You’d be surprised how many small business owners didn’t pay a penny of their taxes last year. That doesn’t mean they don’t owe taxes. It just means they put off payment, or didn’t have enough money because their businesses were so unprofitable.
Maybe you have a mobile dog trimming business and you cut the hair of a lot of poodles in 2016, but you were a few hundred poodles short of making it out of the red. Regardless your reason for getting behind, the IRS will not be lenient if it discovers you skipped paying your due. IRS garnishment and other serious consequences can happen to anyone who is in tax debt.
Reforms could help in the tax department
With the expected post-election changes in government in 2017 – regardless your political opinion – some small business owners are hopeful that they will benefit from tax reforms. For example, the president-elect has laid down a tax proposal that could reduce corporate taxes to 15 percent. Also, pass-through entities and S corporations could benefit from a 15 percent tax rate ceiling.
Lower taxes for smaller business owners means that for the little guys – like dog groomers, plumbers, carpenters, handymen, hair stylists, nail technicians and others – it could be easier to meet tax obligations and avoid getting into tax debt. Lower small business taxes could also help entrepreneurs save the money they need to pay off any lingering tax debts from the recent recession and other years passed.
Stay optimistic and get debt help when necessary
Every small business owner needs to have optimism in the face of uncertainty, even when looking at red numbers on their business ledgers. In fact, we don’t know what the next presidency and Congress will bring, nor do we know what future business climates will look like. However, we can certainly stay optimistic while taking every action required to improve our business profitability and pay down outstanding debts.
For small business owners, IRS tax debt can have serious financial consequences. However, a Texas tax lawyer can provide solutions that can help business owners in tax debt to resolve their financial liabilities once and for all.