Top Five Business Tax Mistakes Small Business Owners Make In North Carolina

North Carolina has a business-friendly tax environment — but mistakes still happen. Here are the most common tax errors and what NC business owners can do to fix them.

1. Poor Recordkeeping

NC business owners often struggle with inconsistent bookkeeping, missing receipts, and disorganized financials.

How to avoid it:

• Use bookkeeping software

• Keep receipts digitally

• Reconcile accounts monthly

2. Worker Misclassification

Service-based businesses in NC (contractors, trades, wellness, etc.) frequently misclassify workers.

Misclassifying employees as contractors can lead to:

• Back taxes

• Penalties

• Required reclassification

• Higher audit risk

3. Not Collecting or Remitting Sales/Use Tax

Many businesses must collect sales tax or report tax on out-of-state purchases.

How to avoid it:

Register with the North Carolina Department of Revenue and remit taxes on schedule.

4. Missing Quarterly Estimated Tax Payments

If you owe more than $1,000, quarterly estimates are required.

5. Neglecting Annual Reports

North Carolina requires annual filings for LLCs and corporations. Missing these deadlines can lead to dissolution.

North Carolina business owners can avoid costly mistakes with proper recordkeeping and proactive planning. A CPA can help simplify compliance and ensure nothing slips through the cracks. If your individual financial situation needs particular care or attention, then contact us directly and as soon as possible by sending us a message here.