Like any business, restaurants are required to pay taxes to many different government agencies. Failure to make these payments correctly and on time can result in high penalties and lost time. Some of the most common problems are:
1. Incorrectly Reporting Sales Taxes -
Sales taxes are applied to every taxable item that you sell. Incorrectly reporting non-sales taxable items, like tips, as sales can cost you in additional taxes. Failing to file returns in a timely manner can cost you in steep penalties.
2. Shoebox Accounting -
Restaurants have numerous financial transactions that need to be tracked and categorized each month. Some owners collect all these expenses in one place, commonly known as shoebox accounting, and then review all the transactions at one time. This can lead to mistakes or overlooked expenses that can cost you thousands of dollars in missed tax deductions or steep penalties from amended returns.
