What Trump’s Working Families Tax Cuts Mean for Independent Businesses in 2026 – and What is Yet to Come
For independent business owners, 2026 is the first full year to see how President Donald Trump's Working Families Tax Cuts, also known as the One Big Beautiful Bill Act, affects taxes, cash flow, and investment decisions.
As 2026 comes to an end, survey data indicates that many independent business owners are experiencing positive effects.
The 2026 Small Business Check Up Survey, conducted by the Small Business & Entrepreneurship Council, shows that 61% of small business owners report positive cash flow because of the law's tax provisions, and 73% expect a positive impact on their business in 2026.
The survey of 539 independent business owners also showed that 92% described the current state of their businesses as stable or growing.
Qualified Business Income Deduction: One of the law's most significant provisions is its permanent expansion of the 20% Qualified Business Income deduction for qualifying pass-through businesses, including sole proprietorships, partnerships, and S corporations. The deduction can allow eligible owners to deduct up to 20% of qualified business income, subject to applicable limitations. This expansion applies starting in the 2026 tax year.
Permanent Depreciation: The law also made 100% bonus depreciation permanent for qualifying property acquired after Jan. 19, 2025. Businesses can deduct the full cost of eligible property in the first year it is placed in service rather than spreading the depreciation deduction over several years. That can be important for businesses purchasing equipment, machinery, and other qualifying property.
Extended Expensing: Section 179 expensing was extended starting in 2025. The maximum amount that could be deducted was raised to $2.5 million and the phase-out threshold to $4 million. The amendments give independent businesses making major investments greater flexibility in deciding both when and how to make their capital purchases.
The independent business community also indicates that investment will continue. According to a survey carried out in 2026 by U.S. Bank of 1,000 independent business owners, 91% of them planned to carry out at least one action aimed at growth in the coming year.
It also discovered that 60% intended to hire more employees, while 56% intended to put in more capital.
However, the tax changes are not yet complete.
Opportunity Zoning: A new permanent Qualified Opportunity Zone program is set to start on Jan. 1, 2027. States are currently choosing their new qualifying areas, and the Treasury and the IRS are preparing guidance and designations of specific zone locations for the new program.
The impact of the law will vary from business to business. Factors including business structure, income, investments, and eligibility requirements will determine which provisions apply.
For independent businesses, Trump's OBBBA offers several tools which will help owners to keep more capital within their businesses and use it for growth. The alterations make it easier for business owners to reinvest in equipment, staff, and expansion.
That flexibility matters. When an independent business has more cash available to invest, the entire community becomes stronger as a result.
More information about the Working Families Tax Cuts Act is available on the U.S. Small Business Administration website.