Small Business Owners Rally Behind 20% Income Deduction: What It Means and Why It Matters

A new poll released by the National Federation of Independent Business (NFIB) reveals overwhelming support among small business owners for the 20% Small Business Deduction, a tax benefit that has significantly reduced income tax burdens since it was introduced under the 2017 Tax Cuts and Jobs Act (TCJA).

As Congress debates whether to make this deduction permanent, small business owners, CPAs, and tax professionals are closely watching. This blog breaks down what the deduction is, who qualifies, and why this benefit has become a lifeline for entrepreneurs nationwide.

What Is the 20% Small Business Deduction?

The Section 199A deduction, commonly known as the Qualified Business Income (QBI) deduction, allows eligible owners of pass-through entities—including sole proprietors, LLCs, S-corporations, and partnerships—to deduct up to 20% of their qualified business income on their personal tax return.

For example, if a qualifying small business reports $100,000 in QBI, they may be able to deduct $20,000 before calculating their individual income tax liability.

This deduction is set to expire at the end of 2025, unless Congress votes to extend or make it permanent.

Key Poll Insights: Small Business Owners Want It to Stay

The NFIB’s latest polling data reveals:

• Over 80% of small business owners support making the deduction permanent

• The deduction is credited with improving cash flow, enabling growth, and encouraging reinvestment

• Many respondents fear a significant tax hike if the deduction expires in 2025

  
  

These findings are shaping the conversation in Washington, especially as Congress evaluates broader tax code revisions heading into the 2026 tax year.

Why It Matters for Your Business

If you own a small business, especially one structured as a pass-through entity, the 20% QBI deduction can provide:

1. Lower Effective Tax Rates

By reducing your taxable income, the deduction effectively lowers your personal income tax burden without changing your business structure.

2. Increased Reinvestment Potential

Many small business owners use tax savings to reinvest in staff, equipment, or expansion.

3. Predictable Planning Tools

Knowing this deduction is available helps with long-term financial forecasting and estimated tax payment planning.

How Bizora Supports Tax-Efficient Business Structuring

Whether you’re launching a business or already running one, Bizora helps you:

• Understand entity formation and how it impacts QBI eligibility

• Coordinate with your CPA to track qualified income

• Stay compliant with evolving tax laws

• Plan proactively around the deduction’s potential expiration in 2025

Take Action: Plan Ahead for 2025 and Beyond

Now is the time to speak with your tax professional about how the 20% Small Business Deduction fits into your long-term strategy. If Congress lets the deduction expire, it could lead to significant changes in your tax liability starting in 2026.

Visit bizora.ai to learn more about our small business compliance tools and how we work with CPAs to optimize your financial outcomes.