Taxes are time consuming and expensive for small businesses in the United States.
Nearly a quarter of small business owners in the United States spend over 120 hours each year dealing with their federal taxes, according to the most recent survey by the National Small Business Association. That’s three work weeks spent dealing with federal taxes. Additionally, over half of small business owners spend more than one work week (40 hours) on federal taxes each year, according to the most recent survey by the National Small Business Association.
According to the survey, these taxes come with a heavy cost as well, with over a quarter of businesses spending more than $10,000 each year on simply the administration of federal taxes. This does not include the actual taxA tax is a mandatory payment or charge collected by local, state, and national governments from individuals or businesses to cover the costs of general government services, goods, and activities. burden, which 42 percent of respondents said creates the largest burden on their business.
Small business owners ranked payroll taxes and presenting the largest financial burden, followed by state and local tax compliance, income taxes, property taxes, and capital gains taxes. Nearly 70 percent of small business owners said that federal taxes have a moderate to significant impact on the day to day operations of their businesses.
The survey found that 70 percent of small business owners support tax reform that reduces corporate and individual tax rates and business and individual deductions.
Pass-through businesses make up the vast majority of businesses in the U.S. today (chart below). This makes it crucial that tax reform fix both the individual and the corporate tax system.
This post originally appeared on Forbes.com.
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