Common Ways Small Business Owners Miss Out on Tax Savings
Many small business owners unknowingly overlook tax-saving opportunities while filing, leading to missed deductions, credits, and other potential savings. From failing to track expenses to misclassifying workers, these oversights can result in higher taxes and prevent business owners from maximizing their tax benefits.
Here are five ways small business owners miss savings while filing taxes:
Overlooking Business Deductions: Many small business owners miss out on valuable deductions like home office expenses, vehicle use, and business-related meals or travel.
Failing to Track Expenses Throughout the Year: Without consistent tracking of expenses, owners may forget to deduct costs that could significantly lower their taxable income.
Not Taking Advantage of Tax Credits: Business credits, such as those for hiring employees, energy-efficient upgrades, or research and development, are often overlooked.
Misclassifying Employees vs. Contractors: Incorrectly classifying workers can result in missed savings and penalties, as contractors and employees have different tax treatment.
Ignoring Retirement Plan Contributions: Contributing to a retirement plan, like a SEP IRA or 401(k), can reduce taxable income and save on taxes, but many small business owners fail to take advantage of this option.
About Hunter Tax Associates
Founded in 2017, Hunter Tax Associates is a boutique tax firm that helps businesses and individuals strategize how to best position themselves for successful financial outcomes.
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