Taxes remain a chore for small businesses, survey says

Dealing with federal income taxes is still a chore for small business owners even when they have an accountant or tax professional handling their returns. That’s the finding of a survey released last week by the advocacy group National Small Business Association.

The survey, which questioned 953 owners, found that a wide majority, 68 percent, give their returns to a tax pro to prepare. But 57 percent still said federal taxes have a moderate or significant impact on the day-to-day operation of their businesses. One-third said they spend more than 40 hours a year on federal taxes.

The administrative burden posed by taxes is expected to increase this year following the enactment of the new tax law. Sixty-seven percent expect paperwork and other tax-related chores to be their biggest tax burden this year, up from 60 percent in 2017.

Only 7 percent predicted that filing their taxes would be easier as a result of the law.

Thirty-six percent of owners have a relatively small financial burden from their federal taxes, not including the tax itself, paying up to $1,000 for tax preparation. Another third spend between $1,000 and $5,000, and nearly a third spend more than $5,000.