Tax time can be overwhelming for small business owners, especially with recent changes like the 2017 Tax Cuts and Jobs Act.

Our latest infographic highlights the challenges of preparing taxes and the impact of recent tax reform on small businesses.

Taxes continue to be a major challenge for small businesses

What is the most important challenge facing you as a small business owner in 2020?

  • 17% said attracting customers
  • 10% said taxes
  • 10% said technology
  • 8% said cash flow
  • 7% said competition
  • 7% said staffing

The majority spend over 20 hours preparing federal taxes

  • 26% take 1-10 hours to prepare
  • 22% take 11-20 hours
  • 18% take 21-40 hours
  • 34% take >40 hours

And they spend over $1,000 on the administration of federal taxes

  • 21% spend <$500
  • 15% spend $501-$1,000
  • 33% spend $1,001-$5,000
  • 16% spend $5,001-$10,000
  • 15% spend >$10,000

Tax compliance costs are 67% higher for small businesses than for big businesses.
 

Most small business owners have not felt an impact from the 2017 Tax Cuts and Jobs Act

What impact has the tax reform legislation had on your business?

  • 25% responded “positive”
  • 51% responded “same”
  • 20% responded “negative”
  • 4% responded “don't know”

But small business owners are growing more pessimistic about taxes.
 

Small business owners who expect tax policy changes to have a negative effect on their businesses in the next 12 months.

  • In Q1 2018, 23% said policy changes would affect their businesses negatively
  • In Q2 2018, 23% said negative effect
  • In Q3 2018, 25% said negative effect
  • In Q4 2018, 29% said negative effect
  • In Q1 2019, 29% said negative effect
  • In Q2 2019, 35% said negative effect

View more SCORE tax resources to help you prepare for April 15th. Connect with a SCORE mentor to help you as well.

Infographic designed by Easel.ly.

Infographic: Tax Reform’s Impact on Small Businesses

Infographic: Tax Reform’s Impact on Small Businesses