Let’s face it—taxes are intimidating. When thinking about tax time, sometimes doubts and fears rise to the surface. Business taxes, especially, involve a lot of moving parts, changing regulations, and minute details to consider.
Like most fears and anxieties, tax fears can best be addressed with trustworthy help and support. A true business advisor–someone who does more than just file your taxes–is the best possible resource when it comes to navigating what otherwise might be a rocky landscape. Someone who takes the time to understand your unique business can spot opportunities and potential pitfalls before they cause problems.
Avoiding common business tax mistakes
You’re great at what you do, and your customers rely on you for knowledge in your area of expertise. However, no one expects you, as a business owner, to be an expert in tax codes, accounting, and specific processes involved in business tax filing. On the other hand, that is your business advisor’s specific area of expertise, and you should be honest about your questions and concerns so they can help you.
Common mistakes such as overreporting income, not applying proper limitations to business expenses, forgetting carryovers, and not filing specific forms and schedules with your tax return might seem like catastrophic errors to you. The best way to avoid these mistakes? Ask for help along the way, and your tax professional can help you make sure everything is in order.
That said, if you’ve made one of these mistakes and need help correcting it, your advisors at FMA C.P.A. can help you sort things out and put you on a better path for next year.
Navigating an audit
There’s nothing more terrifying to a business owner than an audit. Even if you have nothing to hide, it can feel extremely invasive and embarrassing to have all of your business’s financial records put under the microscope. If you’re worried about being audited or if you’ve recently been alerted about an audit, communicate with your business advisor. Chances are, they’ve helped others through these types of situations, and they have the experience to take the fear and shame out of auditing.
Your tax professional will be able to tell you exactly the auditors will need to see and help you get all of your files in order so that the audit goes smoothly. If you have one business advisor and tax accountant, they will be able to quickly provide all of the books, payroll records, and financial statements necessary to secure a favorable audit.
Don’t leave money on the table
For a business owner or independent contractor, every penny counts. One of the biggest business tax mistakes is leaving money on the table or overpaying taxes. In fact, if you don’t plan properly, you might overpay as much as 15% on your annual taxes. Depending on your business size, that can be thousands of dollars that you’re leaving on the table! That money could be put to better use by buying new equipment, renovating your office space, offering bonuses to top employees, or otherwise reinvesting in your business.
A true business advisor will help ensure you claim all eligible deductions for your business, paying just your fair share of taxes, and keeping everything on track for business growth.
Go beyond a preparer, look for a planner
There are lots of business tax preparers out there. They will simply take the information you give them, get all of your return documents in order, and file them. These tax preparers see you once a year and frankly aren’t invested in you, your business, or your success. So, what does a business advisor do? A business advisor becomes an integral part of your business. Working as part of your finance team, your advisor will work with you year-round to make sure that everything is on track.
Together, you will develop a year-long plan that takes into account all of your business functions, accounting situations, and ongoing growth projections. They’ll help you set aside the right amount of money so that there are no surprises when tax season rolls around. You will feel confident with a full picture of what’s realistic, attainable, and compliant with the latest tax standards and regulations.
FMA’s tax professionals have been doing this for years. They’re happy to share this experience and help you understand anything that is confusing or intimidating. That said, mind-reading isn’t one of their many skills. In order to get answers to your questions, no matter how minute or silly they may seem, you have to be honest and ask them.