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