3 Common Tax Time Mistakes Small Business Owners Make
Over the years, our experts at New Wave Accounting have come across all types of clients and situations to the point where we’ve seen different experiences of different clients.
Whether it’s piles of records that haven’t been accounted for in 10 years or tight situations where the Australian Taxation Office (ATO) has been forced to intervene, we’ve seen it all. Yet, out of all the different experiences and situations that we’ve dealt with over the years, there’s a problem that continually pops up: Small businesses making avoidable, yet costly mistakes with their tax preparation.
The common hurdle of small business tax preparation
As a small business owner, you’ve probably gone through the phase of entering the start-up process with starry eyes and an “all-or-nothing” mindset that seemed like it wouldn’t fade.
With lots of excitement in mind and butterflies in your stomach, you’ve likely stocked up on materials, set up your software, and briefed your new staff as you start your business. Although things seemed like they were smooth-sailing for the first few months, there might come a time where matters can get tough, especially when it comes to tax preparation.
Unfortunately, many SMEs find themselves unprepared to take on the details and intricate processes of tax preparation work than they’d like to be. As a result, they experience thousands in fines, a firm punishment, and potential imprisonment (for more dire cases of inadequacies).
Common tax-related mistakes to avoid
Admittedly, the idea of getting your small business taxes wrong can prove to be a nightmare in every sense of the word. However, the truth is that you can avoid such problems by keeping an eye on the potential mistakes that you need to avoid. If you want to ensure that your financial matters don’t end up putting you in a tight situation, here are the common tax time fumbles that you need to avoid:
Mistake #1: Being inaccurate with record keeping
If you want to get your reports wrong, get fined by the ATO, and lose thousands in potential profits, then you should definitely slack off with your record-keeping practices.
Although it may sound like such a minor matter at first, record-keeping practices are essentially the bread and butter of smooth and effective tax filing and reporting. If you find yourself falling behind on your obligations with the records, then expect to have a difficult time getting everything right come tax season. Thankfully, modern pieces of technology (bookkeeping software) and top-rated systems make it much easier to comply with record-keeping accuracy standards! Mistake #2: Putting off tax talk until the last minute Another common mistake that small Australian business owners find themselves making far too often is that they slack off with preparation matters to the point where they’ll need to cram it all. You see, effective tax preparation is a year-round effort. It is not something that can be done in a week, nor is it a temporary, once-a-year matter that only comes up and can be worked on during such a time. If you want to ensure that everything goes as smoothly as possible during your preparation process, then start taking a year-round approach to whatever you need to do!
Mistake #3: Preparing your taxes by yourself
Considering that your business is YOURS, you might think that you can handle anything that concerns it. Yet, this isn’t exactly the case when it comes to tax-related matters. Instead of breaking your back and cracking your brain over a process that you can’t understand, you can prevent all sorts of risks from building up and ensure that your financial matters are in line with the help of New Wave Accounting’s tax accountants!
As a small business owner, you might be dreading the whole idea of handling your taxes because of all the different matters that you’ll need to handle. However, don’t let this pull your attention away from the fact that there are mistakes to avoid. With this guide’s help, you won’t need to worry about making avoidable mistakes that can cost you severely in the long run! If you're looking for a tax accountant in the Gold coast that can help you with your business activity statement preparation and lodging-related needs, our team of experts can help you out. Get in touch with us today to learn more about how we can keep you on top of your financial requirements in the most effective way possible!