Avoid These Tax Blunders

Don't get in over your head with these common mistakes.

Small businesses often get in trouble over payroll taxes andborrowing from trust fund taxes, says Michael Savage, a 30-year taxlaw veteran and author of Don't Let the IRS Destroy Your SmallBusiness: 76 Mistakes to Avoid. "[Small-businessowners] see that large chunk of withheld social security and incometaxes sitting in their accounts for anywhere from a few days to acouple of weeks before it gets sent in to the IRS, and they'vegot bills to pay. So they say, 'Well, I'll just use thatmoney to pay the bills. When it comes time to send it into the IRS,I'll have some more money in and then I'll send it in.'And of course, when it comes time to send it in to the IRS, theydon't have it.

"The one thing the IRS makes very sure of and audits verycarefully is the payment of trust fund taxes. And what many smallbusinesspeople don't realize is that they're personallyliable for those taxes, even if their company is a corporation.They, as the owners or as the COOs of the corporation, havepersonal responsibility to get those trust fund taxes paid. And ifthey don't, the IRS can come take their home and their car andtheir kids' college education money and anything else to getthose taxes paid."

Editor's Pick

Everyone Wants to Get Close to Their Favorite Artist. Here's the Technology Making It a Reality — But Better.
The Highest-Paid, Highest-Profile People in Every Field Know This Communication Strategy
After Early Rejection From Publishers, This Author Self-Published Her Book and Sold More Than 500,000 Copies. Here's How She Did It.
Having Trouble Speaking Up in Meetings? Try This Strategy.
He Names Brands for Amazon, Meta and Forever 21, and Says This Is the Big Blank Space in the Naming Game
Business News

These Are the Most and Least Affordable Places to Retire in The U.S.

The Northeast and West Coast are the least affordable, while areas in the Mountain State region tend to be ideal for retirees on a budget.

Business News

I Live on a Cruise Ship for Half of the Year. Look Inside My 336-Square-Foot Cabin with Wraparound Balcony.

I live on a cruise ship with my husband, who works on it, for six months out of the year. Life at "home" can be tight. Here's what it's really like living on a cruise ship.

Business Ideas

55 Small Business Ideas To Start Right Now

To start one of these home-based businesses, you don't need a lot of funding -- just energy, passion and the drive to succeed.

Business Solutions

Master Coding for Less Than $2 a Course with This Jam-Packed Bundle

Make coding understandable with this beginner-friendly coding bundle, now just $19.99.

Business News

The 'Airbnbust' Proves the Wild West Days of Online Vacation Rentals Are Over

Airbnb recently reported that 2022 was its first profitable year ever. But the deluge of new listings foreshadowed an inevitable correction.

Starting a Business

Ask Marc | Free Business Advice Session with the Co-Founder of Netflix

Get free business advice during our next Ask Marc, live Q&A, on 3/28/23 at 3 p.m. EDT. You don't want to miss it—send in your questions now.