Small Business Tax Struggles in 2025: Insights from FreshBooks

The Unseen Battle: Tax Season Stress and Small Businesses

For many small businesses, the tax season is not just another administrative task; it’s a significant source of anxiety and stress. The latest report from FreshBooks highlights the challenges faced by entrepreneurs and freelancers in 2025 and how these individuals manage their fiscal responsibilities amidst growing complexities.

Confidence Gap: A Concerning Trend in Tax Filing

According to the FreshBooks report, only 26% of small business owners feel entirely confident in handling their taxes. This low confidence can stem from the intricate maze of ever-changing tax laws and the daunting task of ensuring accurate submissions. As stated in GlobeNewswire, many entrepreneurs are figuratively ‘winging it’ when it comes to taxes, potentially exposing themselves to severe financial implications.

Procrastination Habits: A Persistent Problem

While 78% of entrepreneurs claim they begin tax preparation early, the FreshBooks report paints a more concerning picture with 51% of Gen Z self-employed individuals admitting to waiting until the last moment. This procrastination, driven by the complexity and stress of tax preparation, often results in last-minute chaos and inadequate filings.

Tackling Tax Time Troubles: FreshBooks to the Rescue

Using software or hiring accountants to manage taxes is a popular choice, illustrating the increasing reliance on professional tools and services. FreshBooks, renowned for its user-friendly accounting solutions, is at the forefront of this trend, offering small businesses a way to streamline their processes and reduce the burden of tax preparation.

Why Accountability Matters: Motivations and Mistakes

Fear of repercussions is a significant motivator for tax compliance — 46% of businesses worry about penalties while 37% dread potential audits. This fear highlights the need for reliable accounting solutions that ensure businesses meet their tax obligations without errors or oversight.

Conclusion: Navigating the Tax Maze

The insights from the FreshBooks 2025 Tax Trend Report reveal a pressing need for support and guidance for small business owners navigating the complex world of taxes. By adopting solutions like FreshBooks, entrepreneurs can mitigate risks and focus on growing their businesses with confidence.

For a deeper dive into this essential topic, the full report offers a comprehensive overview of the methodologies and demographic insights that paint the broader picture of tax challenges in 2025.