05/ 30/ 2007
Due to the complexity of tax law, 88 percent of small-employer taxpayers used a tax professional to prepare their most recent federal tax return, according to an NFIB Research Foundation Small-Business Poll on tax complexity and the Internal Revenue Service. For those employers who employ 20 or more people, the percentage who used a tax professional increased to 95 percent.
"The risk of increased errors resulting from an overly complex tax code has forced small-business taxpayers to seek outside help in order to complete their taxes," says William J. Dennis, executive director of NFIB's Research Foundation. "The results of this survey show that the complexities in the tax code increase administrative costs and cause a great deal of frustration for small-business owners."
Key findings include:
Of the 15 major portions of the federal tax code evaluated, depreciation requirements are the provisions small-employer taxpayers most frequently rely on their tax professional to understand.
Ninety-five percent of the respondents think the depreciation provisions of the Internal Revenue Code apply to them, but just 15 percent think they have a good understanding of depreciation rules.
Eighty-two percent of small-employer taxpayers report that the alternative minimum tax now applies to them, while another 6 percent don't know.
NFIB.com
To view the complete poll (taken before 2006 returns were due), go to www.NFIB.com/research.
