Filing tax returns on time and without error is important for small business owners in Illinois. While this time of year can be stressful, business owners need to focus on getting their tax returns prepared appropriately based on the laws in the state and the type of business they operate. Tax returns that are filed with errors, incomplete information, or improperly can be costly to fix and in some cases, can lead to legal issues. Small business owners can be aware of the most common mistakes, so they know what to avoid.
Avoid these mistakes
One of the most common tax-related mistakes made by small business owners is not knowing how to register their business. This is mostly applicable to new business owners or those who have made significant structural changes in their business. Filing a tax return under the wrong entity can cause delays in processing and much time to fix the problem. Plus, this mistake may require one to pay fees or penalties.
Another issue faced by some small business owners is not maintaining proper records throughout the year. Whether one chooses to work with an accountant or complete the tax return without assistance, good record-keeping helps one file accurate information. Lastly, small business owners should know how to properly compensate themselves and how to document that information on their tax returns.
Tax issues can be costly and time-consuming
Facing an issue with one’s tax return can be very difficult for a small business owner. When an issue arises, it’s helpful to work with an experienced professional who understands Illinois tax laws. An attorney can provide advice and guidance to help a small business owner make the proper decisions to remedy any tax issue.