A new survey revealed some interesting things about small businesses and this past year’s tax season. Plus some bad news for job seekers and some good news for Donald Trump.
For starters – and despite all the news about smaller refunds and the complexities of the 2017 tax reform legislation – small businesses were actually happy with the way this past year’s tax season turned out. About 51% of the more than 300 small business owners asked in a recent study conducted by the cloud hosting firm Right Networks said their tax season was either “streamlined” or “satisfying” with only 8% saying it was “disappointing”.
The – ahem – accountants (you’re welcome) got much of the credit. Overwhelmingly, in fact.
Of the survey’s respondents 97% said they were either “satisfied” or “very satisfied” with their CPA’s knowledge of the new tax rules and 68% said that their CPA correctly anticipated the impact of the tax changes on their business and guided them on how to take advantage. I heard from others in my profession that this past busy season was among the toughest ever, but it looks like my colleagues rose to the challenge.
“Small businesses we surveyed gave their CPA a resounding thumbs up when it came to guiding them through the 2018 tax reforms,” Right Networks’ CEO, Joel Hughes, said in a statement. “In a year when strong collaboration was essential, CPAs adeptly navigated the reforms and helped their small business clients reap the benefits.” Right Networks is a client of my technology firm and offers some accounting applications and technologies that my firm resells and implements.
All of that is good news. But the survey also revealed two other things that should concern both Republicans and Democrats as we head into the 2020 election season.
The first has to do with spending. The Right Networks survey found that the top two things that small companies will do with their tax savings – if any – will be to either buy more inventory and capital goods or just pocket the money. Hiring people came in a distant third. Hughes believes that this is because many of us still harbor memories of the Great Recession and are being more conservative with our profits. He also says that many small businesses simply can’t find the people to hire and are instead investing in technologies and capital items to increase the productivity of their existing staff.
He’s right. Small business confidence has remained strong, but recent surveys from the financial services firm Cbiz and payroll services giant ADP have showed either a decline or “erratic” hiring by small businesses in recent months. Even though job openings are at an all-time high, many small companies can’t find workers – particularly skilled workers – to bring on board.
And despite the current administration’s trade and immigration policies that are affecting businesses and hiring around the country, it’s Democrats who may need to be worried about something else: 46% of the respondents viewed Republicans as more favorable to the success of their business, compared with 38% who thought the same of Democrats.
These results don’t surprise me either. Many of my clients, despite their reservations about the president’s behavior and some of his policies, continue to view his administration as very pro-business and when people – especially business people – are making money, they’re not inclined to change things.
The good news for Democrats is that the survey’s margin of error is 5%. So there’s plenty of time for them to make their case.
