Currently, Entrepreneurs Can Only Write Off $5,000 In Costs When Starting A New Business. New Legislation Would Increase Tax Deduction To $50,000
A Recent Survey Found That Small Business Owners Spend An Average Of $40,000 To Get Their Businesses Off The Ground
May 27, 2025
WASHINGTON, DC – During National Small Business Month, U.S. Senator Angela Alsobrooks (D-Md.) joined a group of senators in introducing the Tax Relief for New Businesses Act, legislation to provide tax relief to entrepreneurs looking to start a small business and reduce barriers for startups. The bill would increase the startup tax deduction from $5,000 to $50,000, and allow businesses to write off more expenses to compensate for the increasing cost of starting a business. Currently, small business owners can only deduct up to $5,000 in startup costs in the first year, yet a recent survey found that they spend an average of $40,000 to get their businesses off the ground.
“Small businesses are the backbone of the middle class, the backbone of Maryland, and the backbone of our country. With skyrocketing costs and the threat of tariffs under this Administration – we need to be doing everything in our power to support our small businesses and ensure they can thrive. Economic prosperity is not about just getting by – it’s about thriving and living beyond our wildest dreams. I am fighting for all Marylanders to live beyond their wildest dreams, and this tax cut for small businesses is an important step towards paving that path,” said Senator Alsobrooks.
There are over 600,000 small businesses in Maryland, making up 99.5 percent of Maryland businesses. Maryland’s small businesses employ 1.2 million people.
“We know that upfront costs are one of the biggest challenges that prevent entrepreneurs from starting a new business. That’s why I’m introducing this commonsense legislation to increase the startup tax deduction from $5,000 to $50,000,” said Senator Rosen. “Especially now, at a time of increased economic hardship and uncertainty, this commonsense legislation will help entrepreneurs in Nevada and across our nation pursue their dream of starting a business.”
“Small businesses are the lifeblood of the Granite State’s economy, but it’s getting more costly and difficult for local entrepreneurs to open up shop,” said Senator Shaheen. “Our commonsense Tax Relief for New Businesses Act would give entrepreneurs a helping hand up so they can succeed and fuel job growth.”
“Small businesses and the Wisconsinites behind them are the backbones of our local communities and our economy. For too many entrepreneurs, starting a business is too expensive and out of reach, and it’s our job to break down the barriers in their way so more Americans can pursue their dreams,” said Senator Baldwin. “Our tax code should incentivize entrepreneurs and support small businesses – not rig the system for the biggest corporations, like Republicans are trying to do. Our legislation is a commonsense step that will unlock opportunities for Wisconsin’s next generation of small businesses and help ensure they can grow, innovate, and shape the future of the Badger state.”
The Tax Relief for New Businesses Act is sponsored by Senator Jacky Rosen (D-Nev.), Senator Jeanne Shaheen (D-N.H.), and Senator Tammy Baldwin (D-Wis.) and is co-sponsored by Senators Chris Coons (D-Del.), Elissa Slotkin (D-Mich.), Ron Wyden (D-Ore.), Richard Blumenthal (D-Conn.), Ruben Gallego (D-Ariz.), Amy Klobuchar (D-Minn.), and Martin Heinrich (D-N.M.).
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