Small business owners will face a large tax increase if Congress does not act by the end of next year.
According to the National Federation of Independent Business, three out of four of America’s small businesses benefit from a 20% pass-through deduction. This was a key component in the 2017 federal tax reform bill. Data from the IRS shows the collective tax benefit of this deduction is more than $2.6 billion in Missouri.
However, this tax benefit is scheduled to expire at the end of 2025.
The Missouri Chamber of Commerce and Industry is joining the U.S. Chamber, NFIB and other national organizations in urging Congress to pass the Main Street Tax Certainty Act, which would make the 20% pass-through deduction permanent.
This deduction allows eligible taxpayers to deduct up to 20% of their qualified business income (QBI), plus 20% of qualified real estate investment trust (REIT) dividends and qualified publicly traded partnership (PTP) income.
Entities eligible for the QBI deduction include:
Some small business owners said this deduction has helped them keep their lights on, invest in new equipment, provide greater benefits for their employees and create new jobs.
To learn more, contact Phillip Arnzen, director of legislative affairs for the Missouri Chamber, at parnzen@mochamber.com or call (573) 634-3511.
