April 15, 2014
By Bob Coleman
Editor, Main Street Wednesday
The National Small Business Association’ 2015 survey on taxes found that, while the financial tax liability for small firms is a huge issue, the sheer complexity of the tax code is actually a more significant problem for America’s small businesses.
In fact, 59 percent of small-business owners picked administrative burdens as the biggest challenge concerning federal taxes, compared to 42% who chose the actual financial burden.
The weight of administrative burdens impose on small firms is staggering:
One-in-three small-business owners spend more than 80 hours per year on federal taxes.
One-in-four small firms spend more than $10,000 per year on the administration alone of federal taxes.
34% say federal taxes have a significant impact on the day-to-day operation of their business.
32% claim tax credits and tax deductions significantly influence financial decision of the business.
Payroll taxes were ranked as the number one most burdensome tax both financially and administratively among small firms. The complexity of payroll taxes is a likely driver of the fact that the majority of firms with more than five employees use an external payroll company.
Sales taxes also are a major source of frustration and confusion. While nearly half of the small businesses report they don’t collect sales taxes, 24 percent report spending three hours or more per month on the administration of sales taxes. The majority of small firms say navigating state sales tax rules and keeping abreast of changes is a significant concern.
Access the NSBA survey here