Why Small Business Owners Owe the IRS—and How to Avoid ItIn this episode of How to Lower Your Tax Bill, host Terrance Hutchins is joined by co-host T’Mia Kelly to explore the top five tax mistakes small business owners make—and how to avoid them. If tax season caught you off guard this year, this episode is packed with real-world insights and practical strategies to help you stay ahead of the IRS, avoid penalties, and better plan your business finances.Whether you're new to entrepreneurship or a seasoned business owner, understanding these pitfalls can save you thousands.Key Topics Covered:Why underpaying estimated taxes can trigger costly IRS penaltiesThe “Safe Harbor” and “Pay-As-You-Go” methods for managing estimated paymentsWhy paying in cash doesn't exempt you from reporting incomeThe dangers of commingling business and personal expensesThe true cost of buying things "just to save on taxes"Why taking advice from TikTok or social media can get you in trouble with the IRSFeatured Tax Case: In Trinidad v. United States (1977), the court denied a nightclub owner’s attempt to deduct the living expenses of his live-in girlfriend, even though he claimed her presence helped him stay “relaxed and happy” for work. The IRS ruled that personal relationships—even morale-boosting ones—aren’t legitimate business deductions.Pro Tip: Avoid tax trouble by setting up proper systems early on—like separating your business and personal finances, issuing 1099s to contractors, and seeking professional advice before making big purchases or financial moves.For more strategies to reduce your tax bill, subscribe to How to Lower Your Tax Bill on Spotify, Apple Podcasts, or your favorite platform.And remember: Keep More of What You Earn.

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