Small-business owners may get into trouble with their business taxes for a number of reasons. But the main culprits may not be what you think.
You might be tempted to chalk up the majority of tax troubles to financial difficulties, or problems that arise when a business is a victim of theft.
In most situations, however, a small business’s tax troubles can be attributed to just two reasons—and they’re often related.
- Poor record-keeping and bookkeeping
- Not understanding the complex tax rules well enough
Bookkeeping Gone Wrong
A business’s tax problems often start with lapses in record-keeping and bookkeeping. Disorganization and inadequate records may lead business owners to overspend or make other poor judgment calls. Then, when tax time rolls around, records that are needed to properly account for a business’s income and expenses aren’t organized—or even available. For overwhelmed business owners, the task seems too big to straighten out, so they give up and simply guess rather than using the proper paperwork to estimate their tax liabilities.
Do you have the support you need to manage your small business bookkeeping?
Schedule a 30-minute appointment to speak with a local small business adviser.