04/15/2014
* New survey underscores the annual burden that employers face in terms of time and expense
WASHINGTON — Carol Supplee thought she had everything in order. The owner of a small clothing and jewelry store in Alexandria, Va., Supplee set aside time every day last year to manage and organize her shop's financial records. So when tax season came around, she thought this year's filings would be relatively simple and straightforward.
"In the end, it still took me two full days to double-check it all, put the final touches on and send it off to my accountant," said Supplee, who has owned Imagine Artwear for two decades. "I kept finding things that weren't quite right. It's always tricky."
One of those tricky matters, for example, was the discrepancy between Supplee's internal sales numbers and those being reported by credit card processors to the Internal Revenue Service. Supplee has been trying to make sense of variations she has seen over the past couple of years. She says they seem to stem from differences in the way the processors report sales tax and in-store returns.
She said she is still working with the IRS to determine whether she will have to adjust the way she tracks and reports her sales going forward.
"We started getting letters from the IRS in 2011," she said. "We're still trying to get to the bottom of it."
As the annual deadline for filing tax returns arrives, more than half of small employers say the administrative burdens and paperwork associated with tax season pose greater harm to their businesses than the actual tax bill does, according to a new survey by the National Small Business Association.
Most small businesses are structured so that their owners pay the company's taxes as part of their income taxes. On average, small-business owners spend more than 40 hours — the equivalent of a full workweek — filing their federal taxes every year. One in four spends at least three full weeks on the annual chore.
Only 12 percent of the surveyed employers said they filed their taxes on their own this year, compared with 15 percent last year.
For those who weren't do-it-yourselfers, hiring help was pricey. Half said they spent more than $5,000 on accountants and administrative costs last year. One in four spent more than $10,000. "That money would be better spent hiring a new employee or growing the business," Tim Reynolds, vice chairman of the National Small Business Association, said during a congressional committee hearing last Wednesday. Reynolds owns a small software company in northern Ohio.
Specifically, it's the complexity of federal income taxes that makes the job of filing the most burdensome administrative task, according to the survey, which drew responses from 1,100 owners of businesses that have fewer than 500 employees.
The NSBA report comes as policymakers look for common ground on a plan to simplify the federal government's tax system. Recent departures by top tax writers in the House and Senate have slowed those efforts, but others are trying to take up the cause, floating several blueprints for reform.
The hearing held by the House Small Business Committee was meant to explore the recent proposals and how they would affect entrepreneurs and small employers.
Reynolds told the lawmakers that simplicity and consistency "should be the objective" of tax reform.
source
* New survey underscores the annual burden that employers face in terms of time and expense
WASHINGTON — Carol Supplee thought she had everything in order. The owner of a small clothing and jewelry store in Alexandria, Va., Supplee set aside time every day last year to manage and organize her shop's financial records. So when tax season came around, she thought this year's filings would be relatively simple and straightforward.
"In the end, it still took me two full days to double-check it all, put the final touches on and send it off to my accountant," said Supplee, who has owned Imagine Artwear for two decades. "I kept finding things that weren't quite right. It's always tricky."
One of those tricky matters, for example, was the discrepancy between Supplee's internal sales numbers and those being reported by credit card processors to the Internal Revenue Service. Supplee has been trying to make sense of variations she has seen over the past couple of years. She says they seem to stem from differences in the way the processors report sales tax and in-store returns.
She said she is still working with the IRS to determine whether she will have to adjust the way she tracks and reports her sales going forward.
"We started getting letters from the IRS in 2011," she said. "We're still trying to get to the bottom of it."
As the annual deadline for filing tax returns arrives, more than half of small employers say the administrative burdens and paperwork associated with tax season pose greater harm to their businesses than the actual tax bill does, according to a new survey by the National Small Business Association.
Most small businesses are structured so that their owners pay the company's taxes as part of their income taxes. On average, small-business owners spend more than 40 hours — the equivalent of a full workweek — filing their federal taxes every year. One in four spends at least three full weeks on the annual chore.
Only 12 percent of the surveyed employers said they filed their taxes on their own this year, compared with 15 percent last year.
For those who weren't do-it-yourselfers, hiring help was pricey. Half said they spent more than $5,000 on accountants and administrative costs last year. One in four spent more than $10,000. "That money would be better spent hiring a new employee or growing the business," Tim Reynolds, vice chairman of the National Small Business Association, said during a congressional committee hearing last Wednesday. Reynolds owns a small software company in northern Ohio.
Specifically, it's the complexity of federal income taxes that makes the job of filing the most burdensome administrative task, according to the survey, which drew responses from 1,100 owners of businesses that have fewer than 500 employees.
The NSBA report comes as policymakers look for common ground on a plan to simplify the federal government's tax system. Recent departures by top tax writers in the House and Senate have slowed those efforts, but others are trying to take up the cause, floating several blueprints for reform.
The hearing held by the House Small Business Committee was meant to explore the recent proposals and how they would affect entrepreneurs and small employers.
Reynolds told the lawmakers that simplicity and consistency "should be the objective" of tax reform.
source
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