Common prior accountant mistakes we see in practice are vast and many, however, we would like to highlight some serious mistakes that may be easily spotted by the right team early on.
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Here is the list we have compiled in the last decade worth of experience, we call this our top “dirty dozen” list of mistakes that can set any business back:
Organizational Accounting Mistakes
1) Missing essential legal documents or legal documents are not reviewed by the accounting team
2) Unnecessary S corporation elections to complicate tax filings and increase accounting, payroll processing fees needlessly as well as incurring tax liability incorrectly
3) Unconfirmed and unfiled S elections all while the owner operates as an S corporation without actual confirmation from the tax authorities
4) Incorrect entity type selection potentially triggering taxation due to the wrong setup
Operational Accounting Mistakes
5) Merchant processor (example: Square) sets up sales tax collection for a vendor that offers non-sales taxable services
6) Personal vehicles depreciated under a corporate entity as if the entity assets and the personal assets are one and the same (as with a disregarded entity LLC) – incurring audit and penalty risk
7) Regular leased vehicles depreciated as if the leased vehicle was an asset owned by the business or business owner
8) Inaccurate reporting of financial data that stems from poor communication with the accounting team
Strategic Accounting Mistakes
9) Missing common tax deductions, for example, reimbursements for the home office, health insurance, and vehicle travel
10) Hidden tax notices from the IRS and the State going back to the inception of the business
11) Needless registrations for payroll and sales taxes or registrations without any form filing (zero returns need to be filed regardless of activity once registered)
12) Basic audit proofing the tax position with the filing, some may be easy steps like correct itemization of receipts and mileage logs, by law, all contemporaneous requirements
Contact our Jacksonville Accounting Firm Today
The tax mistakes listed above are the most common mistakes we see, but there are plenty of more tax mistakes that businesses and individuals can make. If you have any questions or concerns, contact us today by using the form below or give us a call at (904) 330-1200. Our experienced CPA Firm in Jacksonville, FL can assist you and answer any accounting questions you may have.
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