An August 2009 survey from the National Federation of Independent Business (NFIB) shows that after sales, taxes are now the biggest concern of small business owners. If you’re a business owner, you know that taxes eat into your bottom line in two important ways:
- Tax payments you’re required to make reduce the profits you keep.
- Compliance requirements (recordkeeping, depositing taxes, filing returns) sap your precious time.
Many owners, however, don’t like to talk about taxes — it’s something best left to their bookkeepers, accountants or other money advisors. This attitude, however, can add to the amount of taxes you’ll pay. Ignoring (or simply being ignorant of) the impact that taxes can have on all business decisions can be very costly. Before making ordinary business decisions — to hire an employee or use an independent contractor, buy or lease equipment or a car, which type of health or retirement plan to use — be sure to understand the tax implications.
Go ahead and say it: Taxes (it’s not a dirty word).
Barbara Weltman is a nationally recognized small business expert on taxes, finances, legal and other issues, publisher of Big Ideas for Small Business and Idea of the Day, and host of Build Your Business Radio.
