It may be a little late to dispensing tax advice, but often the best time to start preparing for next tax season is while the IRS is still fresh on your mind. We all know the tax code is needlessly complicated, and a lot of business owners make the same mistakes when filing their taxes. The most likely mistake to trigger an audit? Mixing business and personal expenses, followed by taking excessive deductions, according to a recent survey of accountants by Xero.
But small business owners are also blowing it by failing to take some deductions they deserve. About 33 percent of accountants say not deducting a home office is the biggest item small-business owners overlook, while 24 percent say the biggest goof is failing to take correct deductions for hiring new employees.
Why it matters to your business: If you're truly entitled to the home office deduction, go ahead and take it. When in doubt about any tax-related issues, ask a professional. About 20 percent of the accountants surveyed say the biggest mistake entrepreneurs make is only talking to their accountants at tax time instead of getting his or her advice all year long.