Part of the series: 10 Small Business Tax Mistakes (Based on IRS Guidance) Some tax provisions allow business owners to defer or reduce taxable income through qualified accounts. IRS Publication 560 and IRS Publication 969 explain the rules for retirement plans and Health Savings Accounts (HSAs). These accounts allow eligible individuals to make tax-advantaged contributions … Read more
Part of the series: 10 Small Business Tax Mistakes (Based on IRS Guidance) Worker classification is an important part of complying with federal tax rules. IRS Publication 15-A explains that businesses must determine whether workers are employees or independent contractors based on common law rules. This determination affects how wages are reported and whether employment … Read more
Part of the series: 10 Small Business Tax Mistakes (Based on IRS Guidance) Business expenses can reduce taxable income, but spending money solely to reduce taxes does not automatically improve a business’s financial position. IRS Publication 535 explains that ordinary and necessary business expenses may be deductible when they are directly related to operating the … Read more
Part of the series: 10 Small Business Tax Mistakes (Based on IRS Guidance) Accurate financial records depend on tracking activity across all accounts used for business purposes. Internal Revenue Code §6001 requires taxpayers to maintain records sufficient to establish the income and deductions reported on a tax return. These records must reflect all financial activity … Read more
Part of the series: 10 Small Business Tax Mistakes (Based on IRS Guidance) Accurate records depend on tracking all business income and expenses. IRS Publication 535 explains that businesses may deduct ordinary and necessary expenses related to operating the business. To claim these deductions, expenses must be properly recorded and supported by documentation. When expenses … Read more
Part of the series: 10 Small Business Tax Mistakes (Based on IRS Guidance) Small business owners are required to maintain records that clearly show business income and expenses. IRS Publication 583 explains that businesses must keep records that support the amounts reported on tax returns. These records must show income, expenses, and other financial activity … Read more
Small business owners are required to maintain accurate records and follow IRS rules. Most small business tax mistakes are not intentional. They happen when documentation is incomplete, records are unclear, or IRS rules are applied incorrectly. The IRS provides clear guidance on deductions, worker classification, depreciation, record-keeping, and compensation. Compliance depends on following those rules … Read more
Business owners juggle many responsibilities, and taxes are often pushed aside until something goes wrong. Most tax issues are not intentional. They usually happen because of incomplete records, misunderstandings of tax rules, or decisions made without fully understanding the consequences. The IRS provides clear guidelines for reporting income and deductions. When those guidelines are not … Read more
Many small business owners consider hiring family members during the summer to help with seasonal work or routine tasks. It can be a practical way to handle a busy period while keeping work within the family. However, hiring a spouse, child, or other relative still involves important bookkeeping and payroll responsibilities. Understanding the basic rules … Read more