Common Tax Mistakes by New Business Owners
Starting a business of your own is, naturally, a source of immense pride and satisfaction. Knowing that you actively run a business of your own is a deeply satisfying experience, and something that is sure to leave you with a greater level of self-belief and happiness than ever before.
At the same time, though, running a business on your own takes no small amount of effort and hard work to make that possible.
Taxation is one of the most important parts of business management, and is something you need to invest huge amounts of time into for a long-lasting business.
Prosperity matters, and some of the most common tax mistakes that people can find themselves coping with are bound to come up in your new business. To help you avoid such frustrations and challenges, you should almost certainly look to avoid making the following common yet damaging tax mistakes long-term:
- A major failure that many businesses make at first is not deducting the costs of the business starting up in the first place. A common mistake, this can mean that your business cannot deduct all start-up costs until you make your first sale as a business.
- Any start-up expenses invested before your first sale cannot be deducted until that takes place.
- The total lack of record keeping. Receipts, for example, should be kept for anything that you think could maybe come back to be an issue in the past. Take the time needed to look further into this and you might realize just how much challenge and effort awaits if you don’t follow this process accordingly.
- Any failure to be able to show records, especially early on, is one reason why new businesses can struggle to keep the IRS on-side.
- A common tax mistake by new business owners, too, is to try and put a bit of personal lifestyle stuff in with the business expenses. At the start it can be a legitimate excuse that you spend X on Y as an experiment to see if it would help the business, which it didn’t.
That being said, anything that stands out too much should be avoided from being included – the last thing you need is the IRS wondering why you have a swimming pool in your expenses!
Do yourself a favor, then, and invest some money and capital into getting a qualified Southern California Tax Service Company. Together, you can ensure taxes are genuine from year one.
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