I own my own business. How do I know if I'm reporting my taxes correctly?

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Question:

I own my own business. How do I know if I'm reporting my taxes correctly?

Answer:

If you own a business you must report taxes. Business tax reporting requirements vary depending on the type of business and the size of the business. In addition, profit and not-for-profit businesses have different reporting requirements.

There is a broad range of business tax reporting requirements for the State and Federal government. These include sales tax, losses, income, employee income tax withholdings, corporate taxes, and deductions. Due to the number of reporting requirements, (too numerous to count), you are advised to seek expert legal advice when in doubt.

Violations

The ‘I did not understand the law, so I am innocent’ plea does not work if you find yourself charged with reporting violations. Whether you know the law, or not, you are expected to file the correct documents. As a business owner you should become familiar with tax laws pertaining to your situation.

Failing to report taxes is a serious violation of the law. A business owner who fails to follow reporting requirements is subject to hefty fines and penalties, possibly even jail time. Common reporting problems include the failure to report withholding taxes for employees and the failure to report employees within the business.

Penalties

The IRS levies penalties on business owners based on their failure to report business taxes. If an owner does not classify or report an employee correctly and therefore fails to pay the required taxes and make withholdings the IRS will assess a fine.

Consult an Attorney

As a business owner you must be detailed in your reporting. The laws stretch to cover wrongful deductions such as writing off a traffic fine as a business expense. It is imperative to seek the advice of a Business Tax Attorney familiar with the latest tax laws and codes. The fines and penalties can ruin a business owner. A qualified attorney will help you navigate the system.

This article is provided for informational purposes only. If you need legal advice or representation,
click here to have an attorney review your case .

This site does not provide legal advice and users of this site should not interpret any of the information presented here as legal advice. The information provided merely conveys general information related to commonly asked legal questions. We are not a law firm and the employees responding to questions are not acting as your legal attorney. You should ultimately consult with a lawyer for your case.

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