When it comes to the new $1.5 trillion tax overhaul package, a startling number of small businesses are still trying to navigate how to deal with it.
A new survey by the National Association for the Self-Employed (NASE) revealed that 83% of small business owners didn’t have a complete understanding how the Tax Cuts and Jobs Act will affect them.
More than 90% of the 389 respondents felt the government did not adequately prepare them for the new tax system. Respondents were split on whether they expected to pay more or less in overall taxes in 2018.
About 60% of those surveyed felt their taxes for this year would be more difficult to complete because of the new tax law. Ninety percent of small business owners contend that the government should take additional measures to ease the tax burden.
Some 30.33% of respondents said they spent up to $499 on outside professional help to prepare for the law, while 9.51% reported they spent $500 to $1,000 on outside assistance, and 5.14% spent $1,000 or more. Some 55% said they did not spend anything on outside help.
“The tax reform package signed into law last year is based on Americans reinvesting savings back into their business operations and helping to spur overall economic growth,” NASE president and CEO Keith Hall in a statement last month.
“Small business owners must first have a full understanding of how this new tax law will impact their bottom line. Unfortunately, over 83% of respondents still don’t understand the impact the new law will have on their businesses and over 90% think the government didn’t adequately prepare them for the system.”
Hall added, “The small business community is rapidly trying to educate themselves on how to make the new tax policies translate into savings and growth. However, additional IRS guidance is necessary and the government can take additional steps to effectively communicate the impact of these new laws on millions of small business owners in every city and state throughout the country.”
The new tax reform provisions are effective beginning this year through 2025. Experts say small business owners should now be planning for the 2018 tax year and setting up their operations to minimize their tax liability.