Small Business Owners 

It's no secret that everyone could probably benefit from tax planning advice from an expert. But small business owners today need this more than they might think!

The new administration in the United States has proposed an increase for 2021 from 21% to 28% on corporate taxes, so if you're planning big growth and success for your business, now is the time for some financial advice. In the meantime, looking at common small business tax mistakes is not a bad idea. 

If you are a small business owner just starting out or are thinking about starting a business, Boyd Group Services is a great place to start.

Your finances should be your most important focus in order for your business to be capable of growth. So don't make the same common mistakes new business owners make by skipping the financial advice! Boyd Group Services offers multiple different financial and tax services proven to help small businesses achieve their optimal growth rate and level of success.

Business Structure - Mistake #1  

The way you structure your business, from a tax perspective, makes a huge difference as to how much money you will potentially make. Scalability is extremely important for small businesses, allowing owners to take advantage of growth opportunities along the way with confidence.

But for tax purposes with the IRS, you will want to decide which type of business to identify with. S corporation or standard C corporation, LLC or sole proprietor, whatever you choose, don't make the first mistake in structuring your business wrong. 

Business Costs - Mistake #2  

When you're first starting a business, you can get overwhelmed easily, especially when running the business takes up all your energy. Small business tax mistakes can be avoided by knowing some helpful information beforehand, like deducting all your startup expenses at once.

The IRS has limitations on business startup costs that can be deducted in the first year and requires that you spread out the rest of your startup expenses over the next several months. Therefore, don't make the mistake of counting on all your startup costs being a tax deduction in the first year.

Bad Records - Mistake #3 

The third mistake small businesses make, and probably the biggest is their record keeping. Keeping bad records is a  huge  mistake many small business owners make because it can cost so much money.

Uncle Sam wants to know if you have a business bank account or any other business accounts, aside from your personal accounts, of course.

Not only that, but you must keep receipts for  all  of your accounts and for all of your expenses. Do you have a business credit card? Don't forget to keep records for this! 

Hiring a terrific accountant or CFO for excellent record-keeping is one of the wisest and shrewdest business decisions you can make, so don't make this mistake.

Additionally, Boyd Group Services offers both accountant and CFO services for business owners, as well as tax preparation and tax planning. Let us help you grow and scale your small business, and achieve optimum success. 

Business Deductions - Mistake #4 

Keeping business and personal records straight can be - taxing, to say the least. Are all of your business expenses considered business deductions? How about entertainment costs that pertain to business, is that a deduction?

Interestingly enough, although you can use these costs as a business deduction, you can only subtract half or 50%. Another tax deduction you may not be aware of is property tax, as well as state and local income tax.

Remember, deductions add up and are amounts you can subtract from your gross income to reduce the amount of taxable income you pay to the IRS.

As a business owner, it is important to be aware of the intricacies of tax law or hire someone who does, such as Boyd Group Services. We have the expertise to help you reduce the amount of your taxable income, paying less in business taxes.  

Forms and Deadlines - Mistake #5 

Tax season strikes fear into even seasoned business owners, so don't feel bad if you're feeling some trepidation. The tax filing deadline for your income tax return with the IRS is no joke, however, and the tax penalties for being late are steep. If you know you're going to be filing late, be sure to fill out form 7004 to request an extension. Otherwise, you will be penalized, as will your company.

Fill out the correct forms when submitting your business and personal information to the IRS, and don't abuse the privilege of using a form to request anything you don't really need. It could bite you in the you-know-what if you're not careful! Being on time and submitting the correct form or forms with accurate information is the way to avoid this common mistake.

Payroll Taxes and Self-Employment Tax if Applicable - Mistake #6 

If you are a business with employees, you are responsible for withholding and paying quarterly federal payroll taxes, which are separate from your other taxes. This is form 941, but quite complicated and costly if you get it wrong or are late. Many companies outsource this department to ensure accuracy.

If you're self-employed, don't forget to file your self-employment tax. And even if you are your own company, you can deduct the cost of running your home office. Use form 1040 Schedule SE, the tax rate is 15.3%, and this includes Social Security and Medicare taxes.

Not Utilizing Financial Professionals - Mistake #7   

Not everyone has access to information regarding tax laws, nor the inclination to try and understand them. Running your business takes all your focus without the added hassle of finances. Tax preparation and tax planning are best left to a tax professional, such as Boyd Group Services. Not using professional financial services is another fatal mistake new business owners make. After all, what could be more important than your company finances?

Here at Boyd Group Services , we help small businesses become large, successful businesses. Owner Chad Davidson has a proven method of success for scaling and growing your business and the experience to get you the results you want. Schedule a free consultation and diagnosis of your business from a tax perspective today to see how we can help  your  business.