Critical Small Business Problems & Priorities National Federation of Independent Businesses

Critical Small Business Problems & Priorities National Federation of Independent Businesses

Every four years since 1982 the NFIB has surveyed a large sample of small business owners to research their perspective on 75 potential business problems. Here are the top “Critical” problems and priorities from the most recent survey.

1. Cost of Health Insurance

This has been the number one problem for small business for 30 years! 52% of NFIB respondents cited this as number one. Health insurance costs for small business have risen 56% in the past ten years, outpacing wages and inflation. Higher costs have driven a decline in the number of companies offering health insurance from 42% in 2004 to 29% currently.

2. Unreasonable Government Regulations

This moved up from fifth four years ago due to the increasing burden put on business by the last Administration. The cost of compliance was characterized by extra paperwork and difficulty understanding exactly what had to be done to comply.

3. Federal Taxes on Business Income

30% of respondents cited Tax related issues like current rates, complexity of compliance and frequency of change in regulations as their number 3 problem and priority. “State Taxes on Business Income” ranked number 10 on this list. Confiscation of profits for taxes were cited as a key impediment to growth.

4. Uncertainty over Economic Conditions

Uncertainty triggers anxiety among consumers, investors and business owners, which is a true enemy of economic growth. The ability to anticipate future costs is critical to business plans and expansion opportunities.

5. Tax Complexity

Mounting pressure to simplify the tax code is being driven by the increasing cost and time consumption of Tax Compliance. Reduced compliance costs by the new Administration will contribute to capital accumulation and the owner’s ability to focus on growing their business.

6. Uncertainty over Government Actions

In addition to the headline reform issues, imposition of regulations on businesses by other fed, state and local agencies in areas of employment and the environment drive the criticality of this issue for over 26% of survey respondents.

7. Frequent changes in Federal Tax Laws and Rules

The Patient Protection and Affordable Care Act drove the high ranking of this issue. Unpredictability and hidden changes in the tax law creates compliance costs, time and fees, which are a hidden tax on small firms.

New Payroll Tax Withholding Tables

New Payroll Tax Withholding Tables

President Trump signed The Tax Jobs and Cuts Act of 2017 into law on December 22, 2017 necessitating revised payroll tax withholding tables. The new tax act changes the tax rates, as well as the taxable income brackets.

IRS has updated its tax withholding tables to reflect the new law. Employers are instructed to use the 2018 withholding tables as son as possible, but in any case, no later than February 15, 2018.

For taxpayers who are paid weekly, bi-weekly or semi-monthly, here’s what the new tables look like:

Top Small Business Compliance Issues for 2018

Top Small Business Compliance Issues for 2018

1. Tax Reform

Employers must implement new withholding tables (tables available from TAG) no later than February 15, 2018. New provisions of this legislation take effect in 2018 and employers should assess what changes they should make to stay in compliance with the IRS.

2. States Reaction to Federal Tax Reform

Although most states conform to the IRS code, many states are trying to lessen the impact on state tax payers and state revenue. Look for new state tax laws in reaction to federal tax reform.

3. Overtime Regulations

The prior administration’s Final Overtime Rule was invalidated in late 2017. New federal overtime regulations could be in place in early 2019. Meanwhile, continue to comply with existing federal and state overtime regulations.

4. Minimum Wage Increases

A federal minimum wage increase isn’t expected soon. But many states and local jurisdictions have been inspired to raise theirs in response. Keep up with your state and local wage laws.

5. Expansion of Pay Equity Rules

Many state and local legislatures are expanding their pay equity regulations to protect workers. There are many tricky compliance issues here for employers, including non-retaliation, and in some cases to protect applicants, like not asking about salary history.

6. Paid Leave Law Expansion

The trend that more states and cities are implementing paid sick leave policies. Compliance is complicated, to say the least. An additional trend to keep an eye on is paid family leave, which is also expanding at all levels of government.

7. Healthcare Regulations

ACA will continue as the law of the land until and unless congress repeals and replaces it. It is wise to continue compliance with the unchanged ACA, rather than betting on a change and relaxing your compliance efforts.