Running a small business comes with many responsibilities and tax compliance is one of the most critical. Unfortunately, many entrepreneurs unknowingly fall into tax traps that can lead to penalties, audits, or financial strain. The good news? Most tax mistakes are avoidable with a little planning and awareness.
In this post, we’ll explore common tax pitfalls small business owners make and how to avoid them, so your business stays compliant and financially healthy.
- Mixing Business and Personal Expenses
The Pitfall: Many business owners use the same account or credit card for both personal and business purchases. This makes it hard to track deductible expenses and can raise red flags with tax authorities.The Fix: Open a dedicated business bank account and credit card.
Use accounting software to categorize and track expenses accurately.
Keep receipts and digital records for each transaction.