Challenges to Small Business from Regulation
Steve PerryRunning a business involves more than just the obvious costs like labor, materials, and rent. Business owners must also account for hidden regulatory expenses imposed by local, state, and federal governments. These include local business licenses, county taxes (often based on projected revenue), and state sales and income taxes. Federal taxes, especially employer payroll obligations like Social Security, Medicare, unemployment, and worker’s compensation, add significant cost—often turning a \$600 paycheck into over \$645 in actual cost. Misclassifying employees as contractors can lead to serious fines, so it's critical to follow IRS guidelines. Additionally, compliance with tax filing requirements demands time, expertise, and often professional assistance. Though this help incurs a cost, it's tax-deductible and far less expensive than penalties. All these factors must be included in pricing strategies to avoid financial pitfalls. Business owners should routinely review their finances, ideally with professional support, to adjust pricing or costs and ensure sustainability. Books, Taxes & More offers the expertise to help business owners stay compliant and profitable. Call 678-717-9818 for guidance.