According to a recent article by Bloomberg, small-business owners spend on average more than 40 hours — the equivalent of a full workweek — filing their federal taxes every year. One in four spends at least three full weeks on the annual chore.
There is also the expense of doing that work. Only 12 percent of employers filed their taxes on their own this year, down from 15 percent last year — and hiring help can be pricey. Half spent more than $5,000 on accountants and administrative costs last year. One in four spent more than $10,000..
Specifically, it’s the complexity of federal income taxes (most small businesses are structured so that their owners pay the company’s taxes as part of their income taxes) that employers say makes the job the most burdensome administrative task. Payroll taxes actually deal firms their largest financial blow, according to the survey, which drew responses from 1,100 business owners with fewer than 500 employees.
The report comes as policymakers are looking for common ground on a plan to simplify the federal government’s unruly tax system. And while recent departures by top tax writers in the House and Senate have slowed those efforts, others are trying to take up the torch, with several blueprints for comprehensive tax reform floated in the past couple months.
In the short term, Congress is considering renewing retroactively a number of recently expired tax provisions, including research and development credits and business investment expensing rules on which many small businesses depend. Reynolds urged lawmakers to vote in favor of those renewals, but going forward, he implored them to stop letting them expire from year-to-year in the first place.
Source: Bloomberg
