According to Benjamin Franklin, “nothing is certain in life except death and taxes.” While the statement is certainly true for individuals, it can also apply to businesses. As such, it is important for business owners to understand what taxes they are paying and what they can do to minimize their tax liability.

A common mistake that small businesses make is not keeping up with their recordkeeping and bookkeeping. Whether through using an accounting or bookkeeping software or through working with a tax professional, it is essential for entrepreneurs to maintain a solid financial reporting process. It is this that will allow them to maximize deductions and keep their liabilities in check.

Another common mistake is not properly classifying employees versus independent contractors. This is a critical question because it can have significant legal and tax consequences. An accountant can help determine which classification is best for your particular situation.

It is also important to understand what expenses are and aren’t tax-deductible. Many small businesses don’t realize that certain expenses such as political contributions, commuting costs and entertainment expenses are not tax-deductible. However, by working with an accountant, you can be sure to have a clear understanding of what expenses qualify for deductions.

A last important factor to consider is whether it is more cost effective to buy or lease equipment, property and vehicles. Owning often allows for depreciation deductions, whereas leasing may not. An accountant can help you sift through the pros and cons of each and help you decide what option is most beneficial to your business.