What You Need to Know About the Pending Main Street Tax Certainty Act

In our never-ending quest to bring you the latest information on entrepreneurship and small business ownership, FranNet of DFW & Oklahoma has a news and noteworthy update to share. It has to do with legislation that was filed in late July regarding how much small business owners can file for deductions on their income. Congressman Lloyd Smucker (PA-11) has introduced a new bill, the Main Street Tax Certainty Act, H.R. 4721, which – if passed and signed into law – would preserve and protect an existing (and beneficial) section of the IRS tax code.

The section of the IRS tax code in question is 199A, which was adopted by the passage of the Tax Cuts and Jobs Act of 2017. It allows for a 20% deduction of qualified income for pass-through businesses, which is how most existing franchise units are set up. If this deduction is not extended by this new legislation, it will expire in 2025. The bill gets its “Main Street” moniker because this tax advantage is meant to close the tax code gap between America’s small business owners and their larger corporate counterparts. Let’s look at some specific benefits if you’re considering business ownership through franchising.

Quick Facts on IRS tax code 199A:

FranNet of DFW & Oklahoma brings you the critical facts about this extremely important business deduction for small business owners:

• Since 2018, small businesses structured as pass-through entities – including sole proprietorships, S-corporations, partnerships, or LLCs have been able to deduct up to 20% of their business income.
• Without extending this benefit, this important deduction will expire in 2025.

Widespread Support

Most economists agree that small business ownership in America is the very backbone of our economy. According to the Small Business Administration (SBA), there are more than 33 million small businesses in the U.S. today, employing over 61 million people – equal to some 50-60% of the eligible workforce in America. That’s why the Main Street Tax Certainty Act enjoys widespread, bipartisan support from legislators, as well as numerous pro-business organizations. These include the National Federation of Independent Businesses (NFIB), the U.S. Chamber of Commerce, the S Corporation Association, the National Franchisee Association, and more than 160 industry trade organizations.

What Happens Next?

The Main Street Tax Certainty Act is in the first of five stages in the legislative process. The bill, H.R. 4721, has been formally introduced and referred to the House Committee on Ways and Means. It’ll have to pass a majority vote in both the House and Senate before heading to the President’s desk for signature, where – if signed – it will become a permanent part of the IRS tax code.

What You Can Do to Help

If you’d like to be counted among the millions of small business advocates in America who support making these tax deductions permanent, you can add your name to the list of individuals advocating for this positive outcome. You can easily compose a personalized message to your U.S. House Representative or Senator urging them to act on this legislation. Simply follow this link to the NFIB Advocacy site and make your voice heard the democratic way!

If you are currently considering an entrepreneurial future – or plan to in the future, it’s extremely important for you to voice your opinion on this critical issue, which has the full support of FranNet of DFW & Oklahoma. You can follow the progress of this bill on the official website of the U.S. Congress.

Let’s Chat!

If you’d like to know more about franchise opportunities and ownership, please get in touch. FranNet of DFW & Oklahoma is uniquely qualified to match your potential with the possibilities that come from small business ownership through franchising. All you have to do is allow us to be your guide. Our no-cost, no-obligation consultations have helped hundreds of entrepreneurs in North Texas and Oklahoma secure a future that belongs to them and them alone. If you’d like to get started on your own entrepreneurial journey, we’d love to introduce you to a whole new world of possibilities through franchise ownership.