NASE Lauds Home Office Deduction Simplification Act
Schedule C Filers Would Receive $1,500 Standard Deduction
Washington, D.C., March 20, 2009 -- Business owners who work out of an office in their homes could save an
additional $1,500 on their taxes next year. Legislation introduced by
Congressman Kurt Schrader (D-OR), Chairman of the Finance and Tax
Subcommittee of the House Small Business Committee, and Congressman John M.
McHugh (R- N.Y.) would make it easier for home businesses to deduct office
expenses by offering a $1,500 standard deduction to eligible taxpayers. The
Home Office Deduction Simplification Act (H.R. 1509) would also require
that the amount be indexed for inflation.
"We need to do everything in
our power to make small businesses a central part of our economic recovery,"
said Schrader. "This bill will streamline the tax process that often puts an
undue burden on entrepreneurship. The increased use of the home office deduction
will also allow small businesses to put these savings back into the economy.
That means hiring more workers, expanding their businesses, and helping rebuild
our economy.
Many business owners cite complexity of the criteria to
qualify as too cumbersome to follow; others also cite a fear being audited as
their reason to avoid the deduction. The NASE has advocated for the
simplification of the tax code for many years; three in five micro-business
owners had never utilized the current home office deduction said the option of a
standard deduction would encourage them to take it.
"The ability to
choose a standard deduction would remove the top barriers for home business
owners – being confused by the qualification criteria and being scared they'll
be red-flagged for an audit," said Kristie Darien, executive director of
the NASE legislative office. "Congress has taken an important step with this
legislation that allows qualifying home-based businesses to more easily employ
this tax benefit. Too many sole proprietors have shied away from taking the home
office deduction despite being eligible for it."
The option of a $1,500
standard deduction would not preclude taxpayers currently qualifying for the
home office deduction from continuing to itemize their expenses should they
choose. The Home Office Deduction Simplification Act would simply offer a
taxpayer-friendly way to take the deduction. Additionally, if passed by
Congress, it would significantly minimize the paperwork and time spent on tax
preparation for entrepreneurs managing their business out of their home.
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. |