Entrepreneurs are go getters. These business men and women have that extra grit that’s needed not just to get ahead in the business world, but to forge their own path. As such, these canny business experts are always looking for new ways to maximize their bottom line. One news source that is dedicated to this group, Entrepreneur, recently published a piece with some advice on how to mitigate costs and maximize a business’ bottom line.
One of the top tips: Self-employed entrepreneurs should avoid irking the Internal Revenue Service (IRS).
How could a business “irk” the IRS?
Unfortunately the ways a business could get on the wrong side of the IRS are too plentiful to include in a single post. However, three of the most basic examples include failing to pay taxes, making the payments late and commingling personal and business expenses.
How does this hurt my business’ bottom line?
A failure to pay or to make late payment of taxes often results in additional penalties and fees. These costs add up quickly and can take a big chunk out of your bottom line.
The IRS also frowns upon mixing of personal and business earnings and expenses. Get a separate credit card and bank account for your business. Keep separate records. This will make it much easier to sort through any questions the IRS may have in the event that the agency makes contact.
What should I do if the IRS contacts my business?
In some cases, the IRS may reach out with questions either in person or through a mailing. If this happens, it is wise to take the contact from the agency seriously. The contact could be the sign of an upcoming audit or other tax issue.
As such, it is often a good idea to seek legal counsel. An experienced tax lawyer can review the notice from the IRS and provide counsel. This could include a discussion of how the notice could impact your business as well as options that are available to ensure your business interests are protected.
