Every year you probably say that you’re paying too much in taxes. You’re probably correct. Some of this may be because of your tax bracket, your business structure or some other factor, but it may also be because of the mistakes you’re making. Here are three, big, stupid mistakes I see small business owners make all the time with their taxes.

Mistake #1: You have the wrong accountant.

A lousy accountant is one that appears to be working for the IRS – always saying no, always shaking his head, always sighing and muttering “you can’t do that.” A good accountant is working for you by making suggestions, offering options and working the law to your advantage. You want an accountant that’s smart and motivated to help you save your taxes. He should be calling you during the year and not just sitting down with you for one meeting when it’s tax time. He should be proactively thinking of ways to help you reduce what is the biggest expense in your business. If that’s not a description of your accountant then it may be time to find a new one.

Mistake #2: You don’t plan.

A smart accountant is a valuable advisor. So meet with her at least two to three times a year and not just a week before the end of the year. Things change all the time and you’ll need to keep your accountant up to date on everything that’s going on in your business and your personal life. A good accountant will be looking at your quarterly data and making adjustments to your estimated taxes, offering suggestions to reduce your current year’s tax liability and even warning you of potential liabilities that you may not see coming. She’ll be current on the latest regulations and be thinking of ways to help you keep your tax payments to a minimum. You, on the other hand, should be giving her plenty of time to think about this because you’re meeting with her well before her busy season begins.

Mistake #3: You don’t pay attention.

When it comes to boring stuff, reading about taxes is up there with C-SPAN documentaries. But think about this, you scour the web to save 5% on a new laptop.

Why not spend some time trying save on your own income?

The smartest clients I know pay attention to their taxes. They read and even attend a seminar or two once every other year. They do this so when they meet with their accountant they have questions to ask and aren’t operating in the dark. They understand that every dollar saved is another dollar that can be put toward a family vacation, a home project or a case of premium craft brew.

It’s OK to be stupid when watching Jeopardy or making your little nephew laugh. But don’t be stupid about your taxes. Get a great overview on the best ways to save money on your taxes with this article from Small Biz Ahead.

Join writer and small business owner Gene Marks each Wednesday on the Small Biz Ahead podcast. You can also submit a question for Gene to answer on the podcast.

24 Responses to “Three Stupid Reasons Why You’re Paying Too Much in Taxes”

  1. Rob Lee

    this is a great reminder… i have gotten very lazy in this area… and havent met with my cpa in years except to review my personal file once a year… and i know i am loosing money by not meeting 4x a year just for my business! this reminder stings but much needed.. thanks

  2. Cheryl Gill

    Good Morning Gene
    I have a CHA but looking for one who would
    search out more for my company.

    Any suggestions. If you do please call me at
    773 407-0585. Thank You

  3. Hello,

    Great article!! I am an accountant and everything you said is true. The problem is that I have many small business clients who I would like to meet with several times per year to review their situation and help lower their taxes. The problem is 1. They are too busy or 2. They are too cheap and they don’t to pay my extra fees for this extra service. Not realizing that some of the items we discuss and some of the ideas I have could save them hundreds if not thousands of dollars in income taxes every year. And its very hard to do tax planning now during the crazy and busy tax season.
    These clients are penny wise and pound foolish!!

    Brian

  4. Yvonne May

    This is great info. I own a financial management company and I provide specialized services to my clients. It is very true that most of them do not pay attention and this makes me work very hard to minimize their tax liability (legally). I get favorable results always! Check out my LinkedIn profile.

  5. I own a financial management company and 90% of my clients do not pay attention either. This makes me work harder for them but my work is specific to each one’s need. So they get the best service and pay minimal taxes regardless. Connect to me on LinkedIn.

  6. Will – why would the accountant always be presumed to be a man? And why did you feel the need to comment on that part of the article. A little equality for a change. Love it!

  7. C. Lane

    I am offended that you feel those of us that choose to do our taxes ourselves are stupid. I have tried using accounting services in the past (been in business 25 years) all it did was cost me money. A lot of money, and wound up costing more in taxes to boot because tax line assignments and account classification were completely wrong, 4 times, 4 different cpas.

  8. This message is for Peter Koblan: David Brotman, of Jacobson Brotman CPA, is an excellent CPA who specializes in the dental field. In 23 years of owning 3 dental staffing companies, my husband and I marvel at the genius of David. You will not be disappointed as he really knows taxes and your business. Give him a call @ 757-422-4445

  9. John Kettles

    I agree with you, Mary. More than half the accountants I know are women, so the need to comment is bizarre. C’mon GUYS, the anti-Political Correct theme is getting tiresome!

  10. Thanks you so much, we changed this year to a very nice and knowledgable lady. We understand the need as we should be trying to efficiently run our business and do not have the capacity to keep up on all aspects of tax law. It is alway good to have a second set of eyes helping us watch things.

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