One out of three small businesses reported spending more than 80 hours per year and more than one-quarter spend over $10,000 annually on complying with their federal tax obligations, according to a new survey by the National Small Business Association.
The NSBA’s 2015 Small Business Taxation Survey asked small business owners about their experiences with the administrative burdens imposed by the U.S. tax code. An 85 percent majority of small businesses indicated they need to pay an outside tax practitioner or accountant to handle their taxes. Beyond the time and money it takes to be compliant, the majority of small-business owners said that federal taxes hold significant influence over the decisions they make about their firms.
The survey found that small businesses overwhelmingly support reducing both corporate and individual tax rates coupled with reducing deductions. This was the only broad tax reform proposal that received the majority of small businesses' support. Corporate-only tax reform is a nonstarter for small firms, the majority of which are pass-through entities and therefore pay their business taxes at the individual income level.
“It is no surprise, given Congress' inability to effectively address tax legislation last year, that there was an increase in the administrative burden associated with federal taxes," stated NSBA president and CEO Todd McCracken in a statement. “The tax code is irretrievably broken and now is the time for lawmakers to act.”
The 2015 Small Business Taxation Survey was conducted online March 13-24 among more than 675 small-business owners. To download the complete report, click here.
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