Tax Season Stress? You’re Not Alone!
Tax season is almost over.
That sentence is sure to get two equally strong responses from small business owners. From one camp: A sigh of relief that taxes are already done. But from the other: A nervous flinch, some sweat on the brow, perhaps — signs of tax stress from those who haven’t yet filed.
If you’re in the latter camp, that’s OK. Not only are you not alone, but your worldview is quite similar to how the majority of small business owners feel about taxes in general.
It stresses most business owners.
That’s the primary takeaway of a recent FreshBooks survey of self-employed individuals and small business owners. Today, we’ll talk more about the survey results, as well as how to take some of the tax stress off your shoulders in this and future tax seasons.
FreshBooks Survey: Stress Is High During Tax Season
In February 2023, FreshBooks conducted an online survey of 500 U.S.-based self-employed people “to learn more about small business owners and their level of stress over taxes, their attitudes toward taxes and accounting, and what tools they’re using at tax time.”
Here’s what they found:
- 80% of American small business owners feel at least some stress at tax time.
- On a scale from 1 to 5, almost 63% of owners rate their tax stress at 3 or more.
- 60% of respondents said they’d rather do one or more of the following rather than taxes:
- Get a mullet haircut
- Get a root canal
- Remove a nest of angry bees
- Hang out with their mother-in-law for a day
- Lick a pole on the subway
- 43% of American small business owners say they’re worried about being audited by the IRS.
- Roughly a third of American small business owners rate “everyday accounting tasks” at or near the top of a list of things they avoid doing at work.
How to Ease Tax Stress
So, what can small business owners do to relieve the pain? Here are a few tips:
1. Consider using accounting software throughout the year so your information is more organized come tax time.
According to the FreshBooks survey, more than 70% of U.S.-based small-business owners say they’re not using modern accounting software to help manage their finances.
2. Don’t wait until the last minute.
43% of American small business owners deal with the stress of tax season by procrastinating. But the longer you wait, the worse your stress will get — and the less time you’ll have to pivot should you realize there’s something wrong while preparing your taxes.
3. Build a (tax) emergency fund.
Establishing a rainy-day fund is one of our recommendations for top financial habits for any small business owner. That’s because emergencies can hobble businesses of any size, but they can be downright fatal to smaller businesses. Thing is, while most people tend to think of emergencies like a tornado wrecking their office, an unexpectedly high tax burden could also rattle a company to their financial core. An emergency fund can help offset that kind of disaster.
4. Think about taxes all year.
OK, keeping 24/7 watch over your tax situation doesn’t exactly sound like it would put your mind at ease. But what this means is, rather than waiting until the end of each year to sniff out last-minute tax breaks, work on a full-year tax strategy designed to put you in prime position to reap tax credits and deductions.
5. Hire a professional.
One way to knock out several of these tips in one fell swoop is to hire a tax professional. Accounting pros can help you get organized, keep you on task and on time, and help you build a tax strategy so you don’t have to resort to an annual tax scramble.
You can get all of that and more with McManamon & Co., where our experts provide creative, innovative and proactive tax advice that keeps your company on Uncle Sam’s good side.
Forget the stress. Call McManamon at 440.892.8900 or contact us online today.
Tags: accounting, McManamon, McManamon & Co., small business, small business accounting, small business finances, small business taxes, taxes | Posted in McManamon & Co., small business, small business taxes, taxes