The Benefits of Being a Small Business

From Bob Jennings at TaxSpeaker. Check out more at taxspeaker.com

In layman’s terms nearly ½ of all non-government workers work in small business, and nearly ½ of our country’s economic output comes from small business. On a daily basis we see cities and states granting incredible tax benefits to large corporation. If you think about it, who is paying that subsidy? Small business, which gets no tax abatements, matching grants, gifts or government aid.

Very few states offer any incentive, tax-wise, to operate a small business, when these statistics show that these short-sighted politicians are going for the headlines from short-term large employer hiring promises, when they should be aiming for long-term financial success from promoting small business. 

At least the Federal income tax system has several incentives for small business.

The Tax Cuts and Jobs Act of 2017 (TCJA), P.L. 115-97, enacted the most significant expansion of small business accounting relief in decades.  Amending IRC §448(c), the TCJA raised the gross receipts threshold to $25 million (inflation-adjusted), unlocking five separate Code exceptions for qualifying small business taxpayers.  For tax years beginning in 2026, that threshold — confirmed by Rev. Proc. 2025-32, §4.30 (published in I.R.B. 2025-45) — is $32,000,000.