As Halloween approaches, it's easy to fall for tricks, but don’t let tax myths spook you! Business owners often encounter misleading advice, which can lead to confusion and stress. Understanding the facts early on can prevent penalties and keep your business running smoothly.

Myth #1: I can write off anything if I say it’s a business expense

Reality: Only ordinary and necessary expenses qualify. Attempting to deduct personal costs like vacations or clothing won’t withstand IRS scrutiny.

Myth #2: If I file an extension, I get more time to pay my taxes

Reality: An extension only gives you more time to file, not to pay. Missing the April 15 payment deadline can result in penalties and interest.

Myth #3: I’m too small to get audited

Reality: Any business can be audited. High deductions or unusual transactions can increase your risk, so maintain accurate records.

Myth #4: Bank statements are enough to prove business expenses

Reality: Bank or credit card statements don’t show what you purchased or why it qualifies. Keep detailed receipts, especially for travel, meals, and mixed-use items.

Myth #5: Paying someone as an independent contractor means I don't have to worry about payroll taxes

Reality: Worker classification depends on control and work conditions. Misclassification can lead to fines and back taxes.

In conclusion, it's crucial to question tax tips you hear and seek professional guidance when unsure. Don’t hesitate to reach out for a quick tax check-in or to ask questions before making decisions that could cost you money. We’re here to help you navigate and avoid these traps.