7 Biggest Misconceptions Business Owners Have About Their Returns

One of the biggest hurdles you'll face in running your own business is staying on top of your numerous obligations to federal, state, and local tax agencies. A tax headache is only one mistake away, be it a missed payment or filing deadline, an improperly claimed deduction, or incomplete records.

Unfortunately, the complexity of tax law generates a lot of folklore and misinformation that also leads to costly mistakes. Here is a look at some of the more common small business tax misconceptions.

1. All Start-Up Costs Are Immediately Deductible

2. Overpaying The IRS Makes You "Audit Proof"

3. Being incorporated enables you to take more deductions

4. The home office deduction is a red flag for an audit.

5. If you don't take the home office deduction, business expenses are not deductible.

6. Requesting an extension on your taxes is an extension to pay taxes.

7. Part-time business owners cannot set up self-employed pensions.

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