Senate Introduces Home Office Deduction Bill
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 to assist our nation’s home-based businesses during these difficult economic times.”
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 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.
President Obama Pushes Consumer Protection
President Barack Obama spoke at the White House recently to continue to bolster the financial and regulatory reform of Wall Street that he proposed earlier this year. In particular, the president spoke about the Consumer Financial Protection Agency:
"This agency will have the power to make certain that consumers get information that is clear and concise -- in plain language -- so they can compare products and know exactly what they're getting themselves into. It will ensure that banks and other firms can't hide behind these ridiculously confusing contracts -- pages and pages of fine print that nobody can figure out. It will have the ability to enforce and build on the credit card reforms we passed earlier this year, so that consumers aren't hit with unfair rate hikes and penalties, or hidden charges. It will require brokers to look out for the interests of families if they give advice about mortgages. And it will ensure transparency and fair dealing for other financial products, like bank overdraft services and payday loans."
View the president's full remarks here
Legislative Alert: SBA Capital Access Programs
With concerns that small businesses are still having trouble getting the funds that they need, the House Committee on Small Business, Subcommittee on Tax and Finance met to discuss possible legislation to aid the situation. Those bills included the following measures regarding Small Business Administration (SBA) programs:
- H.R. 3723: “The Small Business Credit Expansion and Loan Markets Stabilization Act of 2009” (Rep. Halvorson D-Ill.)
- H.R. 3739: “The Job Creation and Economic Development Through CDC Modernization Act of 2009” (Rep. Buchanan R-Fla.)
- H.R. 3737: “Small Business Microlending Expansion Act of 2009” (Rep. Ellsworth D-Ind.)
- H.R. 3740: “The Small Business Investment Company Modernization and Improvement Act of 2009” (Rep. Luetkemeyer R-Mo.)
- H.R. 3722: “The Enhanced New Markets and Expanded Investment in Renewable Energy for Small Manufacturers Act of 2009” (Rep. Kirkpatrick D-Ariz.)
- H.R. 3014: “The Small Business Health Information Technology Financing Act” (Rep. Dahlkemper D-Pa.)
- H.R. 3738: “The Small Business Early Stage Investment Act of 2009” (Rep. Nye D-Va.)
- H.R. 3743: “The Small Business Disaster Readiness and Reform Act of 2009” (Rep. Griffith D-Ala.)
Find details on the legislation at the Library of Congress
Small Biz Health Care Roundup
Here's a sampling of this week's top health care reform articles. If you find an article or blog that you think should be considered, drop us a line at email@example.com.
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Washington Watch Online
Visit NASE Advocacy to view archived editions of Washington Watch. While you’re there, read the latest updates from the Washington, D.C. office, write your Congressperson, and find out how you can join the fight for micro-business.