It's tough enough running a small business, but having to keep up with ever-changing tax codes and then filing a tax return on time is putting an extra burden on business owners.

Rather than spending countless hours compiling tax information, more small businesses are opting to pay accountants and other tax preparers to do their return. Although the fee is another expense for small businesses, many owners say it's a necessary evil.

"It's not like I want to pay it, and it's not like it's cheap, but you're paying for security and you're just hoping that they do a good job so you don't get audited," said Tony Yamada, a partner with Ideal Collectables, which has been in business for seven years.

Yamada said his company has seven employees, making it too large to do the taxes in-house but too small to hire an accountant full time. He said many similar-sized businesses face this problem, and owners need to decide if the expense of outsourcing is worth it.

"You have to look at it as a cost of doing business," he said. "If you want to lose your personal life to your business, then that's fine, but I don't think my partners or employees want to do that kind of stuff."

Hong Zeng Yuen-Schat, owner of Zen Chiropractic, has just one part-time employee, and he does his own bookkeeping. But when it comes to doing his taxes, Yuen-Schat turns to his accountant.

"I have an accountant go through the data. I feel more comfortable," he said. "They keep up with the changes in the tax law, and they give me advice on how much we can put away to reduce the tax liability."

The U.S. Small Business Administration's Office of Advocacy said businesses with fewer than 20 employees have an "uneven burden" when it comes to income taxes. These businesses spent $1,304 per employee to comply with the federal income tax structure in 2004, twice as much as businesses with more than 500 employees, the SBA said.

The SBA blamed the high cost on the complexity of the federal tax code and the amount of paperwork, record-keeping and the need to hire outside experts to do the tax preparation.

"Taxes have always been a problem for small businesses," said Jane Sawyer, U.S. Small Business Administration spokeswoman in Hawai'i. "One of the things that has become so difficult or onerous is the complexity of the tax law and everything they need to do to actually process their taxes, document their deductions and be able to keep up with changes. It makes it very, very difficult just for the process, let alone the rate of taxes that many of them are faced with."

Accountants usually see an increase in inquiries from small businesses as the tax deadline approaches. But Rodney Saito, a certified public accountant with Freitas and Saito, said owners need to seek tax help long before the federal deadline, which this year is April 17 for most filers.

"Being a small-business owner, you're so concentrating on the operations that sometimes the bookkeeping is the last thing that they get to, so when it comes to this period, they're just rushing to get everything done," Saito said.

For those who do their own record-keeping, Saito said these owners need to set aside time regularly to concentrate on the books. He said there is accounting software available to help.

But he said when it comes to filing tax returns, a business owner should turn to an expert, whether it's an accountant, lawyer, small-business advocacy group or the government. A good accountant, he said, has to keep up with changes in the tax law.

"The federal government is required to balance the budget over a 10-year period, so a lot of tax provisions that Congress puts in are temporary and they'll start to phase out," Saito said. "When it comes to the end of the period, Congress will either extend it or let it go, so there's always phase-in and phase-out rules."

Businessman Yamada agreed.

"We're so not informed on any of that kind of thing that it saves us a lot more time to pay the accountant his rates than having to do it in-house," he said. "Time is money, and we're better off on the sales floor and cutting deals here and there."

Reach Curtis Lum at culum@honoluluadvertiser.com.