Small business owners are more likely than consumers to use a tax professional, according to a new survey, with 74 percent of small business owners planning to get help, while only 58 percent of consumers said they would.
The survey of 1,000 small business owners by Discover Financial Services and Rasmussen Reports found that 51 percent of small business owners say that tax professionals are worth the fees they charge, compared to 41 percent of consumers who agree.
Word of mouth is a determining factor when hiring an accountant: 54 percent of small business owners seek "someone they know and trust," and 26 percent more seek a "referral from friends or relatives." The percentages are similar among consumers, with 49 percent depending on someone they know and 25 percent taking a referral from family and friends.
Forty-one percent of small business owners say it is somewhat or very difficult to find and organize the documents they need to file their taxes. Twenty-nine percent indicated that the tax preparation process is very time-consuming and another 46 percent find the process somewhat time-consuming. Seventy-one percent of small business owners say that the complexity of the Tax Code is a distraction from their focus on the needs of their businesses.
The economic confidence of small business owners sharply dropped in March, with more than half of them rating the economy poor and getting worse, according to the same survey. The Discover Small Business Watch dropped to its lowest point in March 2008 since its inception in August 2006, after registering a slight increase in February. The monthly index was 77.8 in March, a 13.1-point decrease from February, and nearly 40 points lower than a year earlier.
Seventy-seven percent of small business owners feel that economic conditions in the U.S. are becoming worse, an increase from 67 percent in February. Meanwhile, 53 percent rate the U.S. economy as poor, compared to 36 percent who said the same in February. Only 16 percent rate the U.S. economy as excellent or good.
Some 48 percent of small business owners say they see economic conditions for their businesses getting worse over the next six months, up from 34 percent in February, and the lowest level of confidence in 20 months. Forty-seven percent have experienced cash flow issues over the last 90 days, a slight increase from 43 percent in February and the highest since the launch of the index.
