Small businesses across America are breathing a sigh of relief following the recent signing of the One Big Beautiful Bill Act, which makes key tax provisions permanent. The National Federation of Independent Business (NFIB) has expressed profound gratitude to President Trump and Congress for implementing essential tax relief that many small business owners believe is vital for their growth and sustainability.
“It’s a historic victory for 33 million American small business owners,” said Brad Close, NFIB President. He highlighted how the act provides certainty and a level playing field, enabling small businesses to expand, create jobs, and invest in their communities. “President Trump and Congress have strengthened the foundation of our economy,” Close added.
The heartbeat of the bill is the 20% Small Business Tax Deduction, established in 2017. This deduction allows small businesses to deduct a significant portion of their business income. Facing an expiration deadline at the end of the year, this provision was crucial for many business owners. Without immediate legislative action, taxes on millions of small businesses would have surged. The enactment of the One Big Beautiful Bill Act now ensures that this beneficial tax deduction will remain in place permanently.
Beyond the preservation of the tax deduction, the act introduces additional provisions designed to ease the financial burden on small business owners.
One significant enhancement is the increase of the Section 179 expensing cap from $1.25 million to $2.5 million. This change allows small businesses to fully expense their business equipment purchases in the first year. For small business owners eyeing major purchases like vehicles, machinery, or technology, this provision can facilitate easier upgrades and expansions without the burden of long-term depreciation.
Additionally, the act makes the marginal tax rate cuts from 2017 permanent. This is critical since approximately 90% of small businesses operate as pass-through entities, paying taxes at individual income tax rates rather than the reduced C-corporation rates. With five out of seven marginal income tax rates poised to rise if left unchecked, this safeguard is a welcomed barrier against sudden tax increases.
The bill also raises and makes permanent the Small Business Estate Tax Exemption, setting new thresholds at $15 million for individual filers and $30 million for joint filers. This adjustment can significantly benefit family-owned businesses, allowing smoother transitions of ownership without the imminent threat of crippling estate taxes.
While the new legislation delivers substantial benefits, small business owners should also consider potential challenges. The aggressive tax code changes can create complexity and uncertainty, particularly for business owners who might still feel apprehensive about future tax scenarios. They may want to consult tax professionals to navigate these shifts effectively.
Furthermore, implementing these tax changes requires vigilant tracking of financial metrics to fully capitalize on the available deductions. Many small business owners are already pressed for time, so adopting efficient accounting practices or investing in accounting software may become necessary to leverage the advantages offered by the new bill.
As small business owners navigate this evolving landscape, it’s crucial to stay informed about new regulations and their implications. “The engagement of small business owners in this debate has been pivotal in delivering this victory,” Close pointed out, emphasizing that community involvement will remain integral as new challenges emerge.
The One Big Beautiful Bill Act represents a significant step in ensuring small businesses can thrive, grow, and contribute to the broader economy. With the assurance of long-term tax benefits, business owners can now plan for a more prosperous future. For more details on the legislation and its implications, visit the NFIB’s original announcement here.
Image Via NFIB
