Four Common Mistakes Small Business Owners Make

It’s no secret that running a small business is no easy feat. In addition to wearing many hats and being pulled in many different directions, small business owners also have to be extra mindful of their budget and ensure that their business is running as efficiently as possible.

However, even with the best intentions, there are still some common mistakes that small business owners make. Here are four of the most common mistakes Commonwealth Tax & Insurance has put together of the most common mistakes small business owners make.

1. Not keeping a formal set of books
This is one of the most common mistakes people commit with finances. If you’re not keeping a formal set of books, you’re missing a lot of information you need to make sound business decisions. A set of books gives you the ability to track your revenue, expenses, inventory, and other important aspects of your business.

2. Choosing the wrong entity type of taxes
If you are unsure which entity type to choose for your taxes, it is best to consult a tax professional. Choosing the wrong entity type could result in paying more taxes than necessary. For example, if you are a sole proprietor, you may want to consider choosing an LLC instead. This could help you save on self-employment taxes.

3. Missing out on home office deduction
A professional accountant can tell you many ways of saving on taxes, but you need to get in touch with them. For example, many people do not know their home office can be included in deductions.

4. Not keeping a mileage log for business travel
Business owners can also show business travel as an expense and seek tax deductions in their taxes. But for that, one needs to manage and keep a tab on their mileage log so that everything is well sorted before filing taxes.

To avoid these and other mistakes, reach out to the experts at Commonwealth Tax & Insurance. We are certified public accountants, tax preparers, and financial advisors in Midlothian, Virginia. Our services for individuals and small businesses include tax preparation, retirement planning, accounting, bookkeeping, payroll processing, and Tax Planning. We serve clients across Midlothian, Chesterfield County, Richmond, Petersburg, Glen Allen, Henrico County, Ashland, Hanover County, and the surrounding areas.

Get in touch with us today!

For a complete list of our services, please click here. If you have any questions about certified public accountants, we’d love to hear from you. For more information, please call us at (804) 897-5228 or email us at mreid@comwealthtax.com.