Walked past my favorite East San Diego bar yesterday.
Empty.
Stools flipped.
“Closed Permanently” sign in the window.
Not because their cocktails weren’t amazing.
(Trust me, they were)
But because of what I call the “San Diego Small Business Tax Trap.”
After years of helping local businesses here (while the Navy’s kept us stationed in America’s Finest City), I’ve watched too many San Diego dreams die because of three lethal tax mistakes.
That bar owner?
Called me last week.
Too late. (way too late)
IRS had already emptied his accounts.
“But we were packed every weekend!” he told me.
(Packed doesn’t mean profitable)
Mistake #1: The Cash Flow Confusion
They’d look at their POS system nightly.
Bar tabs flowing = success, right?
Wrong.
They forgot about the silent partner taking 30%+ off the top.
(Hint: Uncle Sam doesn’t accept happy hour specials as payment)
Mistake #2: The Employee/Contractor Crisis
Treated all his bartenders as contractors.
“They set their own schedules!” he argued.
IRS disagreed.
$180,000 bill.
Goodbye craft cocktail dreams.
Mistake #3: The DIY Disaster
Did his own bookkeeping after midnight shifts.
“QuickBooks makes it easy!” he said.
Missed payroll deposits.
Three years later?
IRS bill bigger than his liquor inventory.
Here’s what kills me:
- All preventable.
- All fixable.
- IF caught early.
That’s why every time I see a new bar open in San Diego, I’m not just thinking about their drink menu…
I’m wondering if they know what’s coming.
Because in San Diego?
Perfect weather and ocean views aren’t enough to save your business from an IRS storm.
Running a San Diego small business?
Not sure about your tax situation?
Schedule a Call and let’s make sure your business doesn’t become another “Closed Permanently” story I walk past.
Still missing those sunset happy hours,
Andrew “The Thirsty (Former) Sailor” Samaniego, EA
P.S. The IRS is especially thirsty for San Diego businesses right now. Their automated systems are flagging more local businesses than ever.