Business tax deduction mistakes can, unfortunately, cost your business a great deal of money. If you're preparing to file your small business taxes, be sure that you're properly educated about the tax process so that you don't run into these problems.
1. Not Keeping Receipts
One of the single biggest mistakes you can make is not keeping receipts. If you don't keep receipts, you can't deduct your business expenses when it comes time to file taxes, and you end up losing out on a lot of money or deduction benefits that you could get.
2. Not Maintaining Proper Records
Without proper records of all of the deductions that you claim on your tax forms, you're leaving the door open for audits and other potential problems. Make sure that you keep a dedicated tax diary to help you answer any questions the IRS may have about your business and expenses.
3. Not Withholding Enough
If you end up getting a refund check back for a sizable amount of money, it's generally an indicator that you have too much money withheld from you throughout the year. Adjust your withholding profile so that you maximize the money that you have to spend on your business at all times throughout the tax year.
4. Check All Deductibles Carefully
There are many things that you may not expect to be deductible from your taxes which actually are. For instance, a variety of business expenses like driving costs, laundry or dry cleaning, supplies and more can all be deducted under certain circumstances. Learn what you can deduct to maximize your savings.