The #1 IRS Mistake Most Small Business Owners Make

Learn the #1 IRS mistake small business owners and self-employed professionals make —failing to file because they can’t pay — and discover how Watson on Taxes helps secure relief.

If you're self-employed—whether you're running a salon, coaching clients, driving for Uber, or making a living as an athlete or consultant—you already wear a dozen hats. You’re the boss, the bookkeeper, the marketing team, and sometimes even the janitor.

But the one hat most self-employed people don’t feel comfortable wearing?

Tax expert.

And that’s where the #1 IRS mistake happens: Not filing your taxes because you can’t pay them.

It’s an easy trap to fall into. You had a great year of income, but when it came time to file, you realized you couldn’t afford the full tax bill. So instead of filing, you put it off… again and again.

Unfortunately, the IRS doesn’t see it as buying time—they see it as avoiding your obligation. And that simple mistake can quickly snowball into penalties, interest, and aggressive collection actions.

Why It Happens

Most small business owners don’t get paid on W-2s. There’s no employer withholding taxes. It’s up to you to set money aside and pay quarterly. But if you’re reinvesting in your business, paying employees or simply trying to stay afloat, saving for taxes may feel impossible.

And once you fall behind, it feels safer to avoid the whole thing altogether.

But here’s the truth: Filing your taxes—even if you can’t pay—is one of the smartest moves you can make. It shows good faith. It stops certain penalties from compounding. And it opens the door to resolution programs you likely qualify for.

What You Can Do Instead

If you’re reading this and thinking, “That’s me,” take a deep breath. You’re not alone—and you’re not out of options. There are legitimate IRS programs designed for people just like you. Programs that can:

• Reduce your total debt

• Pause collections while you get organized

• Settle for less than you owe

• Help you regain control

But the first step is always the same: Filing.

You Don’t Have to Do It Alone

At Watson on Taxes, we’ve helped countless small business owners—creatives, athletes, stylists, consultants, and more—face the IRS with confidence. We don’t judge. We solve.

Because for every tax problem, there’s a solution.

Need help making that first move? Let’s talk! Contact Watson on Taxes for a free consultation.