According to a recent survey released by DC based research firm Clutch, 93% of small business owners “rate themselves as somewhat or very confident in their ability to accurately file taxes”, however 30% still believe that “they overpay their taxes and could claim more deductions and credits.”
As a small business owner myself I understand the sentiment. You work hard, you make money, you file your taxes, and at the end of it all you get a response from your local or federal government telling you how much you owe (usually more than you’re willing to give) making it feel as if you’ve missed something in the process.
This year is the first time my company has used a bookkeeping service, basically a company that manages the sales and expenses, and I can say it has helped tremendously. From helping to identify expenses and saving money in key opportunities having an expert manage the day to day from a financial aspect is helpful.
“Simple things like losing receipts or misclassifying expenses. And if this is done over a long period of time, this can lead to a long list of errors that are hard to untangle, especially if things have to be looked back or the IRS wants a look,” Riley Panko at Clutch said
In addition to the issue of potentially paying too much taxes, 27 percent of respondents to Clutch’s survey “don’t keep their business and personal finances separate, and almost that many who don’t say they’ve experienced challenges in mixing business expenses with personal ones in the last year.” Not correctly separating business and personal can be an issue and another way in which people may be paying too much in taxes.
Clutch used responses from 302 small business owners and managers for its survey, full results of which, along with accounting tips, are posted online.