Small business owners feeling anxious or stressed out this time of year are certainly not alone. Eighty percent say they feel at least some stress at tax time, according to a recent survey by FreshBooks. Almost 63% of small business owners rate their tax time stress at 3 or more on a scale of 5.
Overall, taxes can be a real buzzkill for small business owners, with many saying they would rather do a number of unpleasant things than deal with them. Sixty percent chose one or more of the following over doing 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.
What is driving the anxiety and stress? A lot of it comes down to a lack of organization and preparation. The FreshBooks survey found that 43% of small business owners procrastinate when it comes to tax preparation, with the majority saying they do not have enough time, and/or they do not understand what they can do to be better prepared to file. Some of the stress comes from unease around tax assessments, with 43% of owners saying they are worried about being audited.
“If you’d rather handle angry bees or risk getting sick by licking a subway pole than do your taxes, it’s time to look for solutions,” said Michael Ly, founder and CEO of Reconciled, who is a FreshBooks partner and a member of FreshPAC (FreshBooks Partner Advisory Council). “Yes, taxes are a pain, but that pain can definitely be soothed by using the right tools and resources.”
FreshBooks also discovered there are a lot of things small business owners would rather do than stay on top of daily accounting. One-third rate “everyday accounting tasks” at or near the top of a list of things they avoid doing at work, which includes cold calling, scolding an employee, or dealing with a terrible customer.
Even though many stressed-out small business owners do not fully understand how to get ready for tax time, only 32% said they plan to work with a tax professional this year. Additionally, more than 70% said they are not using modern accounting software to help manage their businesses finances.
“There’s really no need to be pulling your hair out over tax time,” says Derek Daisy, a voice actor/singer-songwriter and FreshBooks customer in Charleston, SC. “Using accounting software makes doing taxes a breeze, especially because of the expense reports and profit and loss statements you can access at the end of the year.”
Thanks for reading CPA Practice Advisor!
Subscribe Already registered? Log In
Need more information? Read the FAQs
Tags: Small Business, Taxes
