Summary of What This Blog Covers:
- Learn the Most Common Tax Mistakes Small Business Owners Make: From missing deductions and self-employment tax savings to using the wrong business structure, this blog highlights the top errors that quietly cost entrepreneurs thousands each year.
- Understand How to Legally Lower Your Tax Burden: Get practical strategies from a certified public accountant like tracking expenses accurately, filing quarterly taxes on time, and switching to an LLC or S-Corp to reduce self-employment tax.
- Avoid IRS Trouble and Stay Compliant Across State and International Borders: This blog explains how sales tax, multi-state nexus rules, and FBAR filing requirements can affect your business and why proactive planning with an experienced CPA is essential.
- Discover the Power of Strategic, Year-Round CPA Support: Learn why DIY tax software often falls short for growing businesses, and how working with a trusted Austin CPA firm like Insogna CPA can unlock real savings and long-term financial clarity.
Let’s Talk About That Tax Bill You’re (Probably) Overpaying And How to Fix It
Let’s have that honest heart-to-heart, shall we?
You’ve been building your business with everything you’ve got: early mornings, late nights, big ideas, and bigger invoices. But if you’re like most entrepreneurs, there’s one piece of the puzzle that’s costing you more than it should: your taxes.
And no judgment here, it’s a system built to be confusing. Between IRS deadlines, business structure decisions, and evolving tax laws, it’s easy to make well-meaning mistakes that drain your cash flow. The good news? With the right plan and the right CPA in Austin, Texas, you can fix them.
Here’s what we see time and time again at Insogna CPA, your go-to team of small business CPAs in Austin who specialize in helping founders like you stop overpaying and start optimizing.
1. Not Tracking Business Expenses (AKA: Leaving Free Deductions on the Table)
Think of business expenses like coupons for your taxes. Every expense you forget to track? That’s a coupon you’re not using and you’re overpaying because of it.
Common Mistakes:
- Using the same credit card for personal and business purchases
- Failing to record software subscriptions, mileage, or that working lunch with a client
- Forgetting to document small recurring expenses, which can add up to thousands a year
How to Fix It:
- Open a dedicated business bank account and credit card
- Use tools like QuickBooks Online, Xero, or Wave
- Store receipts digitally with Hubdoc or Expensify
- Consult a tax accountant near you to identify overlooked deductions
Pro tip: A $30 Zoom subscription, $120 in parking fees, and $60/month on marketing tools can easily snowball into $5K+ in deductions across a year.
Need help getting your books in shape? That’s what our Austin accounting service is here for.
2. Overpaying Self-Employment Taxes
If you’re still a sole proprietor or single-member LLC, you’re likely paying 15.3% self-employment tax on your entire net income. That’s a silent thief right there.
Example:
Let’s say your business earns $100,000 in profit:
- Sole Proprietor → You owe $15,300 in self-employment tax
- LLC with S-Corp election → You pay yourself a $50K salary and only pay self-employment tax on that amount
The Mistake:
- Not reviewing your entity structure annually
- Missing the chance to elect S-Corp status
- Not consulting a tax advisor near you to help calculate “reasonable salary” and avoid IRS red flags
At Insogna CPA, we guide you through S-Corp formation, handle your Form 2553, and even set up compliant payroll.
This is one of the fastest, legal ways to reduce your tax liability and we’ve helped clients save $5K–$20K per year just by structuring things correctly.
3. Missing Legitimate Business Deductions
Every deduction reduces your taxable income. If you’re not claiming everything you qualify for, you’re voluntarily giving the IRS a bonus.
Most Commonly Missed Deductions:
- Home office space
- Business use of your car, including mileage or actual expenses
- Continuing education, online courses, books, and certifications
- Software tools (Slack, Canva, Adobe, etc.)
- Professional services like your CPA, legal support, or marketing consultant
The Fix:
- Deduct every eligible expense (don’t guess—verify with your certified CPA)
- Maintain clean records—no receipt, no deduction
- Work with a proactive tax preparer near you to categorize expenses correctly
Think you’re too small to qualify? We’ve helped solopreneurs unlock thousands in deductions they never thought they could take.
4. Missing Quarterly Tax Payments
Skipping estimated payments is like skipping oil changes, it doesn’t seem urgent until something breaks. And in this case, that something is usually your cash flow in April.
IRS Due Dates:
- April 15
- June 15
- September 15
- January 15 (of the following year)
The Mistake:
- Not setting aside funds throughout the year
- Guessing your estimated tax amount
- Getting hit with IRS penalties (plus interest)
How to Fix It:
- Work with an Austin, TX accountant to estimate your tax liability based on actual profit
- Allocate 25–30% of each payment to a separate tax savings account
- Pay on time using EFTPS or IRS Direct Pay
Our clients love that we automate reminders and help calculate their quarterly payments so there are no surprises come April.
5. Choosing the Wrong Business Structure
Your entity type doesn’t just affect your taxes. It affects your liability, credibility, and ability to scale. And yet, many business owners never revisit their setup after year one.
The Mistake:
- Operating as a sole prop when an LLC or S-Corp offers better protection and savings
- Choosing an LLC but failing to elect S-Corp taxation
- Not reviewing your entity as profits grow
The Fix:
- Schedule an annual entity review with your certified public accountant
- Transition to an LLC or S-Corp once you hit consistent profits of $50K+
- File the right IRS forms on time (we’ll handle it for you)
Remember, your entity should evolve as your business does. And at Insogna CPA, we’re experts at helping small business owners make that transition smoothly.
6. Overlooking Multi-State Tax Obligations
E-commerce sellers, remote workers, and coaches, this one’s for you.
If your clients or customers are in multiple states, or if you ship across state lines, you may owe sales tax, income tax, or even franchise tax in other states.
The Mistake:
- Assuming you only need to file taxes in the state where your business is registered
- Ignoring economic nexus laws and sales tax thresholds
- Failing to register for required state-level taxes
The Fix:
- Use platforms like TaxJar or Avalara to monitor multi-state sales
- Work with a CPA firm in Austin, Texas that understands multi-state tax strategy
- Register and file in the necessary states proactively not reactively
Texas may be friendly on state income tax, but other states aren’t as lenient. The right advisor will help you stay compliant, wherever your customers live.
7. Trusting DIY Tax Software to Do It All
TurboTax is great for a W-2 and a couple of donations.
But as soon as you’re running payroll, deducting travel, and juggling client invoices? You’ve outgrown it.
The Mistake:
- Believing tax software is “good enough” for your business
- Filing without professional review
- Lacking a forward-looking strategy
The Fix:
- Partner with a tax professional near you who understands your industry and income model
- Build a customized tax strategy not just a year-end file-and-pray routine
- Meet quarterly with a certified CPA for check-ins, especially as you scale
Your business deserves more than autofill and hope. With Insogna CPA, you get insight, accuracy, and a strategy that works year-round.
Bonus: Forgetting About FBAR Filing (If You Have Foreign Financial Accounts)
Do you have more than $10,000 across foreign accounts, including crypto platforms or PayPal accounts tied to foreign banks?
If yes, you may be required to file an FBAR (FinCEN Form 114) annually even if there’s no income tied to it.
The Mistake:
- Failing to report foreign holdings
- Assuming small balances don’t need to be disclosed
- Missing the deadline and facing steep penalties
The Fix:
- Let your chartered professional accountant evaluate your foreign holdings
- File FBAR with your Form 1040 or separately as required
- Avoid penalties (even unintentional non-filing can cost thousands)
Our team handles FBAR filing for clients with international ties and keeps everything fully compliant with U.S. reporting rules.
Let’s Put a Stop to Costly Mistakes
Your business is too important to be losing money to preventable tax errors.
At Insogna CPA, we specialize in working with growing businesses and entrepreneurs to build strategies that not only protect your cash but grow it.
Here’s how we help:
- File accurate, optimized returns through our expert tax preparation services
- Help you reduce self-employment tax legally through S-Corp structuring
- Keep you compliant with multi-state and international filing requirements
- Offer year-round planning and support, not just once-a-year filing
Whether you’re looking for a tax preparer near you, a trusted Austin accounting firm, or just someone who speaks your language (and IRS’s), we’ve got your back.
Book Your Tax Strategy Session Today
Stop leaving money on the table. Stop guessing your way through tax season.
Let’s build a smarter, simpler, and more profitable tax plan together.
Schedule a consultation with Insogna CPA, your dedicated team of Austin tax accountants, enrolled agents, and licensed CPAs, and let’s make tax season something you look forward to.