Tax Season: Ways to Save Time and Money

Two major assets we have are our time and money — and as millions of taxpayers prepare to file annual tax returns on April 15th, this year’s tax code updates offer opportunities to save both. They can be used if you are filing as an individual, an existing small-business owner, or one of the millions of new entrepreneurs who have recently joined the ranks of the self-employed since the Covid-19 pandemic.     

The explosion of new entrepreneurs into the small-business community has been astounding. This year, small-business owners in charge of over 33 million small businesses operating around the country will be filing as self-employed — the most in our nation’s history. Those small businesses today account for 99.9 percent of all types of businesses nationwide and are the lifeblood of our nation’s economy, and increasingly a career path for more Americans. This is particularly true of older Americans who are seizing the opportunity to start a second career after retirement, finally getting an opportunity to launch a dream they may have had their entire lives.  

The self-employment community rebounded in record time from the pandemic, surging past pre-pandemic levels in just a few short months. Earlier this year, the Small Business Administration (SBA) announced a record 16 million new small-business openings in the past three years alone — building off last year’s Yelp report showing each state in the U.S. was on track to surpass new business openings this year. 

From every corner of our country to each side of Main Street, these small businesses are your local accountants, bakers, consultants, web designers, and gig economy workers. They have taken a brave risk by branching out on their own, helping fuel the middle class and our local and national economies. Representing an economic powerhouse, they have created 61.7 million American jobs, accounting for nearly 50 percent of all U.S. employees in the United States, per the SBA. 

Many Americans who were either facing uncertainty at work or looking for a new opportunity made a courageous choice to strike out on their own. The “Great Resignation” movement started during the pandemic has now morphed into a “Great Rethink” strategy in which employees in traditional employment roles are continuing to ask, “Do we really like our employers’ culture? Do we feel that we’re fairly treated?”

Benefiting From Tax Season

With new entrepreneurs filing returns as small-business owners for the first time, many may not be aware of the benefits afforded to them since they’ll be filing at the individual rate like the majority of Americans. These small-business owners are uniquely positioned to take advantage of the tax policy available to them at the individual rate, while also benefiting from policies available to small-business owners.  

The Internal Revenue Service updates the tax code each year with relevant changes impacting a filer’s tax return and bottom line. These updates, along with key policy advancements like the home office standard deduction, are designed to save both time and money. 

All Americans will benefit from the IRS’s new annual inflation adjustment, and small-business owners can use the extra savings coming from the expanded tax brackets to save and grow, freeing up capital to help pay for an additional piece of office equipment, a new employee salary, or other business-related expenses. 

New and updated key policies for 2023 income tax returns include:

• The IRS’s current modernization effort creates a more simple process for tax filing–which helps save time and money. Improving security, electronic filing options, and customer service helps small-business owners comply with their basic filing responsibilities, creating even more jobs for the American economy.
• The IRS’s tax return filing submission portal is open and accepting returns, so file as soon as possible for any owed refund; if you owe money, you have more time until the deadline to submit your payment or work with the IRS on a payment plan.  

And don’t overlook hidden deductions, which can also help your bottom line. If you still need more time, file an extension to file an accurate return without a penalty. 

Giving Voice to America’s Small Businesses

Despite all the differences in our nation’s capital, support for America’s small-business community is a bipartisan issue — policymakers of all stripes love small businesses. As more Americans continue to turn to self-employment, the community needs support for pro-growth, pro-entrepreneurship, and anti-red tape policies.

Many of these policies don’t require new laws, but rather small tweaks to existing policies, like ensuring tax equity and simplification in the tax code, offering increased access to affordable health care, opening new lines of capital, and investing in more creative retirement options for small-business owners.

 As the small-business community grows, so should our policies for strengthening them–surgically targeting the community while considering their unique attributes and challenges, all while bolstering their ability to save, grow, and thrive.