3 Worst Business Tax Mistakes You Can Make
It's just one letter longer than a four-letter word, and just as despised in many cases. Why? We've all heard horror stories of people who have made honest tax mistakes and paid for it for years to come. But even though everyone knows somebody who has had a hard time dealing with a tax agency, there are some mistakes that really stand out. Here's a quick look at the worst business tax errors you can make and why it's important to avoid them.
Not checking out friendly advice
A bank teller once advised a dairy farmer, who was depositing just under $10,000, that it would be a good idea to keep his deposits under that amount to avoid federal scrutiny. What she didn't tell him was that doing so intentionally may be considered a crime. The farmer didn't know until agents showed up at his farm to tell him all his money had been seized. Though the regulations had been written to apply to money laundering, it still took the farmer over four years and multiple appearances in the media and in front of committees to get his money back.
Getting employee status right
Is that individual an independent contractor or employee? A youth soccer association was fined over $330,000 because the IRS felt that the referees, who were paid per match, were employees rather than the independent contractors that the association claimed.
Document any payments
A beauty shop owner had her shop equipment seized and auctioned off to pay the debt the IRS thought she owed them. It turned out she had already paid in full, and the IRS made right on the equipment that was seized, but not the lost business she'd suffered in the meantime.
When mistakes happen in your business taxes, they're probably not as extreme as these cases, but you still will want to avoid making them in the first place. That's one of the reasons why it's so important to have your taxes handled by an accounting firm that knows not only the current tax laws, but also how they're expected to change for the upcoming tax year. If you need help getting your taxes filed properly, please feel free to contact us today. At AccountRely, our business is keeping your business moving forward successfully.