Two recent polls by Manta found that 21% of small business owners are attempting to file taxes on their own, without help from tax software or an accountant.
Although you may do your best to avoid mistakes, they still happen. And when making a mistake filing taxes, the fines and the potential cost of an audit can become exorbitant. For example, if you own a C- or S-corporation and taxes are due with your return, an additional 0.5% penalty is imposed on the unpaid tax amount for each month the return remains unfiled.
Another potential trap is how small business owners are tracking expenses throughout the year. According to Manta’s polls, 30% of small business owners are still tracking their expenses with paper receipts—a “system” that practically invites mistakes.
It’s time to put away your shoebox full of receipts. Instead, start using apps like Expensify to turn your paper scraps into digital documents and accounting software like Freshbooks to keep everything else in order. Getting organized now will help you sleep well throughout tax season.
Methodology: Between 2/29/16 and 3/2/016, Manta surveyed 924 small business owners via onsite poll; margin of error +/- 3.22 percentage points. Between 3/2/16 and 3/3/16, Manta surveyed 600 small business owners via onsite poll; margin of error +/- 4 percentage points.
To learn more, visit Manta’s guide to Taxes for Small Business.