Tag Archive for 'estate tax'

Navigating the uncertainty of small business taxes for 2011

Several months ago, I wrote an article that was titled, “The enemy of jobs creation is uncertainty.” In the article I identified several issues that were causing small business owners to be reluctant to invest or hire.  One of those things was - and still is - not knowing what the income tax burden will be in the future.  Today, there are several tax issues unresolved that will impact virtually every small business.

1.  The personal tax rate, the corporate tax rate and the capital gains tax rate: We still don’t know what Congress will do with the tax cuts from 2001-03, often called the “Bush tax cuts,” which are set to expire at the end of 2010.  Not knowing the tax implications creates frustration when trying to project profit margins or do retirement planning.  And if we have any assets that we might want to sell in the short-term, we feel pressure to sell them this year, since the cap gains rate may go up next year.

2.  The health care bill:  No one really knows how this new program will impact small businesses, both organizationally, financially or from a compliance standpoint.  Speaking of compliance, one of the big concerns involves the proposed 1099 reporting requirements that is an element of the health care bill. Every small business advocacy organization I’ve talked with in the past few months has said this new compliance requirement will be a nightmare for small businesses.

Recently, we polled visitors to my website about what the government should do with the expiring tax cuts. Over 80% of our respondents said the tax cuts should be extended.  If the government wants to get the economy going quicker, they will do everything they can to help small businesses understand what their future tax compliance requirements are as soon as possible.

Recently, on my radio program, The Small Business Advocate Show., I talked with small business tax expert, Barbara Weltman, about why current tax policies are creating a great deal of uncertainty among small businesses, including the new 1099 reporting provision. Barbara Weltman, is a tax attorney and author of many books on small business tax planning, including the J.K. Lasser series. I hope you will take a few minutes to listen to what Barbara has to say, and be sure to leave your comments. Listen Live! Download, Too!

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