It can cost small businesses between $5,000 and $10,000 just to administer their tax returns each year. That’s the finding of a new survey, which calls for radical improvements to the tax code. WNPR’s Harriet Jones reports.
The National Small Business Association conducted a survey of its members on how much time and money it takes them to comply with the federal tax code.
“The tax code is incredibly complex”
Chair of the Association, Larry Nannis, is also a CPA. He says 87 percent of those businesses surveyed said they had to pay for outside help to have their tax return prepared, and a third were paying as much as ten thousand dollars in administrative costs. Those who do it themselves report it taking a week a year of business time to complete.
“Small business is the group that is most likely to be the best jobs creator. Anytime that you can put money toward growing your business, that’s a more productive use of the funds than an overhead or an administrative cost such as having to pay or having to spend the time to have your tax return prepared.”
Congress has been mulling a reform of the corporate tax code, but Nannis says this won’t help the vast majority of small businesses who pay tax as individuals.
“They’re talking about corporate tax reform and we think that they need to be talking about overall tax reform, because 80-plus percent of our members don’t file business taxes as a corporation.”
Meanwhile, payroll taxes are about to get even more complex. Starting in 2012, employers will have to report spending on healthcare on their employees’ W-2s.
For WNPR, I'm Harriet Jones.