Just over half (52%) of small business owners expect to get a refund and, among them, 70% have plans to put their refunds toward business growth initiatives, according to a new online survey conducted by Balboa Capital. The “Tax Time” survey was sent to a sample of small business owners nationwide in February 2020.

“With the 2020 tax deadlines looming, small business owners have already started preparing their returns, and half of those we surveyed anticipate getting a tax refund,” said Matthew Von Velasco, tax accountant at Balboa Capital. “Additionally, what we are hearing from business owners regarding their expected tax refunds is very encouraging. 70% of business owners said they are planning to reinvest their tax returns into their companies. This bodes well for their employees, suppliers, and vendors, not to mention their customers.”

Key findings of Balboa Capital’s 2020 “Tax Time” survey:

• 52% of SBOs expect to receive a tax refund this year.
• 88% of SBOs started preparing for tax season at least six months in advance.
• When asked what the biggest challenge relating to the tax season is, 65% of SBOs said tax preparation and filing.
• 86% of SBOs will meet this year’s tax filing deadline.
• 48% of SBOs will hire a tax professional to prepare their small business taxes, and 52% will rely on an in-house bookkeeper or accountant.
• Office rent topped the list of business-related tax deductions, followed by business equipment and office supplies, business vehicles, and employment benefit programs/retirement plans.
• When asked how they will use their business tax refund, 70% of SBOs said they would use it to pay for business growth initiatives such as equipment, inventory, technology, and expansion.
• 50% of SBOs who expect to get a tax refund this year said they would save some of the money for future business needs.
• Among business owners who think they will owe taxes year, 35% will try to obtain a short-term business loan to pay them, and 30% will ask for an extension from the IRS.