Over the last few years, an issue that has repeatedly come up for millions of small business owners was the difficulty they often had in dealing with their tax obligations. However, a greater effort has been made more recently on the part of federal lawmakers and the Internal Revenue Service itself to simplify the process and potentially save owners some money.
One problem that may have repeated itself over and over for many entrepreneurs relates back to paying for repairs and other costs, according to a report from the Detroit Free Press. The tax form in question, Form 3115, was nixed as a requirement earlier this month, and no longer has to be submitted. This may be good news in some ways because it saves owners and their accountants a lot of paperwork, but also could present problems because of how close to the deadline – just about two months – the rule change was made.
What this means for businesses is that it’s now easier to claim dollar figures for repair expenses and similar costs immediately, rather than having to spread them out over the course of a few years, the report said. Many experts claimed that this kind of requirement typically led to extra work for all owners, but may have been particularly problematic for companies with little to no staff.
“It was cumbersome,” George Smith IV, a certified public accountant and partner at George W. Smith in Southfield, Michigan, told the newspaper. “It has some heavy-duty concepts. Even if you tried to explain it to clients, their eyes would just glaze over. You’d try to explain this to someone and there was a big ‘You’ve got to be kidding me’ most of the time.”
Who can this help?
In particular, the IRS and those in the tax industry say that it’s generally small companies on the lower end of the spectrum in terms of revenues that will be helped by the change, the report said. Companies with assets worth less than $10 million in total, or gross annual receipts of the same amount, will generally benefit most.
Owners who want to make sure their companies are positioned for as much success as possible when it comes to keeping costs down might want to look into ways they can reduce expenses for things like small business insurance. Finding more affordable general liability insurance, for instance, could free up thousands annually.
