|
Everyone knows the One Big Beautiful Bill—But Did You Know It Included Making the 20% Small Business Tax Deduction Permanent?
Congress has passed the One Big Beautiful Bill Act, and tucked inside is a major win for small businesses: the permanent extension of the 20% Small Business Tax Deduction.
What’s the Deduction?
The deduction—originally created in the 2017 Tax Cuts and Jobs Act—allows small business owners organized as pass-through entities (such as S-corps, partnerships, and sole proprietorships) to deduct up to 20% of their qualified business income from federal taxes. Without action, the deduction was set to expire at the end of 2025, leading to a significant tax hike for millions of small businesses.
Highlights
- The deduction is now permanent, giving business owners long-term certainty.
- The Act also includes other provisions that benefit small businesses, including:
• Doubling the Section 179 expensing cap to $2.5 million.
• Effective January 1, 2026, is increasing and making permanent the Small Business Estate Tax Exemption ($15M individual / $30M joint).
Why It Matters
By making the 20% Small Business Deduction permanent, Congress has locked in a top priority for small business advocates and ensured ongoing relief for millions of Main Street employers.
|