Small businesses are facing a dramatic tax increase starting January 1, 2026, when a 20 percent tax deduction for income expires. The deduction was included in the Tax Cuts and Jobs Act (TCJA) of 2017. TCJA allowed small businesses structured as pass-through entities, like sole proprietorships, S corporations, partnerships, or limited liability companies, to deduct up to 20 percent of their business income. However, unless Congress makes the deduction permanent, the significant small business tax savings will expire in approximately two years, on December 31, 2025.
In response to …