New Survey on Taxes and Small Business: Complexity is Major Problem

WASHINGTON, Feb. 26, 2025 /PRNewswire/ -- NSBA released today the 2025 Small Business Taxation Survey, which shows the significant impact federal taxes have on America's smallest businesses. The major take-away: expiration of the 2017 Tax Cuts and Jobs Act tax cuts will be a significant issue for the overwhelming majority of small businesses.

"Given that the majority of small-business owners pay business taxes at the personal income level—83 percent are pass-through entities—it's no wonder small businesses are very concerned about potential and significant tax hikes if Congress fails to address the expiring tax cuts," stated NSBA President and CEO Todd McCracken.

Among some of the key findings of the survey:

• The majority of small-business owners spend more than 20 hours per year dealing with federal taxes, even though the vast majority pay an external tax practitioner to handle their taxes.
• Ninety percent of small-business owners say federal taxes have some impact on the day-to-day operations of their businesses, one-in-three cite a significant impact.
• Among the small businesses that directly outsource goods from outside the U.S., the vast majority identified China as a country they purchase from.
• More than half of small-business owners say that finding needed information directly from the IRS is difficult.
• By far, the largest burden facing small businesses when it comes to federal taxes: administration & complexity, NOT the financial cost.

For years, NSBA has been warning policymakers about the challenges posed by various sunsetting laws and how those create additional hardships that fall squarely on the shoulders of small business. Today, that fear is front-and-center as Congress must address the expiration of various small-business tax cuts including the 199A Qualified Business Income Deduction—top priorities as voted on at NSBA's recent Small Business Congress.

"As Congress embarks on any tax extender or tax reform discussion, it is imperative that small businesses are afforded tax stability, predictability, and permanency, not to mention parity with larger businesses," stated NSBA Board Chair Michael Canty, of Alloy Precision Technologies in Cleveland, Ohio.

Click here to download the full survey.

Celebrating more than 85 years in operation, NSBA is a staunchly nonpartisan organization advocating on behalf of America's entrepreneurs. NSBA's 65,000 members represent every state and every industry in the U.S. Please visit www.nsba.biz or follow us at @NSBAAdvocate.

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SOURCE National Small Business Association