Entrepreneurs are the backbone of industry. Without those who set out to start a business on their own, the giants of every sector would not exist as we know them today. One of the most important parts about being an entrepreneur is properly completing taxes each year. That is why this list of three common tax mistakes that every entrepreneur should avoid making has been created. These common tax mistakes, in no particular order, is as follows:
- Failing to separate business and personal expenses
- Filing too late
- Mathematical errors
Failing to separate business and personal expenses
While it may feel like business owners are always on the clock, it is very important to always separate business and personal expenses. This line can become a bit blurred at times, so it is imperative to refresh yourself on the true difference between the two. Otherwise, by attempting to deduct personal expenses for a business, entrepreneurs can quickly find themselves in hot water with the IRS.
Filing too late
Most tax filers know the date April 15th all too well. For corporations, however, the date March 16th should stick out. Some first time business owners fail to realize that the tax schedule is different for companies than it is for individual citizens. Even if an entrepreneur shows every intention of completing their taxes, if filings are late, a penalty will be enforced.
One of the most common mistakes on tax returns of all kinds are simple mathematical errors. While the errors are rarely intentional, the consequences can be very real and serious. Not only should business taxes be checked and double checked, but larger businesses should consider hiring a professional to ensure the match is correct. For smaller business owners, there are a number of business tax software programs available for use. These tax software programs can greatly decrease the possibility that a mathematical is made and further investigation into the tax return is required. However, asking for a professional’s help and insights could still be beneficial, regardless of the company’s size. After all, math mistakes can seem so trivial, but they have always been taken very seriously.
No one enjoys taxes. However, they are necessary and doing them correctly the first time rids business owners of hours of unwanted headaches. By following the above listed tips, among many others, business owners can complete tax returns without a second thought.
David S. Chang is an entrepreneur, wealth manager, keynote speaker, consultant and Chairman/CEO of Chang Holding Company. David is also the editor of The Art of Thinking Smart, a blog and finance column in The Star-Advertiser’s weekly Midweek with a readership of over 400,000 people. He is also proud to serve as an Intelligence Officer in the Hawaii Army National Guard.
A longtime expert in finance, David uses his executive roles in various companies under Chang Holding Company in order to help people achieve their personal financial and business goals throughout all phases of their lives:
A wealth management firm (which has become ranked as one of the top in the nation and featured in Forbes)
WealthBridge Private Equity
A private equity and venture capital fund
Care for Life
A private-duty home and senior care company
Other companies under Chang Holding include GreenTech Pacific LLC and Pacific West Import/Export Hawaii.
David is the founder of The Art of Thinking SMART, The Art of SMART Money, and The Art of SMART Stocks. He created the Simple 4-Step System to Wealth and Financial Freedom. Supported by over a decade of research and driven by David’s desire to help others excel in all areas of their lives, this step-by-step online training program enables people to take control of their wealth immediately.
Everyone should have a financial plan, regardless of age, income or net worth.David S. Chang
David has always loved to learn and seek out opportunities to achieve the American Dream– so it comes as no surprise that he has taken numerous continuing education courses in finance, investments, and insurance. He also completed the Chartered Financial Consultant® (ChFC®) program at The American College.
In 2015 David was chosen as a member of InvestmentNews’ 2015 40 Under 40 list of top young advisers and associated professionals in the financial planning industry. He has been featured in Forbes as one of America’s Select Financial Leaders. In 2013 David was selected as 40 Under 40 Military by CivilianJobs.com, 2011 Pacific Edge Young Professional of the Year, 2010 Business Leader of the Year from the Pacific Business News Forty Under 40 and 2011 finalist for The Business Leadership American Savings Bank Business Leader of the Year.
In addition, WealthBridge Inc. was selected as a FIVE-STAR Wealth Manager for the State of Hawaii in 2014 through 2011, representing the top 2% of Wealth Managers statewide. In 2014 through 2012 WealthBridge Inc. was also selected by The National Association of Board Certified Advisory Practices (NABCAP) as a Premier Adviser.