In the last several years, many lawmakers at both the state and federal levels have made more concerted efforts to help small business owners across the country to keep their bottom lines as healthy as possible. However, it seems that in at least one state, many such entrepreneurs simply aren’t taking advantage of the financial help being given to them.
The state of Ohio recently gave small business owners the ability to write off as much as 50 percent of their income tax levies – up to $250,000 – for the 2013 tax year, but some 379,000 eligible owners failed to take advantage of the deal, according to a report from the Columbus Dispatch based on tax records statewide. Consequently, the state received $287 million in tax money that entrepreneurs were not actually required to pay. Originally, the plan was supposed to help some 717,000 people save a total of $533 million. The average per-owner savings could have been about $760 in an ideal scenario.
Why did this happen?
Experts generally agree that the state simply seems to have not done a good enough job getting the word out to owners about this tax break, the report said. The likelihood that so many people would willingly pay that much more in taxes when they didn’t have to is quite small, and highlights just how important outreach is between government and small business owners.
“It’s really too early to tell why the reality didn’t match the expectation,” Gary Gudmundson, spokesman for the Ohio Department of Taxation, told the newspaper. “You do the best you can. It’s right there on the form. There is always a break-in period with anything that’s new. It’s there for the taking, and, obviously, we wish businesses would because we believe it can help them grow their businesses.”
The good news for owners in Ohio, though, is that for the 2014 tax year, the discount from this benefit is going to rise to 75 percent, the report said. Further, some lawmakers also want to make that deduction for entrepreneurs permanent as a means of theoretically attracting more small businesses to the Buckeye State overall.
Owners who want to further pad their chances for success in the future might want to consider the ways in which they can cut costs for their companies overall. That could include finding more affordable small business insurance coverage, such as commercial insurance, to potentially save thousands annually.
