Summary of What This Blog Covers:
- How disorganized records lead to missed deductions and stress
- Why timely 1099/W9 compliance protects your profits
- The risks of mixing personal and business finances
- How proactive tax planning avoids penalties and boosts control
You’re growing. Business is good. The leads are coming in, cash is flowing, and you’ve got a calendar so full of opportunity you’ve started scheduling your lunch breaks like client meetings.
But behind all that growth, there’s something quietly threatening your momentum. No, it’s not a competitor. It’s not a software glitch. It’s not even the economy.
It’s your taxes.
If you’re like most fast-growing entrepreneurs, your tax game hasn’t caught up with your revenue and that’s where things get dangerous. You didn’t start this business to become a tax expert, but guess what? If you ignore it, you’ll pay for it. Literally.
Let’s unpack the five most common tax mistakes we see growing entrepreneurs make and exactly how to avoid them.
1. Poor Recordkeeping: The Silent Profit Killer
Here’s the brutal truth: messy books kill businesses. Or at the very least, they kill profits. If you’re still tracking expenses in a spreadsheet you only update when you’re panicking in March, you’re losing money.
And if you’re still downloading bank statements and guessing what each charge was for? We need to talk.
What happens when you don’t keep good records:
- You miss tax deductions (because your CPA can’t see what’s not clearly categorized)
- You pay more for tax prep (because your accountant is doing the work your systems should’ve done)
- You risk audits (because the IRS loves returns that look confused)
Your books should be clean enough to hand to a lender, an investor, or an auditor and not break a sweat.
The fix:
- Use QuickBooks Self-Employed or cloud-based accounting software to automate your tracking
- Reconcile your accounts monthly, not when you feel like it
- Connect your business checking and credit card accounts directly to your bookkeeping tool
- Work with a certified public accountant near you to keep your financials current, clean, and actionable
Bonus tip: Let your Austin tax accountant walk you through your P&L each quarter. If you don’t know your numbers, you don’t know your business.
2. Missing Deductions That Are Legally Yours to Take
If I had a dollar for every business owner who left deductions on the table because they didn’t want to “push it” with the IRS… I’d have enough to fund your SEP IRA and throw in a new MacBook.
Here’s what’s often missed:
- Home office expenses (a portion of your rent, utilities, internet, and even home insurance)
- Business use of your personal cell phone and internet
- Software subscriptions (Zoom, Canva, Adobe, Dropbox)
- Business meals and travel
- Equipment (computers, cameras, microphones, monitors)
- Education and coaching (courses, masterminds, mentorships)
- Contractor payments (don’t forget to file those 1099 NEC forms)
These are not “creative deductions”. They’re real, legitimate, IRS-allowable business expenses. But if your records don’t support them, they don’t count. And if you don’t work with a tax advisor near you who knows how to identify and claim them? You’re leaving money on the table every single year.
The fix:
- Set up a category structure in your accounting software
- Keep receipts organized (digital is fine. Attach them directly to transactions in your books.)
- Use a certified public accountant in Austin, Texas who proactively helps you identify deductions you’re likely to miss
3. Not Issuing 1099s (and Skipping W9s Until It’s Too Late)
You hired a freelancer. Maybe a VA. Maybe a graphic designer. Maybe someone to clean up your podcast audio. You paid them more than $600, didn’t collect a W9 tax form, and now it’s January and you’re scrambling.
What you should have done:
Collected a W9 the moment you agreed to work together. Filed a 1099 NEC form by January 31. Documented the payment properly.
What happens if you don’t:
- The IRS slaps you with penalties (per form, per contractor)
- Your tax return gets flagged
- You risk losing that expense deduction entirely
And don’t assume that just because you paid through PayPal or Venmo you’re off the hook. If you didn’t use a third-party payment processor that issues a 1099-K, it’s on you.
The fix:
- Always collect a W9 before paying any contractor or freelancer
- Use a system to track how much you’ve paid each vendor throughout the year
- Partner with a small business CPA in Austin who will track this for you, issue your 1099s, and keep you out of IRS penalty territory
4. Commingling Personal and Business Finances
Let’s talk about one of the sloppiest (and most dangerous) habits in entrepreneurship: using your personal bank account for your business.
If you’re still mixing business expenses with personal ones, you’re not just creating confusion. You’re undermining your financial foundation.
Here’s what happens:
- You miss deductions because your CPA can’t distinguish expenses
- You create audit red flags
- You risk piercing the corporate veil and exposing your personal assets to liability
- You can’t get business funding because your financials are a mess
- You frustrate your accountant (and maybe even your bookkeeper)
The fix:
- Open a business checking account under your EIN
- Use a separate business credit or debit card
- Run all business income and expenses through business accounts only
- Connect your bank and card to QuickBooks Self-Employed or your preferred accounting tool
- Reimburse yourself when needed but do it properly, and document it
Still commingling? Let a CPA in Austin, Texas help you clean it up and put real systems in place. Your future self (and your CPA) will thank you.
5. Filing Late or Defaulting to Extensions (Every. Single. Year.)
Extensions are like caffeine: useful in emergencies, dangerous when overused.
Yes, an extension gives you more time to file. But it doesn’t give you more time to pay. If you owe taxes and didn’t pay by the April deadline, you’re already accruing penalties and interest even if you file in October.
And if you always extend, you never plan. You’re not strategizing. You’re surviving. And surviving is not the vibe we’re going for.
The fix:
- Work with a tax preparer near you who checks in before tax deadlines not after
- Forecast your tax liability throughout the year and set aside payments quarterly
- File on time, or early (yes, it’s possible)
- Make quarterly estimated payments if you’re earning consistent self-employment income especially important for those subject to self employment tax
Want to skip the chaos and stay on schedule? Work with a CPA certified public accountant who sees around corners and plans ahead so you don’t have to panic later.
Bonus: What Happens When You Do It Right
Let’s flip the script. When your tax systems are dialed in?
- You pay less in taxes, because you’re claiming every legal deduction
- You file on time, every time, with confidence
- You build business credit and open up funding options
- You’re protected legally, because your finances are structured properly
- Your accountant actually helps you strategize because they’re not buried in cleanup work
Bottom Line: Growing Revenue Requires Grown-Up Tax Strategy
You didn’t start your business to chase receipts or file 1099s. But if you’re not doing it or not doing it right, you’re risking your profits, your growth, and your peace of mind.
The IRS doesn’t care how big your vision is. They care if your books are clean and your returns are correct.
Avoid these pitfalls with a CPA partner who sees around corners. Let’s talk.
Schedule your 15-minute clarity call with Insogna today.