Big ‘I’ Participates in 199A Roundtable Discussion – IA Magazine

When tax policy sounds like alphabet soup, most people politely nod, refill their coffee, and hope someone changes the subject. But for independent insurance agencies, Section 199A is not a dusty line in the tax code. It is a real-world business tool that can affect hiring, technology upgrades, succession planning, community service, and the simple ability to keep a Main Street agency competitive.

That is why the Big “I,” formally known as the Independent Insurance Agents & Brokers of America, participated in a 199A roundtable discussion highlighted by IA Magazine. The conversation centered on a question that matters deeply to thousands of independent agencies: Should the qualified business income deduction remain available to pass-through businesses that form the backbone of local economies?

The discussion took place at a crucial moment. At the time, Section 199A was scheduled to expire after 2025, creating uncertainty for small businesses organized as S corporations, partnerships, LLCs, and sole proprietorships. Since many independent insurance agencies operate as pass-through entities, the possible expiration of the deduction was not merely a Washington issue. It was a payroll issue, a client-service issue, and, for some family-owned agencies, a future-of-the-business issue.

What Was the 199A Roundtable About?

The roundtable brought together lawmakers, small business voices, and industry representatives to discuss how the Section 199A deduction has affected Main Street businesses. The Big “I” stood out because it represented independent insurance agentsprofessionals who often serve as both risk advisors and small business owners themselves.

In practical terms, the event was about translating tax language into everyday business reality. Instead of debating policy in the abstract, participants discussed how the deduction helps agencies invest in people, tools, training, and local relationships. That matters because independent agencies are not giant corporate towers floating above the clouds. They are often family-owned or locally rooted businesses where the owner may be reviewing renewal quotes in the morning, coaching a producer at lunch, and sponsoring the high school baseball team by dinner.

Understanding Section 199A in Plain English

Section 199A, often called the qualified business income deduction or QBI deduction, allows many eligible pass-through business owners to deduct up to 20% of qualified business income. A pass-through business does not pay federal income tax the same way a C corporation does. Instead, business income generally “passes through” to the owner’s personal tax return.

That structure is common among independent insurance agencies. An agency may be organized as an S corporation, a partnership, an LLC taxed as a partnership, or a sole proprietorship. For eligible owners, the 199A deduction can reduce taxable income and free up cash for business needs. It does not magically turn tax season into a spa day, but it can make the numbers less painful.

Why Insurance Agencies Care So Much

Independent insurance agencies compete in a market filled with national carriers, direct-to-consumer platforms, insurtech startups, banks, captive agents, and large brokerage rollups. That competition is not theoretical. It shows up in marketing costs, producer compensation, management systems, cybersecurity expenses, and the constant need to deliver faster service without losing the human touch.

For agencies that qualify, the 199A deduction can help create room in the budget. An owner might use the savings to hire a commercial lines account manager, upgrade an agency management system, improve customer portals, train young agents, or expand cyber liability expertise. In a small agency, even a modest tax difference can help decide whether an investment happens this year or gets pushed into the mysterious land of “maybe next quarter.”

The Big “I” and Its Role in the Conversation

The Big “I” has long advocated for independent agencies on federal policy issues, including tax, crop insurance, flood insurance, agent licensing, data privacy, and small business regulation. Its participation in the 199A roundtable signaled that independent agents want a seat at the table when tax rules affecting Main Street businesses are being shaped.

According to the original IA Magazine report, Sarah Brown, president and CEO of Keller-Brown Insurance Services in Shrewsbury, Pennsylvania, hosted lawmakers at her agency. That detail matters. A 199A discussion held inside a local insurance agency creates a very different picture than a hearing room full of microphones and marble. It shows policymakers the desks, people, workflows, and community relationships behind the tax return.

Keller-Brown’s long family ownership also gave the discussion a powerful backdrop. Independent agencies often think in decades, not quarters. A tax rule that improves cash flow today can influence whether the next generation can join the business, whether an agency can stay independent, or whether it has to sell sooner than planned.

Why the Main Street Tax Certainty Act Mattered

One major policy idea connected to the roundtable was the Main Street Tax Certainty Act, legislation designed to make the 20% small business deduction permanent. Supporters argued that pass-through businesses needed certainty because long-term planning becomes difficult when a major deduction is set to disappear.

Imagine an agency owner considering whether to hire two new employees, buy a book of business, or open a second location. If the owner knows the tax environment will change dramatically in 18 months, caution naturally creeps into the conversation. Business owners are brave, but they are not fortune tellers with calculators.

Tax certainty can support better planning. Agencies can model future cash flow, evaluate acquisitions, invest in technology, and make compensation decisions with more confidence. That does not mean every agency will grow overnight. It means owners can make decisions based on strategy rather than suspense.

How 199A Supports Independent Insurance Agents

The independent agency system depends on local ownership, carrier choice, and personalized advice. Unlike a captive model, independent agents can often compare coverage options from multiple insurance companies. That flexibility benefits consumers, but it also requires agencies to maintain strong operations, licensing, education, carrier relationships, and compliance systems.

1. Hiring and Retaining Talent

The insurance industry has a talent challenge. Many experienced professionals are approaching retirement, while younger workers may not immediately think, “Insurance agency career? That sounds thrilling!” Agencies must compete for account managers, producers, service representatives, and operations leaders. Tax savings from 199A can help fund better salaries, benefits, training, or internship programs.

2. Investing in Technology

Modern agencies need more than a phone, a filing cabinet, and a heroic memory. They need agency management systems, comparative raters, e-signature tools, cybersecurity protection, customer relationship management software, marketing automation, and data analytics. Those tools are not cheap. A stable deduction can give agency owners more flexibility to modernize without sacrificing service quality.

3. Strengthening Client Service

Independent agents advise clients through messy real-life scenarios: a teenager getting a first car, a contractor adding employees, a restaurant expanding outdoor dining, or a family buying a home in a flood-prone area. When agencies have resources to train staff and improve workflows, clients often receive faster, clearer, and more thoughtful service.

4. Supporting Local Communities

Many independent agencies are deeply woven into their towns. They sponsor events, support nonprofits, serve on boards, mentor young professionals, and help local businesses understand risk. When tax policy supports local agencies, the benefits can extend beyond the agency’s balance sheet.

Why Pass-Through Businesses Needed a Level Playing Field

The 2017 Tax Cuts and Jobs Act reduced the corporate tax rate for C corporations. Section 199A was created partly to help pass-through businesses remain competitive in that new tax environment. Without a deduction like 199A, many small businesses could face a higher effective tax burden than larger corporate competitors.

That issue is especially relevant for independent agencies. A local agency may compete against national firms with larger budgets, centralized technology, and broad marketing reach. If pass-through agencies face less favorable tax treatment, they may have fewer resources to compete, hire, and serve clients. The result could be more consolidation and fewer locally owned options for consumers.

Important 199A Details for Insurance Agency Owners

While the concept sounds simplededuct up to 20% of qualified business incomethe rules can get complicated. Income thresholds, W-2 wage limitations, qualified property rules, and business classification issues can all affect the deduction. In other words, 199A is friendly, but it still brings a suitcase full of tax forms.

A key issue for insurance professionals has been whether insurance agencies are treated as specified service trades or businesses. Under IRS guidance, insurance agents and brokers are generally not treated the same as certain specified service fields for this purpose, which has helped many agency owners access the deduction more fully. That distinction has been extremely important for the independent agency channel.

Still, agency owners should not rely on guesswork. Entity structure, owner compensation, taxable income, and other deductions can change the calculation. A CPA or tax advisor who understands insurance agencies can help owners use the deduction correctly and plan responsibly.

What Changed After the Original IA Magazine Discussion?

The IA Magazine article captured the urgency of the 2024 debate, when 199A was scheduled to expire after 2025. Since then, federal tax legislation has changed the outlook by preserving the small business deduction. That development makes the roundtable even more meaningful in hindsight because it shows how industry advocacy, small business testimony, and lawmaker engagement can influence major policy outcomes.

For independent agents, the broader lesson is simple: Showing up matters. When policymakers hear directly from local business owners, the conversation becomes less about abstract revenue estimates and more about jobs, customers, family ownership, and community stability.

Specific Example: How 199A Can Affect an Agency Budget

Consider a hypothetical independent agency organized as an S corporation. The agency has qualified business income after expenses and is planning its next year. The owner wants to upgrade cybersecurity, hire a personal lines service representative, and launch a local marketing campaign focused on homeowners and small commercial clients.

If the agency owner qualifies for the 199A deduction, the resulting tax savings may not pay for everything. However, it can become part of a larger capital plan. The owner may decide to move forward with the cybersecurity upgrade immediately, bring on part-time support, or fund producer training. The deduction becomes more than a tax line. It becomes fuel for operational decisions.

Now multiply that scenario across thousands of independent agencies. The total effect can influence hiring, innovation, competition, and client service across the insurance marketplace.

Why Advocacy Is Not Just for Lobbyists

One valuable lesson from the Big “I” 199A roundtable is that advocacy is strongest when real business owners participate. Trade associations can open doors, organize meetings, and explain policy. But personal stories from agency owners make the issue memorable.

A lawmaker may hear “qualified business income deduction” and think of spreadsheets. But when an agency owner says, “This deduction helped us hire a young account manager who now serves 600 local families,” the policy becomes human. That is the difference between a tax provision and a story worth remembering.

What Independent Agencies Should Do Next

Even with 199A preserved, agency owners should remain proactive. Tax law can change, and business planning should never be placed on autopilot. Agencies should review their entity structure, compensation strategy, succession plans, and reinvestment priorities with qualified advisors.

Owners should also document how tax savings are used. If 199A helps fund a hire, technology investment, producer training program, or community initiative, that story may be useful for future advocacy. Policymakers need examples, not just percentages.

Experience Section: Lessons From the 199A Conversation for Agency Owners

One practical experience related to the Big “I” 199A roundtable is the realization that tax policy feels distant until it touches the agency’s Monday morning decisions. Many agency owners do not wake up excited to discuss federal tax code sections. They wake up thinking about renewals, carrier appetites, remarketing accounts, certificates, claims questions, hiring headaches, and whether the printer has chosen violence again. But when a deduction like 199A affects available cash, it becomes part of the agency’s operating rhythm.

In conversations with small business owners, the same theme appears again and again: certainty matters. An agency owner may be willing to invest aggressively when the rules are stable. But when tax provisions are temporary, every major decision carries extra hesitation. Should the agency hire now or wait? Should it buy another book of business? Should it spend money on automation? Should it bring in a family successor sooner? These are not academic questions. They shape the future of local insurance distribution.

The Big “I” roundtable also shows the value of inviting lawmakers into real workplaces. A local agency office tells a story that a policy memo cannot. There are team members answering client calls, producers preparing proposals, certificates being issued, and owners juggling payroll, rent, carrier meetings, and compliance. When lawmakers see that environment, they can better understand why a tax deduction may influence whether a business grows, stalls, or sells.

Another experience worth highlighting is the importance of preparation. Agency owners who want to speak effectively about 199A should avoid vague statements such as “taxes are too high.” A stronger message is specific: “The deduction helped us add a commercial lines account manager,” or “It allowed us to invest in cybersecurity,” or “It helped us keep our agency locally owned during a difficult market.” Specific examples turn advocacy into evidence.

There is also a client-facing lesson. Independent agents advise business owners every day, many of whom also operate pass-through entities. While agents should not give tax advice unless qualified, they can understand the pressures their clients face. A contractor, restaurant owner, retailer, consultant, or farm operator may be making similar decisions about hiring, equipment, and expansion. Understanding 199A helps agents speak the language of small business risk more fluently.

Finally, the roundtable reminds the insurance industry that advocacy is a long game. One meeting rarely changes everything overnight. But repeated education, credible examples, and strong relationships can shape outcomes over time. The Big “I” participating in the discussion was not just a photo opportunity. It was part of a broader effort to make sure independent agencies are not invisible when Congress debates small business policy.

Conclusion

The Big “I” participation in the 199A roundtable discussion highlighted a major truth about independent insurance agencies: they are small businesses serving other small businesses. Section 199A has helped many pass-through agency owners reinvest in staff, technology, client service, and community engagement. The original debate focused on preventing the deduction from expiring, but the larger lesson remains relevant even after later tax legislation preserved it.

For independent agents, the 199A story is about more than tax savings. It is about keeping local agencies competitive, preserving family-owned businesses, and ensuring that Main Street has a voice when federal policy is written. Tax code may not be glamorous, but when it helps an agency hire, grow, and serve clients better, it deserves more than a bored shrug. It deserves a seat at the tableand thanks to the Big “I,” independent agents had one.

Note: This article is for educational and editorial publishing purposes only. It is not tax, legal, or accounting advice. Agency owners should consult a qualified tax professional before making decisions related to Section 199A, entity structure, or business tax planning.