The National Federation of Independent Business (NFIB) recently sponsored an event with The Hill to discuss the future of the 20% Small Business Tax Deduction. This deduction, part of line 13 on Form 1040, is set to expire at the end of 2025 unless Congress acts to make it permanent.
Adam Temple, Senior Vice President of Advocacy at NFIB, highlighted the uncertainty faced by small businesses. "Planning is huge. A mom-and-pop, they’re trying to make it through the next month and the next year. But they need to be able to have some level of certainty that they’re going to be able to do that," he said. Temple noted that the NFIB Uncertainty Index peaked in October due to concerns about future tax obligations.
Rep. Lloyd Smucker, a member of the U.S. House Ways & Means Committee, expressed optimism about bipartisan efforts to address this issue. “I do think there’s a real opportunity to do this in a bipartisan way…We want an economy that is working for the American people," Smucker stated.
The event also featured NFIB member Candice Price, who emphasized the challenges small business owners face due to potential changes in tax policy. “It’s very tough to be able to grow and maintain if you don’t know what’s coming,” Price explained.
The 20% Small Business Deduction was introduced as part of the 2017 Tax Cuts and Jobs Act with the aim of leveling the playing field between small businesses and larger corporations. Without legislative action, nine out of ten small businesses could experience significant tax increases starting next year.
The panel included several key figures such as Alison Couch from Ignite Accounting & Business Advisors, Rep. Brad Schneider from Illinois, Dana Peterson from The Conference Board, and Joby Young from the American Farm Bureau Federation.
The NFIB encourages small business owners to join over 95,000 others in signing a petition advocating for making this deduction permanent through legislation like the Main Street Tax Certainty Act.
