📆 Day 9: Common Mistakes First-Time Filers Make

 📆 Day 9: Common Mistakes First-Time Filers Make

Avoid These Tax Pitfalls & File with Confidence

Filing your taxes as a first-time business owner feels like stepping into a maze of deadlines, forms, and deductions. But don’t worry—many of the mistakes new filers make are easy to avoid once you know what to look out for.

Here’s a breakdown of the most common missteps and how to sidestep them.

❌ Mistake #1: Mixing Business & Personal Expenses

It’s tempting to swipe one card for everything—but it clouds your financials.

✅ Solution: Open a dedicated business bank account and only use it for business transactions. Clean books mean easier deductions and fewer audit risks.

❌ Mistake #2: Forgetting Quarterly Estimated Taxes

Waiting until April can cause sticker shock—and penalties.

✅ Solution: If you expect to owe more than $1,000 in taxes, mark your calendar for quarterly payments (April, June, September, January). Use IRS Form 1040-ES or talk to a CPA to set your targets.

❌ Mistake #3: Not Tracking Deductions Year-Round

That cozy coffee shop meeting counts—if you record it.

✅ Solution: Use a simple spreadsheet, app, or planner insert to log deductible expenses like mileage, home office use, subscriptions, and meals tied to business.

❌ Mistake #4: Filing Late or Incorrect Entity Type

Missing deadlines or mislabeling your business type (sole prop vs. LLC vs. S-Corp) can delay processing or trigger penalties.

✅ Solution: Know your deadline! March 15 for S-Corps, April 15 for most others. Double-check your entity type when using tax software or hiring a preparer.

❌ Mistake #5: Ignoring Self-Employment Tax

First-time freelancers often forget that Social Security and Medicare taxes aren't withheld.

✅ Solution: Plan for self-employment tax (~15.3%) by including it in your estimated payments. Consider an S-Corp election if you're earning consistently and want to optimize payroll.

🧾 A CPA’s Quick Tip

Keep a folder or digital album labeled “Tax Year 2025”. Drop receipts, screenshots, invoices, and mileage logs into it all year. You’ll thank yourself in April.

📌 Final Thought

Tax filing doesn’t have to be scary—it just needs a plan. By avoiding these common mistakes, you set the stage for smoother returns, smarter deductions, and stronger business habits.