If you own a small business In the United States, it is essential that you know the deadlines and requirements to file your taxes correctly and avoid penalties.
As indicated to Enlace Latino NC Ana Naranjo, spokesperson for TurboTax, a company that provides bilingual assistance in tax matters, the dates for filing taxes are not the same for businesses that personally.
“Usually the date for filing business taxes is March 15, but this year it falls on a Saturday, so it has been extended until Monday, March 17,” he told this newspaper.
This date applies to LLCs and small businesses operating as partnerships.
For those who have a single-member business, the rules are different. “When you are single-member LLC or they are individual owners, they report their income within their personal taxes,” Naranjo said.
Related: What is a self-employed person?
Common mistakes when filing taxes for businesses in the United States
One of the most common mistakes small business owners make is confusing personal and business expenses. “We see some people reporting personal expenses as if they were business expenses, which can lead to problems with the IRS,” Naranjo warns. A common example is the deduction of meals: “Meal expenses can only be deducted 100% if it is a meal provided to clients. If you are traveling for work, your meal is only deductible 50%.”
Another common mistake is the poor management of vehicle miles. “Some people report work miles and also gas expenses. But this is incorrect: it should be one or the other, not both,” the expert emphasizes.
Consequences of making mistakes in taxes
Errors in the declaration can lead to audits or adjustments by the IRS. “If the IRS detects an incorrect expense, it simply does not allow it, and the business owner will have to pay taxes on that amount, plus interest and possible penalties,” warns Naranjo.
Penalties can be steep if taxes are not filed on time. “The IRS applies a 5% penalty on the amount owed, which can go up to 25%, plus interest of between 4% and 6%.”
Can an extension be requested?
If you are unable to file your return on time, you can request an extension of up to six months, That is, until September 15. However, there is one important condition: “If you have not made your quarterly payments and you owe a significant amount, the IRS may reject the extension,” warns Naranjo.
Quarterly payments are due on four key dates: April 15, June 15, September 15, and January 15 of the following year.
Tips to maximize deductions
To reduce the tax burden legally, there are several deductions that small business owners can take advantage of. “Many overlook that they can deduct business travel expenses, miles used for work, and even a percentage of the costs of operating from home,” says Naranjo.
If you work from home, you may be able to deduct part of the utilities you use for your business. “Internet, cell phone, and a portion of electricity and home maintenance can be deductible expenses,” she adds.
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