Chapter 1

Small Business Taxes 101

IN THIS CHAPTER

Bullet Appreciating the value of year-round tax planning

Bullet Noting the various taxes you and your business pay

Even though I write about personal finances, including tax issues, I don’t particularly enjoy dealing with taxes. I would rather cut my lawn, take care of my neighbor’s dog, or even visit my dentist (for a routine cleaning). At least in all these cases, I know my time commitment is reasonably limited, and when I’m done, I’m satisfied that the job has been done well, and I can move on to something else.

Filling out state and federal tax forms is often complicated and confusing. Because I write about taxes, I feel that it’s essential for me to complete my own forms and returns, which forces me to wallow in the details as much as possible so that I can more fully appreciate the challenges taxpayers face. (By contrast, prior surveys have found that the representatives in Congress who sit on committees that draft the nation’s tax laws generally use paid tax preparers themselves.) A report from the National Taxpayer Advocate cited “the complexity of the tax code as the No. 1 most serious problem facing taxpayers.”

Though some of this book deals with the drudgery of completing required tax forms, much of it deals with the more interesting ...

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