Daily Biz Solutions

If you have decided to open your own business, whether it be a store front or work from home, here are some mistakes you want to avoid.

1. Not doing your homework prior to starting up. Be sure you have done some research into you business type. You need to be aware of the kind of money that is required in setup and ongoing maintenance until it begins to make a profit. You will also need to know what types of expenses can be deducted for your type of business. The Internet has numerous resources on most types of businesses. Finding a blog written by someone who owns a business like your is a good idea too.

2. Not keeping complete and accurate records. Here is where so many small businesses run into trouble. Your best bet is to have a separate checking account for your business. Don’t pay personal bills like rent/mortgage, food etc … out of this account. Be sure you have accurate records of all payments made to you for services rendered or products sold. Don’t deposit anything into the business account but monies paid to your business. Keep receipts and canceled checks for purchases you have made for products, supplies and other business expenses. An inexpensive bookkeeping system is worth its weight in gold in tracking your income and expenses. Don’t go to the store and buy items for both personal and business use on the same receipt. Chances are, if you are audited, you won’t be able to remember which is which and all those expenses will be disallowed. Lack of good records can cost you a bundle if you are ever audited by the IRS.

3. Not being sure your payroll records are accurate and secure, since they contain Social Security Numbers.

4. Not being sure you make your payroll tax deposits on time. The IRS will really jump on this item.

5. Not filing your payroll tax reports such as 941s and 940s, as well as your state unemployment reports, if required by your state.

6. Not paying estimated tax payments. Running you business and using money you should be paying to the IRS is a mistake that will eventually catch up with you and could cost you twice what you originally owed.

7. Not filing an accurate, timely tax return as required. You create greater scrutiny if you have not filed your return by the deadline. If you wait too long, the IRS will file a return for you and then your return will really be gone over with a fine tooth comb. Hiring a tax professional to assist you with the preparation of your return can save you time, stress and money due to fees charged by the IRS for filing an inaccurate return.

Try following some tax related blogs and/or visit the IRS small business section for important information. Subscribe to a blog close to your business type to keep you updated on current issues and to get tips and hints to help you run your business more smoothly. And if you get into trouble, fix it immediately, whether through your accountant or an honorable tax resolution firm.

Beckie Leone is a seasoned Enrolled Agent for Effectur Tax Resolution and actively represent tax debtors and resolves tax debt before the IRS. She is a former small business owner and shares her wealth of knowledge on her blog, http://www.TaxConsultant4U.com Beckie enjoys the tax resolution process and draws special satisfaction from assisting taxpayers in resolving their debt and giving them back their peace of mind.

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