12 Million US Small Businesses Receive Average Tax Relief of $7,000

The permanent extension of a small business deduction provided roughly $4,600 in tax relief to 8 million business owners, the Treasury secretary said.

Naveen Athrappully

Published: 4/4/2026, 10:10:25 AM EDT

12 Million US Small Businesses Receive Average Tax Relief of $7,000 — Administrator of the U.S. Small Business Administration, Kelly Loeffler, speaks during an interview with EpochTV’s “American Thought Leaders” at her office in Washington on Jan. 7, 2026. (Madalina Kilroy/The Epoch Times)

Millions of small businesses across the United States are seeing an average tax reduction of $7,000 this filing season, the Small Business Administration (SBA) said in an April 3 post on X.

The SBA attributed this to provisions in the One Big Beautiful Bill Act, such as enabling businesses to immediately deduct their research and development spending rather than over multiple years, and a permanent 20 percent deduction made available to small businesses. President Donald Trump signed the bill into law in July.

“We’re putting more money in the pockets of America’s hardworking job creators!” the SBA posted.

During March 30 remarks at a business conference, Treasury Secretary Scott Bessent detailed these benefits.

“Across the country, households and businesses are already seeing the benefits of this legislation, with millions of Americans keeping more of what they earn and watching their paychecks go further,” Bessent said. “On average, the law is reducing taxes for roughly 12 million small business owners by nearly $7,000.”

“The permanent extension of the 20 percent Small Business Deduction alone is delivering about $4,600 in average tax relief to 8 million entrepreneurs around the country.”

The deduction is related to the 2017 Tax Cuts and Jobs Act. The Act enacted the Qualified Business Income deduction that allowed an owner of a pass-through entity to deduct up to 20 percent of the income on their personal returns received from that business, a provision set to end by the end of 2025, according to a July 25 post by accounting company Warren Averett.

A pass-through entity is a business that does not pay taxes on its revenues. Instead, the revenue is passed to the owners of the business, who then file taxes based on their individual tax rate. These entities help business owners avoid the issue of double taxation when a business income is first taxed at the business level, and then at the individual level when they receive the profits.

For pass-through entity owners, the 2017 provision made their maximum effective tax rate on income from such businesses 29.6 percent rather than 37 percent, Averett said. The One Big Beautiful Bill Act made the 20 percent deduction permanent.

In his speech, Bessent said the Trump administration has also taken steps to support innovation and investment among domestic enterprises.

“Immediate deductibility for R&D expenses has been restored, and applied retroactively, unlocking an estimated $100 billion in prior-year deductions for tens of thousands of small businesses,” the Treasury secretary said.

“Full expensing provisions allow businesses to deduct the cost of investments upfront, improving cash flow and making it easier to move forward with growth plans.”

In an April 3 post on X, SBA administrator Kelly Loeffler said she recently visited a machinery operation in Michigan and saw “firsthand how that relief is translating to local hiring and expansion,” referring to the tax savings made by small businesses.

Business Optimism, SBA Loans

While small businesses are saving on taxes, optimism among owners has declined, according to a March 10 post by the National Federation of Independent Business (NFIB).

NFIB’s Small Business Optimism Index declined in February from the previous month. The net percent of small business owners expecting higher real sales volumes declined by eight points, erasing the six-point gain made in January.

When the owners were asked to evaluate the overall health of their business, 12 percent said it was excellent, down two points from January.

However, “although optimism declined slightly, small businesses report feeling more certain in February as they look toward the coming months,” NFIB chief economist Bill Dunkelberg said.

“High sales and increased profits made February a more positive month for many owners, but competition from large businesses is putting stress on Main Street firms as they navigate the current economic climate.”

The SBA has introduced various initiatives to assist small businesses.

On March 31, the agency announced a new “Made in America Loan Guarantee” program aimed at restoring the country’s manufacturing dominance.

Small business owners will soon be eligible for enhanced support through the International Trade Loan (ITL) program that comes with 90 percent federal guarantees, SBA said. This will “help manufacturers expand facilities, hire workers, and increase production—as part of the Trump Administration’s broader effort to rebuild America’s industrial dominance and strength.”

Earlier on March 27, the SBA said that small businesses involved in food supply chains will be eligible for the ITL program. The ITL’s 90 percent federal guarantee is higher than the 75 percent guarantee offered through SBA’s popular 7(a) loan program.

The loans “will be available to a broad range of producers in the agriculture and logistics industries, to expand food production and supply—with the aim of reducing grocery costs for consumers,” the agency said.

From The Epoch Times