Dec 10, 2012 · Amelia Pentecost
Small business owners are optimistic about 2013, although they remain cautious. About 29% of entrepreneurs polled by Capital One expect to see the US economy improve in the next year, but are still reluctant to expand their business or hire new employees. As a small business owner, what should you expect in 2013?
According to the survey released by Capital One, only 27% of small businesses polled expect to hire new employees in the next six months. This number may not seem surprising until you remember that earlier in the quarter, the number of small businesses planning to hire new employees came in at almost 40%. Companies polled were from five districts or states and reported under $10 million in annual revenue. There are a few different explanations for low hiring rates. One could be The Affordable Care Act, which requires companies with more than 50 employees to provide health benefits or begin paying penalties in2014 – business owners may be closely tracking hiring to avoid these extra expenses.
Financial Performance and Spending
Nearly half of small businesses report that their financial condition is holding steady. The majority of small businesses (65%) are planning on keeping spending levels the same in 2013, and only 21% of those surveyed had tried to obtain financing in the past year.
New Policies and Tax Changes
A new year means a new round of potential US tax law changes. We’ve summarized the top three pieces of legislation that may affect your small business. The first is the 2% Payroll Tax Holiday. For employees, the social security tax rate could revert back to 6.2% in 2013 unless the government extends the provision another year (currently the rate is 4.2%). There are also individual tax rate changes, which are scheduled to increase in 2013 unless the government decided to extend the existing lower rates. Lastly, high-earners will see tax increases. Currently, workers and employers pay a 1.45% Medicare payroll taxes. Starting January 1, individuals earning over $200,000 could see their Medicare payroll tax increase 2.35%.
Need help planning for 2013? Contact Kendra Ott, Associate Director of Business Advising today at email@example.com to get a one-on-one advisor or to schedule a Strategy Roundtable session