4 Tax Mistakes That Business Owners Should Avoid Making

It is very common for business owners to make mistakes when it comes to taxes.  These are four of the big mistakes that businesses should avoid making when it comes to paying taxes:

1. Don’t deduct personal expenses as business expenses.  The Internal Revenue Code (IRC) permits deductions for “ordinary and necessary expenses,” but those expenses must be related to the business.  A taxpayer cannot use this deduction for personal expenses. 
2. Be careful to avoid too-good-to-be-true opportunities.  There are many tax breaks offered in the Federal Tax code, but business owners should be wary of promoters that offer something that looks too good to be true.
3. Aggressive tax planning can lead to consequences.  Being overly aggressive in tax planning could potentially lead to expensive consequences. 
4. Bad tax strategies can lead to other legal consequences.  Making mistakes in planning for taxes could potentially lead to other legal consequences. 

See Steve Parrish, 4 Tax Mistakes Business Owners Make And How To Avoid Them, Forbes, October 26, 2015.