Let’s be honest: taxes probably weren’t the reason you started your business. But ignoring them? That’s a surefire way to drain your bank account, stress you out, and possibly get a not-so-friendly letter from the IRS.
The good news? Avoiding tax mistakes doesn’t require a finance degree or a crash course in IRS regulations. You just need a solid plan and maybe a CPA in Austin, Texas who actually gets small businesses (hint: that’s us).
Here are the top five tax mistakes small business owners make and how to avoid them like a boss.
1. Mixing Business & Personal Expenses (A.K.A. “The Audit Magnet”)
- Why It’s a Problem: Using your personal bank account for business transactions makes bookkeeping a nightmare, muddles deductions, and waves a giant red flag for the IRS.
- How to Avoid It: Open a separate business bank account and credit card—trust us, future you will thank you. A small business CPA Austin can help you clean up any financial mess and set up a proper system.
2. Forgetting to Track Startup Costs (AKA: Leaving Free Money on the Table)
- Why It’s a Problem: Every dollar you spend before launching—think branding, website development, equipment—could be a tax deduction. But if you don’t track it? You’re just giving the IRS extra cash.
- How to Avoid It: Keep detailed records from day one. An Austin tax accountant will ensure you claim every startup expense possible, lowering your tax bill.
3. Filing the Wrong Tax Forms (Oops, That’s Not the Right One)
- Why It’s a Problem: Sole proprietors, LLCs, and S-Corps all have different filing requirements. Using the wrong forms—like mixing up a Schedule C with Form 1065—could mean penalties or missing out on major tax benefits.
- How to Avoid It: A tax advisor in Austin will make sure you’re using the right tax structure for your business and filing everything correctly.
4. Skipping Quarterly Estimated Tax Payments (And Paying for It Later)
- Why It’s a Problem: Unlike a 9-to-5 job, there’s no employer withholding your taxes. If you’re not making estimated payments, you’ll owe a lump sum at year-end plus penalties.
- How to Avoid It: A CPA in Austin, Texas can calculate your estimated taxes and set up a schedule so you’re not hit with a surprise bill.
5. Overpaying (or Underpaying) Self-Employment Taxes (Because Guesswork Isn’t a Strategy)
- Why It’s a Problem: Many business owners either overpay (ouch) or underpay (hello, IRS penalties). Getting it wrong means either giving up cash unnecessarily or owing more than you expected.
- How to Avoid It: A CPA firms Austin Texas expert will fine-tune your tax strategy so you’re paying exactly what you should—no more, no less.
Let’s Keep More of Your Hard-Earned Money Where It Belongs—With YOU
Why stress over taxes when you can have a CPA who handles them for you? At Insogna CPA, we make sure small business owners like you avoid costly mistakes, maximize deductions, and stay stress-free come tax season.
Whether you need expert Austin accounting services, a proactive Austin small business accountant, or a tax-saving strategy from one of the top CPA firms in Austin Texas, we’ve got your back..
Book a free consultation today—let’s make tax season a breeze!