J.K. Lasser's Small Business Taxes 2022

Introduction

Small businesses are vital to the U.S. economy despite the pounding they took from the pandemic. While tens of thousands of small businesses went out of business, many new ones started up. Small businesses account for 99.9% of all firms, employ nearly half of the country's private sector workforce, and contribute more than half of the nation's gross national product.

It's estimated there were more than 32 million small businesses—sole proprietorships, limited liability companies, partnerships, S corporations, and C corporations. While COVID-19 certainly hit many small businesses hard, the pandemic did not stop interest in entrepreneurship. The gig economy expanded and small businesses continued to be present on Main Street, farms, homes, and anywhere else that a business can be found.

Small businesses fall under the purview of the Internal Revenue Service's (IRS) Small Business and Self-Employed Division (SB/SE). This division services approximately 57 million tax filers, including 47 million individuals filing Schedules C, E, or F, as well as (3.8 million partnerships and 6.8 million corporations with assets of $10 million or less), more than 41 million of whom are full-time or partially self-employed, and about 7 million filers of employment, excise, and certain other returns. The SB/SE division accounts for about 40% of the total federal tax revenues collected. The goal of this IRS division is customer assistance to help small businesses comply with the tax ...