January 29, 2020 Business, CFO, CFO Agency, Money, Taxes

DIY is the Kiss of Death

DIY is the Kiss of Death

How hard can it be, really?  

Do you find yourself thinking this as you sit down to begin working with all the year end tax filing deadlines?  After all, accounting is not rocket science, right?

Today we are going to look at mistake #3 of our 5 Tax Mistakes Small Business Owner’s MUST Avoid series.  If you have missed the previous mistakes be sure to review them here:

Mistake #1 – Not using electronic filing systems.
Mistake #2 – Not getting updated information early enough.

Mistake #3 is not trusting a professional to file your forms and doing it yourself. 

Throughout the year there are many checks and balances we go through to ensure accuracy of information in a timely manner.  So here is my question for you; What is the highest and best use of your time?

The likelihood of errors is significantly higher when these checks and balances are not in place . We are often called in to fix the errors that result without them.  Unfortunately, the errors will come to light when an employee or vendor has an issue with their taxes and/or you are subjected to an audit.

When errors are identified it can often lead to IRS penalties and interest.  They are not overly forgiving when it comes to errors!

So what are some of the errors we see most often?

Payroll – Filing W2 information without ensuring the reporting that has been done all year matches what you are filing on the W2.  This occurs when changes have been made retroactively and quarterly filings were not amended to match.

1099 Vendors – Who qualifies to receive them and do you have a current W9 on file for the vendor.  So often we have people reach out to us in February or later realizing these should have been done and honestly after January 31the penalties for late filing can be significant.

Co-mingling of funds not properly documented – Without tracking this all year long it can become very costly to recreate.  Typically this is where most business owners lose a lot of write offs. If these transactions are not properly documented you have lost the asset protection you may think you have with your entity structure.  In 2019 we saved our clients an average of $8,312.64 finding missed write offs. Would you like some help finding yours?

If you are feeling like your accounting needs are still small enough that you don’t really need a professional on a regular basis to help you out, I encourage you to consider two things:

  1.  Get your systems set up the right way so the likelihood of you doing it correctly yourself is higher.
  2. Have a professional review your work before submitting it to the IRS.

Give us a call  while there is still room in our calendar for a CFO Review. We will get you started on the right foot with the best systems for you and finding your lost write-offs!

In Abundance,

Sue

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