The Nationwide Small Enterprise Affiliation (NSBA) launched its 2025 Small Enterprise Taxation Survey, highlighting the challenges small companies face attributable to federal tax legal guidelines. The report underscores considerations concerning the expiration of the 2017 Tax Cuts and Jobs Act, which many small companies concern will lead to important tax will increase.
In response to the survey, 83% of small companies are structured as pass-through entities, that means they pay enterprise taxes on the private earnings stage. This construction makes them notably susceptible to potential tax hikes if Congress doesn’t prolong expiring tax cuts.
Different main findings embrace:
- Greater than 20 hours per yr are spent coping with federal tax compliance by most small-business house owners, although many rent exterior tax professionals.
- 90% of small companies report that federal taxes impression their day-to-day operations, with one in three citing a major impression.
- Greater than half of small-business house owners say accessing wanted data straight from the IRS is tough.
- Tax administration and complexity—slightly than monetary price—is cited as the biggest burden.
- Amongst small companies that outsource items internationally, China is the most typical nation they buy from.
NSBA has lengthy warned policymakers concerning the disruptions attributable to sunsetting tax legal guidelines, emphasizing how these uncertainties place extra burdens on small companies. The expiration of key tax provisions, together with the 199A Certified Enterprise Earnings Deduction, stays a prime concern.
“Given that almost all of small-business house owners pay enterprise taxes on the private earnings stage—83 p.c are pass-through entities—it’s no marvel small companies are very involved about potential and important tax hikes if Congress fails to deal with the expiring tax cuts,” said NSBA President and CEO Todd McCracken.
The survey outcomes come as small-business advocates urge Congress to prioritize tax stability and long-term aid. NSBA Board Chair Michael Canty, of Alloy Precision Applied sciences, emphasised the necessity for predictable tax insurance policies that guarantee small companies usually are not disproportionately affected.
“As Congress embarks on any tax extender or tax reform dialogue, it’s crucial that small companies are afforded tax stability, predictability, and permanency, to not point out parity with bigger companies,” Canty said.
