On the surface, it seems obvious to most people what it means to refer to a business as “small.” The privately owned pizza joint on the corner, or the local pet grooming boutique, for example. And yes, these types of companies are considered small businesses. But what does that mean, exactly? And, to be more precise, what does it mean to the IRS?

A CPA in Tampa from Reliance Consulting, LLC, can help you understand the methodology the IRS uses to define a business as “small,” and what that means for tax purposes. It’s not always as clear-cut as it sounds. The IRS has very specific guidelines for the definition of a small business, usually broken down by industry. Here are some examples:

• Manufacturing companies with a maximum of 500 to 1,500 employees, depending on the product
• Wholesale companies with 100 to 500 employees, depending on the product
• Service companies with receipts between $2.5 million and $21.5 million, depending on the service being provided
• Retail companies with receipts between $5 million and $21 million, depending on the product being sold
• Construction companies with receipts between $13.5 and $17 million, depending on the type of project
• Agriculture companies with receipts between $500,000 and $9 million, depending on the type of agricultural product

As you can see, there is no across-the-board definition for a small business. Much depends on what industry you’re in, as well as how successful your company is. To learn more about how the IRS defines a small business, and the potential tax benefits of being classified as a small business, contact Reliance today.