Watch out for these common accounting mistakes

Watch Out for these Common Accounting Mistakes

Every business owner needs to ensure that they have the right financial tracking systems in place to ensure the long-term success of the company. It can be stressful to keep up with the financial tracking for your company, and unfortunately it is quite common for business owners to make mistakes. Even if you have basic knowledge about accounting and finances, you should still consider the benefits of talking with an accounting professional to ensure that everything is handled correctly.

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These are a few of the common mistakes that often happen in small businesses:

Handling Tax Write-Offs Incorrectly

There are actually two mistakes that might happen with tax write-offs: either you are taking too many deductions that can’t be substantiated, or you aren’t taking enough deductions to optimize tax exposure. It is important that you are proactive to leverage the deductions in the right way, but mishandling deductions might result in a situation where you are audited by the IRS.

Missing Tax Payments

Depending on the size of your business, there are different deadlines that need to be met for filing taxes and paying estimated taxes throughout the year. If you miss these deadlines, then you might be facing penalties and additional costs. Talk with your accountant to be sure that you have a clear understanding about tax deadlines that need to be met, in order to ensure that you send the payments in time.

Classification of Employees and Contractors

Make sure that you understand the differences between an employee and a contractor, because there are different rules that need to be followed for each type of worker. It might be tempting to classify everyone as a contractor in order to avoid paying employment taxes, but there are certain requirements that need to be met in order for a worker to fall under the classification of a contractor instead of an employee.

Filing and Paperwork Mistakes

It is essential to keep important documents, receipts, and other business paperwork on hand in case you need to reference the information later on. Additionally, this paperwork might be needed if the IRS has questions about your tax filings. Put together a good bookkeeping and filing system to help you keep up with all of the paperwork.

One of the best things that you can do is hire an accounting and bookkeeping service to help with the financial tracking within your company. Here at Easier Accounting, we offer all of the services that you need. Call us today to learn more about the options that are available: (888) 620-0770

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