Filing your business tax returns can be a daunting task. More so, managing commercial property taxes on your own is quite risky and may prevent you from processing your tax appeal.
Here are the common mistakes you should avoid when filing your tax returns.
Failing to keep track of your expenses
It’s imperative to keep track of your expenses, even if you have only a few people on your team. Ensure that you document your expenses promptly. Automate this process to save time and eliminate human error. Staying on top of your expenses will increase your chances of winning in the event of a tax appeal.
Each jurisdiction has its deadline for property tax assessment appeals. Most times, these deadlines are often short and strict. Failure to meet it means you’ll have to wait for the next cycle and pay more taxes.
Not paying your taxes on time
Endeavor to pay your taxes as at when due, regardless of the stage you are in your business. This applies to other taxes apart from property tax. The only reason why shouldn’t pay quarterly taxes is if you fall under the exemption.
You stand a better chance of ending up with a small bill if you’re consistent. More so, being proactive will help you steer clear of other issues later on.
Misrepresenting your assets
Some common examples include misreporting personal property and claiming your equipment as supplies. Many business owners still make this mistake which often increases their annual tax bill or attracts heavy fines.
Unlike supplies, equipment and tools aren’t disposable items. Understanding the difference can open the door to manufacturing property tax reduction. The ideal way to avoid this mistake is to comply with property tax law.
It’s ideal to rely on the appropriate legal structure for your company. This is because the type of business you run will influence the taxation process.
Ignoring your jurisdiction requirements
Each jurisdiction has rules and regulations that you’re expected to adhere to for a smooth appeal process. If your business is located in different states, then you must understand how the appeal process works in each location.
Not hiring a property tax expert
Filing your property taxes on your own isn’t a smart way to save money. In fact, you may be unable to spot tax-saving opportunities. Another thing is that you will likely make mistakes because of the limited knowledge and experience you have.
You need tax professionals who have what it takes to conduct an annual assessment of your commercial property. This is crucial if you want to reduce the risks surrounding commercial property tax.
Try to do due diligence when choosing a property tax advocate. Check online reviews and ask for references to avoid wasting time and other resources.
Avoiding these mistakes will make your tax filing process seamless and help you save money.
Ensure that you take a proactive approach to manage your commercial property tax. This starts with developing a foolproof strategy for reviewing your paperwork and assigning relevant tasks to team members.