Nothing stings more than having to pay a late fee, court expense, fine, or tax penalty of any kind and of any amount. There’s something truly annoying about being legally compelled to fork over even a small amount of money, especially when you know the situation could have been avoided. All it takes, in fact, is a little planning to avoid the vast majority of additional taxes, fines, and fees that are so common for new businesses. What are they and how can your company stay clear of financial punishments of every variety? Here’s a short list, along with suggested solutions.
Unfortunately, there are a lot of tax related pitfalls that await owners of small business. For instance, you can amass substantial additional expenses in the form of interest and penalties for failing to pay quarterly tax bills if your company is required to pay four times per year. In most cases, the problem is with owners who underpay their estimated quarterly amount. There are also significant penalties for late payment of taxes, not filing the proper forms for a given period, and taking part in schemes that might be categorized as tax fraud. Fraud is usually not a common problem for owners who hire professional accountants and who have honest intentions. But even late payment penalties can cut into precious revenues. Hiring an in-house or outside accountant is the best preventive measure. Some companies use local CPA firms that specialize in business taxation. Others keep a qualified accountant on staff who takes care of all tax-related matters.
Any owner who operates a vehicle fleet as part of the business operation knows how transportation-related fines and penalties can add up fast. The list is a long one, and includes financial slaps on the wrist as well as much larger penalties for things like not keeping truck registrations current, using the wrong kind of fuel, overloading drivers’ schedules with too many hours, not using crews with the proper credentials, and many more. One of the easiest ways to prevent a majority of transport fees is to use an ELD compliance solution. The main advantages are low cost and ease of use. Not only will you be able to prevent hours of service violations, but will always have a documented record of each driver’s hours, routes, and stops.
Large companies that have thousands of workers often get in legal trouble when wage and hour laws are not followed to the letter. Whether that involves paying people lower wages than allowed by law, not compensating for overtime, or employing workers who are too young, you face stiff financial consequences and possible criminal sanctions if you engage in those activities. A common problem for small and new companies is documentation. Even if you have one employee or independent contractor, it’s imperative to keep accurate records of time worked, wages, any tax withholding amounts, and identification details. The easiest way to avoid all the tax messes is to outsource payroll functions to a professional agency or a CPA who specializes in the field.