A new report from Sen. Ron Wyden, D-Ore., the ranking Democrat on the Senate Finance Committee, discusses how small businesses will face more uncertainty and complexity from the Republican tax law and will ultimately need help from their accountants to figure out the pass-through deduction.
The report, “
“Republicans claim to want less government intervention, but with their new tax law they picked winners and losers—architects are in, accountants are out; engineers made the cut, doctors did not—leaving business owners wondering whether or not they were blacklisted,” said Wyden. “What good is a deduction if money spent in annual fees to your accountant far exceed the tax break? Main Street job creators will be lucky if they figure out how to calculate their deduction any time soon.”
The report notes that the text of the pass-through deduction spans nine pages, cross-references more than 20 other sections of the tax code, and directs the Treasury Department to issue volumes of new regulations. It also cites a recent letter from the AICPA asking for more guidance about the provision: “And if there is any question whether the new law and regulations will add additional burden to small business owners, just look to the
Wyden’s report quoted the founder of an IT consulting business in Washington D.C., who has been telling his colleagues and friends in the small business community to “speak to their accountants because there is no way to make any sense of how the law will impact folks.”
Wyden pointed to a separate
The poll surveyed 385 small business owners in the election battleground states of Arizona, Tennessee, Maine and Nevada, and skewed more Republican than Democratic, with 41 percent of respondents identifying as Republican, 31 percent as Democrat and 28 percent as independent or other.
The majority of respondents opposed the fact that the corporate tax cuts were made permanent while cuts for pass-through businesses were on temporary, with 58 percent saying they oppose eventually ending tax cuts for pass-throughs like S-corps, LLCs and proprietorships in 2025 while making corporate tax cuts permanent, while only 34 percent saying they support it. That response was understandable, as 86 percent of the respondents identified as being pass-through businesses such as S corporation, LLCs, sole proprietorships or partnership, while only 5 percent of the respondents said their business was organized as a C corporation.