Preparing and filing taxes is dreaded by most, and small business owners may be concerned about the bank capital they’ll lose if they end up owing the government. But tax season also makes small business owners pay in another currency instead of dollars: their time.
The National Small Business Association recently conducted a survey in which owners reported having to spend an average of 40 hours, which is about the length of a typical work week, preparing and filing their taxes. Twenty five percent said they spend at least three weeks a year on taxes.
Therefore, more than half of small employers – 53 percent – said the time and paperwork required during the tax season pose the most harm to their businesses. The remaining 47 percent said the actual tax bills are the greatest threat.
Small business funds are key to keeping a majority of the country’s companies afloat, and time is money, so many people in various industries and positions of power are trying to make the process simpler for owners.
Government considering action
An action Congress is considering is to retroactively renew some tax provisions that recently expired, which would help many regain working capital from money put into business investments and research and development.
“The ever growing patchwork of credits, deductions, tax hikes and sunset dates is a roller coaster ride without the slightest indication of what’s around the corner,” said Tim Reynolds, vice chair of the NSBA, in a Congressional hearing about how to help small business owners during tax season.
Congress held a hearing on April 9 in which many testified, including The House Small Business Committee, which is analyzing various proposals to make the process easier.
“While most Americans may think about taxes once a year, entrepreneurs cope with multiple tax issues each day in operating their businesses,” Committee Chairman Sam Graves, R-MO., said during the hearing. He continued to say that some owners aren’t confident in their financial prowess, leaving them “little ability to plan with confidence, and less time to grow their companies.”
Until any final moves are made, small business owners have to deal with the status quo, especially during this year’s tax season as the filing deadline fast approaches. Small business owners who are seeking more financial security should consider small business loans from National Funding to improve or expand their operations.