taxation services accuprosys

Silly Tax Mistakes Made by

Businesses Avoid these silly tax mistakes and face auditors without breaking a sweat

.

1Accuprosys.com

Taxation issues are surely very

“taxing”.

OListed here are the most silly tax mistakes made by businesses, especially small business and SMEs, that they inadvertently fail to avoid.

The Auditing bug cannot be avoided

and businesses might as well be prepared

for it.

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1. Not maintaining financial records

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Business heads are so engrossed in numbers: sales projections, profits, revenue, et al. But the numbers they should be most concerned with are the ones on their financial records. Taxation services

Yet, these are the very entities they ignore. Businesses should keep their records and annual accounts updated.

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What happens if you fail to do so?

You end up paying lower taxes or higher taxes than you should.

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Even if you did pay the correct amount of tax, auditors will still raise

eyebrows (and issues of course!) if you do not have proper financial

documents to substantiate the taxes

paid.Accuprosys.com 7

2. Overlooking deductible expenses

Taxation services - Accuprosys

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Do your financial records maintain business and

personal expenses separately?

Can you track your deductible expenses?

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If not, then you are bound to stay out of the good books of

auditors.

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Proper financial records are those that ensure business and

personal expenses are clearly distinguished.

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Payments made from personal accounts for business purposes are deductible. Anything other

than that is not deductible. Remember!

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3. Not staying informed about legal updates on taxation

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One of the silliest taxation mistakes made

by businesses is that they do not stay well-informed about changes in tax laws

.

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Businesses should follow notifications and circulars

to keep themselves abreast about any

changes in tax laws until they release an app for

that!

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4. Indulging in tax frauds

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Some tax frauds are major and some are

not.

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Big or small, a tax fraud is perhaps the biggest mistake you

could make to jeopardize your

business.

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Some companies pocket a percentage of indirect taxes levied on

customers.

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Others find other means. Auditors have

their way of identifying funny tactics. So quit

the bad and get honest.

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5. Not correctly distinguishing independent

contractors and internal employees

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Confusion between independent

contractors and employees on your

payroll may land you in some serious trouble.

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Tax liabilities are different for employees

and independent contractors.

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Employers are required to pay a percentage of employment taxes for workers employed by

them.

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Non-payment of these taxes attracts penalties

and interests. Stating that an employee is an

independent contractor to avoid taxes is a big no-no.

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There are a zillion legal ways to save on taxes. Companies should seek

assistance from reputed accounting and taxation service firms or hire corporate advisors to help them

make the right investment choices and to save on taxes. Going the

illegal-way to avoid taxes not only attracts gruesome penalties but also poses a risk to the reputation of the

organization. Accuprosys.com 26

Centre for Innovation and Entrepreneurship

C-4, IIT-H Foundation, Gachibowli, Hyderabad

9618402751, 9000600247

Reach us at:[email protected] [email protected]

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For more details, please visit: www.accuprosys.com

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