Taxes are a painful subject for small businesses. It’s not just paying them that hurts — record-keeping, visiting accountants and preparing tax forms pose an administrative and financial burden for companies. And it’s a burden that’s growing.
The National Small Business Association, a group that represents small business owners, surveyed members and found that 64 percent of the survey’s participants spent more than 40 hours a year working on taxes last year, up from 57 percent in 2010. Working on taxes includes calculating them, filing reports and returns and meeting with an accountant.
Income taxes pose the biggest administrative burden for small businesses, followed by payroll taxes and sales tax.
The survey also found that 53 percent of participants spent more than $5,000 on accountants’ fees, legal fees and the internal costs of handling tax issues. A huge majority — 85 percent — had an accountant or other paid preparer handle their returns. Another 5 percent did the returns themselves using a PC and software, while 4 percent did it the old-fashioned way, sitting down with a calculator and paper forms. Another 3 percent gave the forms to a staffer to fill out.