There are a lot of amazing benefits to running your own business.

You get to chart your own path for success, feel the rewards of your hard work, and decide the shape of your life on your own. There’s a reason small business owners are consistently found to be some of the happiest people in the country.

However, that doesn’t mean the job is easy. There are plenty of challenges to running a small business and paying taxes properly is one of the major ones. You might feel you’re on top of this responsibility, but what if you’re overpaying tax amounts?

It’s easy to make this kind of mistake as a business owner. What signs should you look out for to ensure you’re not falling into this trap? Read on and we’ll walk you through the basics of how to stop paying so much in taxes.

1. You’re Not Deducting Personal Expenses

All business costs are tax-deductible, and included in those are charges and purchases that may have been made on your personal accounts. If you’re not deducting personal charges related to your business, you are leaving a huge amount of money on the table that should be yours.

This is the main advantage that business owners have over other tax payers: they have opportunities to make massive deductions when it comes to their tax burden.

Failing to take advantage of this opportunity could be considered a big mistake and could result in some serious tax bills.

2. Employee Work Status Mistakes

How else might your business be paying too much taxes? An area where things can get quickly complicated is in the arena of employee hiring.

If you make a mistaken when calculating the IRS payroll deductions you can take, the mistake can be a quite costly one. You’ll need a firm grasp on all the employees you have on your payroll, their various work statuses, and the amount you’ve paid them over the course of the year.

If you make a mistake or misfile in reporting this, you might end up paying far more than you really need to. Or, if you underreport, you’ll end up paying more when it comes to the various penalties and fines you’ll have to take on.

3. Lower Your Tax Rate

Another way to better manages taxes for business? Change the tax you’re planning on paying from income tax to capital gains tax.

Ordinary income can be taxed at a generally high rate, but it might end up lower if it can be¬†transferred to capital gains. The capital gains tax rate is on more of a sliding scale, meaning there are different possibilities when it comes how much you’ll have to pay.

A tax professional, like those at WealthAbility, can help you determine if this is the right move for you.

Is Your Business Overpaying Tax?

If you’re running a business, managing your bottom line is an all-important task. If you’re overpaying tax payments, you’re going to be digging into that bottom line to a real degree. The above signs can help you determine what to look out for and avoid this issue.

Need more financial advice? Keep scrolling our blog for more.