse, has been engaged in tax evasion activities).

The IRS is not the only source of information on how you can avoid common tax-related errors for your business. The U.S. Small Business Administration can also be a source of advice on topics including:

  • Deductions that you can claim for business start-up expenses, meal and travel expenses
  • Ways to lower your audit risk by not exaggerating your deductions
  • Things to look out for in payroll deductions for companies that hire employees
  • Best practices for business recordkeeping

Even the most careful small business owner can still find himself facing inquiries or even an audit by the IRS or state tax authorities. If you should find yourself in this position, then seeking legal assistance from an Illinois law firm experienced with client tax representation should be something that you should undertake without delay.

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