There are two tax problem areas that small business owners fall into that lead to trouble with the IRS. This article will discuss these problem areas briefly and then give you five good resources to help you avoid them.

Two common small business tax problem areas:

1. New to running a business and bookkeeping (e.g. business structures like LLC’s S-Corps, etc.).
2. Red tape: There’s a dizzying number of rules, procedures, forms, and processes to follow.

Small Business Tax Problem #1 – New to Running a Business

New to running your own business? We often start our small business with a dream, the back of a napkin and a credit card. Tax planning generally isn’t on the short list. If and when taxes come up it’s often at the last moment and complex financial and tax decisions are not given their due. Later, you hear about tantalizing tax write offs. These exist, but only if you qualify. This false expectation of entitlement and lack of understanding about all the arms and legs of running a business is often what gets small business owners in trouble.

Small Business Tax Problem #2 – Confusing & Overwhelming Choices

Just the question of how you should structure your business, be it a sole proprietorship, LLC or Corporation can turn into a maze. These structures have potential benefits and pitfalls and cover more areas of business than just taxes. There are the legal protections , then the different methods of accounting, record keeping, business licenses, and the list goes on. It’s easy to get bad advice.

5 Resources to Help Small Business Avoid Tax Pitfalls

Stay out of trouble by educating yourself and then investing in advice from experienced resources. Even when you’re putting your business together on the cheap, you can minimize high cost resources like CPA’s, Attorneys, or Tax Experts by reading up on the basic issues and then keeping your time short and focused with your chosen advisers. Here’s a list of five resources on the web where you can further your small business tax education.

1. The Small Business Center at the IRS » Visit
2. SCORE – The Small Business Partner of the Small Business Administration » Visit
3. Teaspiller – An online directory of qualified Bookkeepers and CPA’s in your area » Visit
4. WageFiling.com lets you prepare, print and e-file W2 Forms or 1099 Misc forms without having to purchase tax forms, special envelopes or software. » Visit
5. Tax Mama – Get your tax questions answered by experts in the Tax Mama forums » Visit

Here are two bonus links.

Employment Taxes

Payroll taxes, Social Security and Medicaid are particularly confusing. This is a common small business tax problem that I help solve for my clients. The IRS page is one of those pages that might make you cringe (it looks like a lot of work!) but it’s a necessary resource nonetheless. » Read More

This article on BusinessWeek is useful for s-corp shareholders wondering if they need to pay themselves a salary (and therefor payroll taxes). » Read More

Until next time,

Jeffrey I. Fouts, Tax Attorney

Here’s a bio of sorts. I’m happily married with two kids. I’m a real small town tax lawyer (Ellijay, pop. 1,584) not some fictional marketing character. I represent tax payers before the IRS in all 50 states. I have 18 years experience, thousands of satisfied clients, about 8 critics at last count, and an A+ BBB Rating.

I’m a member in good standing of the bar and have active memberships in courts from Georgia to Washington D.C. My competitors covet my Google ranking but my clients covet my sound counsel. I deal directly with my clients and have a small, tireless staff. You can put off your tax problem, or put us to work.