Small-business owners will be digging into details of the tax-reform plan, already leaked to the press, that GOP leaders and President Trump will officially announce later today. For small business owners, one focus will be on a reported 25 percent rate for pass-through business income, which is paid by the majority of the 28 million small businesses in the U.S. Tax reform related to the expensing of investments and interest paid on investment financing are also important. But tax experts say it's critical for small-business owners to first be on top of their effective tax rate. Business owners are not as on top of their tax situation as you might expect.
Twenty-two percent of small-business owners didn't know their effective tax rate in 2016, according to a new CNBC/SurveyMonkey Small Business Survey. That was the most common response from entrepreneurs, tied with an equal 22 percent who said their tax rate was 16 percent to 25 percent.
"I started out in 1990 as a solo-practitioner financial planner, and notwithstanding the fact that I did tax planning for my clients, I paid little or no attention to my own business finances," said David Yeske, certified financial planner and the managing director of Yeske Buie. "[It] just never seems a priority compared to serving clients and bringing in new business."
Yeske said the majority of business owners he has worked with don't know their rate.
At the same time, business owners consistently tell CNBC/SurveyMonkey that taxes are the most critical issue facing their business.