Tax Preparation Mistakes That Small Businesses Should Avoid

For small businesses, mistakes made in tax filing may mean that there are many repercussions that may cause a great burden to your business. There are quite a number of mistakes that people make when they are preparing their taxes. Most people don’t even realize that they some of these mistake are even possible in the first place, but unfortunately lack of knowledge isn’t considered as an excuse.

Here are some of the tax preparation mistakes that you, as a small business owner, need to ensure that you steer clear of:

A huge mistake is overlooking the fact that you can deduct the expenses that you sustained before you officially opened your business.

Not classifying a legitimate business deduction regarding your business’s vehicle and mileage is another mistake you should avoid making.

Neglecting to include small deductions is a huge mistake as well. We’re talking about things like magazine subscriptions, educational classes, small cash purchases, etc.

Another mistake is exaggerating your deductions because that may increase your likelihood of receiving an audit by the CRA.

You may have other tax obligations besides the CRA, so you need to ensure that you attend to them in a timely manner. Neglecting them is a huge mistake.

If you mix your business accounts with your personal accounts, you may find that it’s extremely difficult to keep proper tracks of them and that can lead to quite a lot of problems.

You are making a mistake if you aren’t carefully ensuring that you correctly deposit your payroll taxes.

If you are not updating your records, ensuring that they’re tracked, reconciled and supported with receipts, then you are making a very big mistake.

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