National Association for the Self-Employed – Business Benefits, Educational Resources and Access to Health Insurance for Small Businesses and Startups > Senate Introduces Home Office Deduction Bill

Washington, D.C., October 9, 2009 – The majority of micro-businesses are operated out of a home office, yet the home office deduction has become wrapped in enough regulatory red tape to turn those business owners away from the tax benefit. New legislation could help home-based businesses save nearly $1,500 on their taxes next year. The National Association for the Self-Employed (NASE) is proud to support the Home Office Tax Deduction Simplification Act (S. 1754), a bill that was introduced by Sen. Barbara Boxer (D-Calif.) this week. Sens. Jeff Merkley (D-Ore.), Joe Lieberman (IND-Conn.) and Evan Bayh (D-Ind.) also lent their support to this bill.

“We are proud to see that both the House and Senate have taken a stand on this important issue,” said Kristie Arslan, executive director of the NASE legislative office. “Hopefully, there will be movement on this bill this year to assist our nation’s home-based businesses.”

Business owners often report that the qualification criteria for the deduction is too difficult to navigate, while others fear that taking the deduction will trigger an audit. The legislation would allow business owners the option of a $1,500 standard deduction, but would not disqualify taxpayers currently eligible for the home office deduction from continuing to itemize their expenses. Rather, it offers a taxpayer-friendly way to take the deduction. If passed by Congress, the bill would significantly minimize the time and paperwork needed for tax preparation for these tiny businesses. The bill would also require that the amount of the standard deduction be indexed for inflation.

“Small businesses are critical to the American economy, and this legislation will help them thrive,” said Sen. Boxer, “This bill cuts the red tape that prevents many small businesses from claiming this tax deduction. By making it easier to claim the deduction, more small businesses can invest these funds to expand and create much-needed jobs.”

In September, Rep. Kurt Schrader (D-Ore.) introduced similar legislation in the House of Representatives. For more information, see “Legislators Take On Home Office Deduction.”

For statistics on entrepreneurs and the home office deduction, view the results of this 2008 NASE poll.

About the NASE
The National Association for the Self-Employed (NASE) is the nation's leading resource for the self-employed and micro-businesses, bringing a broad range of benefits to help entrepreneurs succeed and to drive the continued growth of this vital segment of the American economy. The NASE is a 501(c) (6) nonprofit organization and provides big-business advantages to hundreds of thousands of micro-businesses across the United States. For more information, visit the association's Web site at www.nase.org.

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