Running a start-up can realistically be a daunting task. Not only does the business owner have to go through multiple risks and issues on a daily basis, but even the rewards earned are subject to assessment, especially the finances. Managing the finances of a company can be extremely challenging in the absence of a tax accountant in that regard. So, given the intricate nature of taxes and finances, numerous misconceptions have developed over the years. In this blog, we will debunk these myths.
- Uniformity of taxes between employees and the self-employed
Freelancers and small agency owners can expect to pay more in taxes to the government than typical employees. This is because, unlike employees who have taxes automatically withheld from their pay by their employers, freelancers and small agency owners must handle their taxes independently, leading to a greater tax liability. Conversely, a small business is required to remit the complete sum of social security and Medicare taxes to the government.
- One needn’t worry about taxes until the tax season
A year-round strategy for taxes is one of the wisest ways of getting your finances straight. So, whether you’re working with an accountant or doing your taxes yourself, a regular habit to do the taxes should be the part of your financial strategy, so that you don’t have to tussle with the taxes that one time of the year. Thus, incorporating a year-round strategy is a must.
- Side jobs needn’t worry about tax issues
A lot of people work side jobs to make ends meet and it’s a common misconception that people working side jobs don’t have to worry about taxes. It is important to note that if a person is earning more than a certain amount, he/she is subject to be taxed on that basis. Hence, side jobs are not immune to being taxed!
- More expenditure means bigger tax break
A lot of times, business owners believe they must increase spending prior to tax season to qualify for larger deductions. Some may even incur debt to reduce their tax liability. This approach is not recommended, and the majority of tax experts specializing in small businesses emphasize that purchases should only be made if they genuinely benefit the business and are essential.
Navigating the tax landscape for startups and small businesses requires careful consideration and debunking of these common misconceptions. This is where comptable impôt ACCOTAX are adept at providing effective solutions related to several tax issues and accountancy intricacies.
