Small business tax attitudes and filing tips
Saturday, March 04, 2023
Most of the focus at tax time is on individual filers. That's understandable. The Internal Revenue Service gets more personal income tax returns each year than it does business filings.
Of the 261 million returns that IRS employees processed during fiscal year 2021, 167.9 million were from individuals. Business filings accounted for more than 12.2 million.
But more than 12 million is not a number to be dismissed.
That's why a couple of business tax pieces earn this weekend's Saturday Shout Outs.
Not fans of filing: First, there's a look at small business owners' attitude toward filing. Like most of us, they are not thrilled.
A recent survey by FreshBooks, a small-business accounting software company, found that 80 percent of U.S. small-business owners feel at least some stress at tax time. Nearly 63 percent of those surveyed owners rate their tax time stress at 3 or more on a scale of 5.
Since this is a shout out, I'll let you check out FreshBooks' survey at your leisure. But I did want to note some of the things that the business owners said they'd rather do than file their company's taxes: hanging out with their mother-in-law for a day, getting a mullet haircut, getting a root canal, removing a nest of angry bees, or licking a pole on the subway.
I'm sure hoping that the last yucky alternative to taxes was chosen by small business folks who just wanted to answer in the most outrageous way possible.
Time to tax plan, too: Next up is Grant Thornton's 2023 tax planning guide. The international accounting and advisory firm notes that the first step to forming a tax strategy should be understanding which issues will have the most impact.
Again, I'll let you take a look at the guide, but it examines such business issues as research and experimentation (R&E) costs, for which Congress last year failed to restore expensing; public stock buybacks; minimum book tax; state and local taxes (SALT) deduction workarounds; and the many extended, enhanced, and created energy credits in the Inflation Reduction Act.
Some tax changes and constants: Finally, check out NerdWallet reporter Rosalee Murphy's article Small-Business Tax Changes and Tips to Know in 2023.
But I do want to reiterate a couple of Murphy's pieces of advice that apply to every taxpayer, business or individual. What never changes from tax year to tax year is the need to keep accurate records and work with a tax professional you trust.
You also might find these items of interest:
- Tax implications of business entity choices
- Time to track your 2023 tax deductible business miles
- Tax tips from the IRS to celebrate Small Business Week
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