I am in business for myself. My number one goal, besides making a profit, is not having employees. I wonder how many other small business owners feel the same way? It’s no surprise that the unemployment rate hangs above 10%. The government is smothering small business. Too bad Obama only hires Ivy League academics with big business buddies for advisers.
I used to have employees. My business was providing marketing research, sales consulting, and sales services to small technology companies. All my employees worked from home and were located in several states. The work was all on computers and phones. It seemed so simple.
Enter the IRS. They have rules. You can buy the 20 volume “US Code of Federal Regulations” written by the IRS from the Government Printing Office for $974. This does not include around 100 volumes of the court tax cases nor individual state tax laws. If a business has employees they are required to know the latest tax rules and pay federal taxes, state taxes, social security taxes, and employment security taxes for each employee. If you happen to make a mistake you could face interest, fines, and imprisonment.
I had one employee in Oklahoma who I had to let go due to tax issues. Oklahoma could not agree on how to classify my business, so they were going to charge a tax on my services. It is really important to know which box to check on these government applications!
Deductions are another wild ride on the IRS train. I guess it is made complicated by all the big shots paying for legislators to give them loopholes. I spend a lot of time looking for loopholes. For example, take the vehicle deduction. Everyone I know uses the per mile formula for getting their deduction. It is certainly easy. Did you know there is another way to deduct your car? It is called the Actual Method. You deduct all expenses of the vehicle including depreciation. It is complicated to do, but you will have a much larger deduction. IRS = time and money. Good for lawyers and accountants, bad for small business.
Enter the Obama administration. They were elected on the promises of higher taxes, nationalized healthcare, and Cap and Trade. All the stimulus money given to Wall Street and state governments are just late additions to the power game. All of this spells death to the small business. Thank goodness we are still a capitalist economy with the hope of large profits to cover massive government intrusions.
Now that the banks have been saved, everyone wonders why people are not lining up to borrow money. I can answer that – small business owners are scared to death! Why would they take a risk and borrow money knowing they will have to adjust their business to every whim of this gigantic government?
If I need help now, I pay independent contractors. A 1099 form for each contractor at the end of the year and it’s done. It’s not the best way to do business, but it’s safe. Nationwide, this is not good for the economy.
Small business is not looking for a government handout or bailout. We just need the government to get out. If the government really wants people working and the economy to grow, look to small business. Reduce the tax burden, relax the rules on employment, and stop protecting big business.
Tags: cap and trade, Economy, employment, Healthcare, IRS, small business
This is by far the biggest concern for all of the small business owners I know…I know people that spend alot of time trying to find a new angle in order to lessen the tax burden of new help. Do you want to know why that new kitchen can cost $50,000.00??? or more depending? You can take one third of the labor in that price and just give it to good ole Uncle Sam….and what benefit do I get…not a whole heck of alot! I sure could pay my employee more if taxes didn’t always get in the way…It really is a shame….