Running any business demands a high level of organisation and if you’re not careful, things can quickly get out of hand. This is especially true when it comes to paying your taxes, which is something we all have to do.
Here are a few typical tax mistakes that small business owners make and how to avoid them.
Choosing The Wrong Type Of Business Registration
There are numerous ways that you can register a business and getting this wrong can be very costly. Using a top Thai BOI law firm is the best way to make an informed decision on the type of business to register. You will likely pay more tax than you should if you choose the wrong type of business registration and that would be a costly error to deal with.
Waiting Until Taxes Are Due Before Hiring A Bookkeeper
Some small business owners mistakenly think that they can call in a bookkeeper just prior to the due date of their tax returns. If you do this, the bookkeeper would probably turn down the offer when you hand them a box full of receipts, which would be a nightmare scenario for anyone to have to deal with. It is important to remember that bookkeeping needs to be done from day one and any delay could leave you in a big mess.
Spending Tax Money
If things are tight, it might be tempting to dip into your tax money, which you can easily put back when the time is right. All it takes is a bit of bad luck, and you can end up with a tax bill that you are unable to pay. That would involve paying a penalty, which would increase every day that your payment is late. If you engage the services of a local accountant, they would make sure that you have the funds to pay your tax bill, plus they would ensure that you pay the minimum amount and on time.
Making Cash Payments To Employees Or Contractors
This can certainly land you in deep water. If you have money that you cannot account for, this is a red sign to the tax department and they are likely to carry out an audit, which you definitely don’t want. You should record all financial transactions and avoid paying cash is at all possible. If you are unsure about anything, ask your accountant what you can and cannot do.
Failing To Claim Tax Deductions
If, for example, you decided to prepare your tax forms yourself, it is possible that you are unaware of certain tax deductions and that will cost you money that you can ill afford. Every government offers small businesses tax incentives, but if you do not claim, the government will say nothing and happily bank the extra money. If you hire a bookkeeper at the very outset and an accountant prior to your tax returns date, you should be able to avoid all of the above tax mistakes, and that should keep the government out of your business.