ArtsAutosBooksBusinessEducationEntertainmentFamilyFashionFoodGamesGenderHealthHolidaysHomeHubPagesPersonal FinancePetsPoliticsReligionSportsTechnologyTravel

Avoiding Common Small Business Tax Mistakes

Updated on December 18, 2018
Luke Fitzpatrick profile image

In my spare time, I enjoy writing about parenting, productivity, and home improvement.


Small businesses have tax requirements that can be a real pain to work through. There are numerous forms that need to be filled out, deadlines to hit, and deductions to claim. For a busy small business owner, trying to work on their business, it can be tempting to rush through these requirements, and unfortunately, a lot of small business owners do make mistakes with their taxation responsibilities.

In fact, there are at least 60 common taxation mistakes that small business owners make. Mistakes made with taxation can be incredibly expensive. So, what can small businesses owners do to make sure they’re not making simple and unavoidable errors?

1) Hire an accountant or tax specialist

Unless you’re confident that you understand the full extent of your taxation obligations, and can dedicate the necessary time to it, then it might be a better idea to hire a specialist to handle it for you. You’ll often find that a professional will be able to reduce your tax burden and find additional deductions that you hadn’t considered, so they’ll pay for themselves in large part anyway.

2) Make sure you pay back your loans

As a small business owner, it’s easy to mistake your business’ revenue as your income, but tax works a little differently than that. If you withdraw funds from your business, you need to either pay it back by the end of a financial year or expect to pay tax on it.

To help you separate your business income from your personal income, it’s a much better idea to give yourself a salary.

3) Keep accurate records

A small effort in an organization can go a very long way come tax time. Having an effective and efficient filing system to hold copies of all invoices and records can save a lot of time in the event of an audit, and also address any discrepancies and prevent fines for not having adequate records.

Remember, you also need to keep records for five years.

4) Understand deductions

Deductions are critical to small businesses. But it’s important to know which deductions you’re able to claim.

Some of the key deductions for small businesses include:

  • The purchase of business assets up to $20,000 in value—until 30 June 2019, any purchase of equipment for the purposes of the small business of up to $20,000 in value can be immediately written off.

  • Prepaying expenses—Paying for an insurance policy, utility bill or professional subscription annually, in advance, can be a deductible, though be aware that doing so might reduce your available deductions in the next year.

  • Business account and loan expenses—Fees and interest from your business accounts and loans might be deductible.

Additionally, if you are self-employed, be aware that additional deductions might apply to you. For example, travel for the purposes of business, the expenses in maintaining a dedicated home office (just make sure that part of the house is explicitly and exclusively dedicated to work), and more. This handy guide will walk you through all the tax tips for self-employed small businesses.

The ongoing health of your business really does rely on you meeting your tax obligations accurately. Make sure that you’re getting completed and defensible tax returns and other documents into the ATO on time, and you’ll avoid any nasty surprises in terms of audits or additional money owed.


This website uses cookies

As a user in the EEA, your approval is needed on a few things. To provide a better website experience, uses cookies (and other similar technologies) and may collect, process, and share personal data. Please choose which areas of our service you consent to our doing so.

For more information on managing or withdrawing consents and how we handle data, visit our Privacy Policy at:

Show Details
HubPages Device IDThis is used to identify particular browsers or devices when the access the service, and is used for security reasons.
LoginThis is necessary to sign in to the HubPages Service.
Google RecaptchaThis is used to prevent bots and spam. (Privacy Policy)
AkismetThis is used to detect comment spam. (Privacy Policy)
HubPages Google AnalyticsThis is used to provide data on traffic to our website, all personally identifyable data is anonymized. (Privacy Policy)
HubPages Traffic PixelThis is used to collect data on traffic to articles and other pages on our site. Unless you are signed in to a HubPages account, all personally identifiable information is anonymized.
Amazon Web ServicesThis is a cloud services platform that we used to host our service. (Privacy Policy)
CloudflareThis is a cloud CDN service that we use to efficiently deliver files required for our service to operate such as javascript, cascading style sheets, images, and videos. (Privacy Policy)
Google Hosted LibrariesJavascript software libraries such as jQuery are loaded at endpoints on the or domains, for performance and efficiency reasons. (Privacy Policy)
Google Custom SearchThis is feature allows you to search the site. (Privacy Policy)
Google MapsSome articles have Google Maps embedded in them. (Privacy Policy)
Google ChartsThis is used to display charts and graphs on articles and the author center. (Privacy Policy)
Google AdSense Host APIThis service allows you to sign up for or associate a Google AdSense account with HubPages, so that you can earn money from ads on your articles. No data is shared unless you engage with this feature. (Privacy Policy)
Google YouTubeSome articles have YouTube videos embedded in them. (Privacy Policy)
VimeoSome articles have Vimeo videos embedded in them. (Privacy Policy)
PaypalThis is used for a registered author who enrolls in the HubPages Earnings program and requests to be paid via PayPal. No data is shared with Paypal unless you engage with this feature. (Privacy Policy)
Facebook LoginYou can use this to streamline signing up for, or signing in to your Hubpages account. No data is shared with Facebook unless you engage with this feature. (Privacy Policy)
MavenThis supports the Maven widget and search functionality. (Privacy Policy)
Google AdSenseThis is an ad network. (Privacy Policy)
Google DoubleClickGoogle provides ad serving technology and runs an ad network. (Privacy Policy)
Index ExchangeThis is an ad network. (Privacy Policy)
SovrnThis is an ad network. (Privacy Policy)
Facebook AdsThis is an ad network. (Privacy Policy)
Amazon Unified Ad MarketplaceThis is an ad network. (Privacy Policy)
AppNexusThis is an ad network. (Privacy Policy)
OpenxThis is an ad network. (Privacy Policy)
Rubicon ProjectThis is an ad network. (Privacy Policy)
TripleLiftThis is an ad network. (Privacy Policy)
Say MediaWe partner with Say Media to deliver ad campaigns on our sites. (Privacy Policy)
Remarketing PixelsWe may use remarketing pixels from advertising networks such as Google AdWords, Bing Ads, and Facebook in order to advertise the HubPages Service to people that have visited our sites.
Conversion Tracking PixelsWe may use conversion tracking pixels from advertising networks such as Google AdWords, Bing Ads, and Facebook in order to identify when an advertisement has successfully resulted in the desired action, such as signing up for the HubPages Service or publishing an article on the HubPages Service.
Author Google AnalyticsThis is used to provide traffic data and reports to the authors of articles on the HubPages Service. (Privacy Policy)
ComscoreComScore is a media measurement and analytics company providing marketing data and analytics to enterprises, media and advertising agencies, and publishers. Non-consent will result in ComScore only processing obfuscated personal data. (Privacy Policy)
Amazon Tracking PixelSome articles display amazon products as part of the Amazon Affiliate program, this pixel provides traffic statistics for those products (Privacy Policy)
ClickscoThis is a data management platform studying reader behavior (Privacy Policy)