This is the third in a three-part series discussing tax strategies for businesses and business owners.

Mistakes are a part of life.  We all make them.  Learn from them and grow from them.  And try to avoid repeating them.  As a new business owner, it is not uncommon to make mistakes when preparing one’s first tax return.  By learning from the mistakes of others, you can turn your inexperience into a strength by doing things the right way from the get-go. 

Here are a few of the most commonly made mistakes made by small business owners in preparing their taxes: 

• Not tracking all reimbursable expenses – Whenever possible, try to pay for expenses out of a company bank account or corporate credit card.  If you must pay in cash, keep a detailed accounting of these receipts so that “your company” can reimburse you.  If you forget to track these expenses, you may not be able to recoup all of these expenses on your personal return
• Overstating your deductible business gifts - You may be the most generous small business owner in the world, but play it close to the vest for uncle sam.  Don’t claim $6000 in gifts if you’re not prepared to prove it.  Excessive gift deductions is a common red flag that can put you right in the crosshairs of IRS examiner.  Stay off the radar.  As a new business owner, you do not want to invite more scrutiny than you absolutely have to.
• Dot all your i’s and cross all your t’s: Respect the sanctity of your first tax return.  Make sure your social security numbers and tax identification numbers are all accurate.  And then double-check it again.  Check your math.  With a calculator.  Not in your head.  And don’t forget to sign your return.  Once completed, send the return by certified mail.  Lost in the mail goes right up there with “the dog ate my homework” on the Mount Rushmore of excuses.
• Don’t  be afraid to ask for help – Find a good tax professional in your area who you trust.  Don’t make unnecessary mistakes just because you think you can do it all by yourself .  Live to fight another day. 

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