Top 3 Common Tax Return Mistakes Businesses Make in Australia
Some mistakes in running a business help it grow, but others are best avoided in the first place as it can lead to costly consequences and legal trouble. Business owners are careful with providing the proper strategy for customer acquisition, brand building, and sales, so it’s easy to slip up during tax season when the latter takes a backseat in your list of priorities.
When there are errors in your tax returns, it can lead to overpaying your due diligence, filing penalties, or even inviting an IRS audit to check your business. With that in mind, the list below should be a clue in on the common mistakes to avoid when filing for taxes.
Mistake #1: Failing to Send the Proper Forms or Payments
Not all tax forms are the same, which is where businesses often make the first mistake. Keep in mind that payroll taxes, sales taxes, and estimated income taxes need to be submitted quarterly, while others are sent over annually.
Forms like the W-2 and 1099 are given directly to the company’s employees, as these are best filed individually. With that in mind, it’s best to remember that various businesses are required to file and submit different forms of tax preparation and payments to the IRS every tax season. Some also need to send the same files to your state tax department.
To stay on top of the schedule, you can always check the tax calendar the IRS publishes every year to help businesses and individuals keep track of the due dates for the year.
Mistake #2: Wrong Claims Due to Mix Up Between Business and Personal Expenses
When you’re running a new small business and crunching the numbers on your own, it’s easy to mix up all the finances going in or out of your wallet. Keeping business and personal finances must be separated at all costs when it comes to deducting from your income.
Opening a new bank account that is dedicated solely to business expenses is crucial to ensure everything is easier to track and support any deductions accurately.
Mistake #3: Poor Record-Keeping
Tax preparations should be done months ahead, even for businesses that are not obligated to file quarterly tax returns. With that in mind, keeping all forms of expenditure must be organized, down to the little details such as your receipts when validating claims.
Failing to keep your cash flow in good working order can result in confusion as you try to cram it all, which would result in more loss as you pay to get everything sorted out at the last minute. Integrating accounting software programs should help streamline your process.
The Bottom Line
Even when you’re turning over the responsibility to the hands of a professional accountant, knowing the common mistakes that happen during tax season should help you run through the numbers without running into financial potholes.
Hiring an expert accountant should help you manage your tax better and ensure you stay on top of your finances.
If you’re looking for quality accountants that provide accounting and bookkeeping services to handle your tax returns for your entrepreneurial ventures in Mermaid Beach, we are your best option! Contact us at (07) 55041999 and see how we can help you!