A number of small business owners came away from tax season asking a curious question:
Why did I pay more taxes when I made less revenue?
According to the April 2015 SurePayroll Small Business Scorecard®, 56 percent of small business owners paid more in taxes this year than the year before. However, only 45 percent said they saw revenues increase.
The takeaway seemed to be that they have less of a problem paying the required taxes than they do figuring out how they’re supposed to budget and plan for tax season, given the complications of the tax code.
One small business commented: “I do not believe I should pay an unemployment tax, especially when I only have a single employee.”
Are small businesses taxed too much? It’s an interesting question. Are the truly small businesses – those with just a handful of employees – paying too much in taxes?
A little more than half seem to indicate as much, saying they do not get taxed fairly.
Others, meanwhile, commented that what they’re paying is relatively low:
“My effective rate of tax is okay relative to the amount of deductions I’m allowed as a sole proprietor.”
Everyone has a slightly different story – and it varies greatly based on what state the business is located in.
But despite the questions over taxes, optimism among small business owners spike considerably, easily reaching its highest level of the year.
Learn more about how small business owners feel about tax season in this infographic.