New Survey on Taxes and Small Business: Complexity is Major Problem
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WASHINGTON, Feb. 26, 2025 ~ The National Small Business Association (NSBA) has released its 2025 Small Business Taxation Survey, revealing the significant impact federal taxes have on America's smallest businesses. According to the survey, the expiration of the 2017 Tax Cuts and Jobs Act tax cuts will be a major concern for the majority of small businesses.

NSBA President and CEO Todd McCracken stated, "Given that 83 percent of small-business owners pay business taxes at the personal income level as pass-through entities, it's no surprise that they are very concerned about potential tax hikes if Congress fails to address the expiring tax cuts."

The survey also found that despite the majority of small-business owners hiring external tax practitioners to handle their taxes, they still spend more than 20 hours per year dealing with federal taxes. Additionally, 90 percent of small-business owners reported that federal taxes have some impact on their day-to-day operations, with one-third citing a significant impact.

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When it comes to outsourcing goods from outside the U.S., the survey found that China is the top country for small businesses to purchase from. More than half of small-business owners also reported difficulty in finding needed information directly from the IRS.

However, according to NSBA Board Chair Michael Canty of Alloy Precision Technologies in Cleveland, Ohio, it is not just financial costs that burden small businesses when it comes to federal taxes. The largest burden facing them is administration and complexity.

For years, NSBA has been warning policymakers about the challenges posed by sunsetting laws and how they disproportionately affect small businesses. With Congress now facing decisions on various expiring tax cuts including the 199A Qualified Business Income Deduction – top priorities as voted on at NSBA's recent Small Business Congress – this fear is becoming a reality.

Canty emphasized the importance of providing small businesses with tax stability, predictability, and permanency in any discussions on tax extenders or reform. He also stressed the need for parity with larger businesses.

The full survey can be downloaded from NSBA's website. With over 85 years of operation, NSBA is a nonpartisan organization advocating for America's entrepreneurs. Its 65,000 members represent every state and industry in the U.S. For more information, visit www.nsba.biz or follow @NSBAAdvocate on social media.
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