5 Tax Mistakes Small Business Owners Make Every Year

I have worked with hundreds of small business owners over the past 25 years. Smart, hardworking people who run great companies. But when it comes to taxes, the same mistakes keep showing up. The good news is they are all fixable.

Here are the five I see the most.

1. Mixing Personal and Business Expenses

This is the number one issue. When you run personal expenses through your business account, it creates a mess at tax time and raises red flags with the IRS. Open a separate business checking account and a business credit card. Use them only for business. It takes 30 minutes to set up and saves hours of headaches later.

2. Missing Estimated Tax Payments

If you are self-employed or own a pass-through entity, the IRS expects you to pay taxes throughout the year, not just at filing time. Missing quarterly estimated payments means penalties and interest on top of what you already owe. We help clients set up a schedule so they are never surprised.

3. Not Tracking Mileage

Business mileage is one of the most overlooked deductions. The IRS rate for 2026 is 70 cents per mile. If you drive 15,000 business miles in a year, that is a $10,500 deduction. But you need records. Use an app or keep a simple log. Without documentation, you cannot claim it.

4. Ignoring Retirement Contributions

A SEP-IRA lets you contribute up to 25% of net self-employment income, up to $70,000 for 2025. A Solo 401(k) can go even higher. These reduce your taxable income dollar for dollar. Many business owners tell me they will "get to it later." Later turns into never, and they miss years of tax savings.

5. Waiting Until April to Think About Taxes

By the time you file your return, it is too late to change anything. Tax planning happens during the year, not after it ends. Even one meeting in October or November can uncover strategies that save thousands. We offer year-round planning for exactly this reason.

None of these mistakes are complicated. They just require a little attention and the right guidance. If any of these sound familiar, give us a call. A quick conversation can point you in the right direction.