Breaking Down the Main Street Tax Certainty Act: What You Need to Know

The Main Street Tax Certainty Act is a bipartisan legislation that aims to provide tax relief for small businesses by making permanent several key tax provisions that were previously temporary. The act was introduced by Rep. Brad Schneider (D-IL) and Rep. Jackie Walorski (R-IN) and has garnered support from both Democrats and Republicans.

So, what does the Main Street Tax Certainty Act entail and what do small business owners need to know about it? Let’s break it down.

One of the main provisions of the Main Street Tax Certainty Act is the permanent extension of Section 179 expensing limits. This allows small businesses to immediately deduct the cost of certain types of investments, like equipment and machinery, instead of depreciating the cost over several years. This helps small businesses save money on their tax bills and encourages them to invest in their businesses.

The act also makes permanent the 20% deduction for qualified business income for pass-through entities, like partnerships and S corporations. This deduction helps small business owners reduce their tax burden and allows them to keep more of their income to reinvest in their businesses or save for future growth.

Another important provision of the Main Street Tax Certainty Act is the extension of bonus depreciation. This allows businesses to deduct a larger percentage of the cost of certain investments in the year they are made, instead of spreading the deductions out over several years. This can provide significant tax savings for small businesses and incentivize them to invest in new equipment and technology.

Overall, the Main Street Tax Certainty Act is a positive development for small businesses, providing them with the stability and predictability they need to plan for the future. By making these key tax provisions permanent, small business owners can focus on growing their businesses and creating jobs, instead of worrying about changes to the tax code.

Small business owners should familiarize themselves with the Main Street Tax Certainty Act and consider how it could benefit their businesses. By taking advantage of these tax provisions, small businesses can lower their tax bills, reinvest in their businesses, and contribute to the overall economic growth of their communities.