As a small business owner, it's essential to understand the basics of taxes and business structures to avoid costly mistakes. The biggest mistake is paying yourself wrong, which can lead to limited liability issues if not properly set up. Business owners must choose between an LLC or sole proprietorship based on their specific situation and goals. A qualified tax preparer is crucial, as many unqualified professionals make outrageous promises and are not liable for errors on the tax return. Failing to pay payroll taxes or claiming invalid deductions can result in additional taxes and penalties. Keeping accurate records and understanding what deductions are allowed is vital to minimize tax liabilities. Business owners should consult with experts to ensure they're taking advantage of available tax benefits and avoiding costly mistakes.