Now that the annual tax filing deadline has passed for another year, many small business owners may feel a significant sense of relief that they no longer have to deal with such issues. However, for many it seems that their problems might be only just starting, and others might find themselves scrambling to make up lost ground.
For example, a recent survey suggests that some 46 percent of small businesses didn’t use any kind of tax professional in preparing their annual filings, and that may significantly increase their chances of being audited by the Internal Revenue Service, according to a report from Bloomberg Businessweek. In fact, nearly 107,000 nonfarm small businesses with less than $25,000 in gross receipts which did not claim the standard Earned Income Tax Credit ended up being audited in 2013 alone, and when those examinations of their finances ended, those companies owed an average of $5,500 to the federal government. Altogether, the IRS levied penalties totaling $4.5 billion to all companies with respect to their payroll taxes.
In March alone, the IRS’s website got 26 million unique visitors, making it the most trafficked government website, the report said. That may indicate a mad scramble to get caught up on what’s required of them by everyday consumers and small business owners alike.
What can small business owners do?
Consequently, it’s important for small business owners across the country to do as much as they possibly can to make sure they’re ready for the annual filing season not only in the immediate run-up to tax time, but throughout the year. Doing so may help to prepare them for any potential hurdles into which they may end up running, and give them ample time to figure out exactly what they’re going to need to do to get over them without having to worry about a potential audit from the IRS.
Of course, this isn’t always as affordable as many entrepreneurs may like, and as such they may want to do more to make sure they can squeeze such services into their annual budgets. This might include trying to reduce other expenses, such as those for small business insurance policies like liability insurance, which could end up saving companies thousands of dollars annually. That, in turn, may not only cut costs, but may free up funds to be devoted to other aspects of the business which may need it.