While the Patient Protection and Affordable Care Act (PPACA) was signed into law more than three years ago, only a third of small businesses polled (34 percent) understand the full impact the PPACA has on them, both financially and in terms of reporting, according to a survey recently released by ParenteBeard, a top 25 U.S. accounting and business advisory firm. Additionally, the majority of businesses polled (52 percent) said responding to PPACA changes to their operations is a higher priority over the next 12 months than tax planning – even in light of recent tax law changes in the aftermath of the fiscal cliff deal. The survey of 74 small businesses demonstrates the struggles that many face in trying to understand and implement changes in legislation.
“It’s important that businesses consider what portions of the Patient Protection and Affordable Care Act may impact them and understand both the short- and long-term implications,” said John Nealon, practice leader of ParenteBeard’s small business group and regional managing partner for the Northern PA region. “But that’s a lot to ask when you’re also trying to keep your business running. That’s why businesses should consult with their advisors to develop a plan that will have them prepared when the changes take effect.”
The survey revealed that nearly a quarter of businesses polled (23 percent) understand the financial impact the PPACA has on them, but do not understand how it will affect their reporting. What’s more, 43 percent do not understand how the PPACA impacts them on either front. Only slightly more than 1 in 10 businesses polled (12 percent) fully understand both the financial aspects and the reporting requirements they are faced with because of the PPACA.
The survey results also shed some light on the perspectives that small businesses have towards tax planning. More than half of the businesses polled (54 percent) said tax planning has not moved up on their business priority list even in the wake of recent tax law changes. Furthermore, the majority of businesses surveyed (57 percent) said tax planning is not a top priority for their success. This comes despite nearly the same number of businesses (57 percent) saying they consult with their tax professional more frequently now than they did 18 months ago.
“While small businesses may be consulting with their tax advisors more often now than they have in the past, the survey results suggest these businesses might not fully understand the potential benefits of creating a thorough tax plan and making it a priority,” said Nealon. “Tax planning is something that businesses need to consider all year, not just around tax time. With all of the recent changes in legislation, tax planning is more critical for small businesses now than it has been ever before.”
For more insights on the challenges small businesses are facing and tips on how they can be addressed, visit ParenteBeard’s Small Business Tax Toolkit, an online resource center that helps small businesses stay informed.
ParenteBeard is ranked among the top 25 accounting firms in the U.S. With over 1,000 professionals, the firm is a leader in providing CPA and business advisory services to small businesses, middle market companies, nonprofits and SEC registrants. As an independent member of Baker Tilly International, ParenteBeard is proud to provide the highest level of service to clients nationally and internationally.