Co-Mingling Personal and Business Funds
Using a business card for personal expenses (or paying business invoices from a personal checking account) muddies the audit trail and risks invalidating liability protection for LLCs and corporations.
Back to Resources
Bookkeeping · Aug 10, 2026 · 4 min read
5 Bookkeeping Mistakes That Cost Small Businesses at Tax Time
-
-
Misclassifying Workers (Contractor vs. Employee)
Filing a worker on a 1099 when they should legally be classified as a W-2 employee can trigger severe state and federal payroll tax penalties.
-
Leaving Expense Receipts Uncategorized
Dumping hundreds of transactions into "Uncategorized Expenses" at year-end delays your return filing and often causes valuable tax deductions — like home office or vehicle mileage — to be overlooked.
-
Forgetting Monthly Reconciliations
Matching your bookkeeping balance to bank and credit card statements every month catches double-charges, bank errors, and missing software subscription fees early.
-
Treating Owner's Draws as Business Expenses
Money taken out by an LLC owner or sole proprietor is a distribution, not a tax-deductible expense. Treating it as an expense distorts your Net Profit calculation.
If your books have fallen behind because of mistakes like these, our guide to what bookkeeping actually costs and our walkthrough of moving from QuickBooks Desktop to Online are good next reads.
Recognize any of these in your own books?
Book a free call and we'll help you clean it up before it costs you at tax time.