Small businesses and entrepreneurs have plenty of options for their tax write-offs, from home office space to inventory and beyond. Some even claim Spaghetti-Os, cosmetic surgery and undergarments. There's no question that taxes, particularly new ones, create anxiety for small business owners and entrepreneurs. In a new study released today, March 18 by online accounting software provider Xero, one in four accountants say that government regulations and tax policy had the biggest impact on small businesses and entrepreneurs this year. What's more, one in 10 accountants attribute this to the uncertainty around the Fiscal Cliff.
But creative write-offs aren't the only mistakes that small businesses and entrepreneurs make on their taxes. The biggest mistake, according to the 400 accountants polled, is not keeping up-to-date financial records, followed by not understanding tax obligations.
“The most common question I’m asked is, ‘How can I save more money? I’m scared of all the new tax increases’, said Jody Padar, Xero partner and CEO and principal of the New Vision CPA Group, in a prepared statement. “I wish I could provide a universal answer, but the fact is no two businesses are alike and there are many factors involved in financial planning. What I can say in all confidence is to keep a close eye on your finances, find an accountant you like and trust, and see them at least once a month.”