Washington Watch - April 15, 2009

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Washington Watch - April 15, 2009

It’s April 15th, Time To Get Ready For Your Next Filing Date
Whether you file your micro-business return annually or quarterly, resist the urge to hide your tax documents in a drawer until your next filing date. NASE National Tax Advisor Keith Hall has these suggestions to help you get a jump on next year’s taxes:
  • Use the 2008 tax return as a road map for 2009 by studying what deductions you may have neglected, such as the home office deduction. Sole proprietors can use the NASE’s Schedule C Planning Tool to help them stay organized.

  • If you have a traditional IRA or SEP retirement account, consider making a contribution earlier in the year than you typically might. Then, watch as those dollars grow, tax-free.

  • Getting your child involved in the family business can really pay off. Your son or daughter could help clean the office, file, sort inventory, etc. Wages you pay will be tax deductible to your business and your child might learn something in the process. Look at it as a new business deduction on money that you are probably giving your child anyway!

In addition to tax.NASE.org, here are some great sites that will keep you informed throughout the year.


Office of Congressional Ethics Has Begun Investigations

A little over a year after House Democratic leaders created the Office of Congressional Ethics, the panel appears to have begun investigative work, including a probe into possible contacts between associates of Rep. Jesse L. Jackson Jr. (D-Ill.) and former Illinois Gov. Rod R. Blagojevich over naming Jackson to Barack Obama’s old Senate seat. News of Jackson’s investigation did not come from the ethics office, as it is bound by secrecy rules, but Jackson confirmed the probe after it was leaked to the press and maintained he has done nothing wrong.

The House formed the office to increase transparency of the ethics process, which had previously been under the sole purview of the House Committee of Standards of Official Conduct. Criticisms of House ethics probes included the tendency of investigations to last for many years and the lax punishment often doled out by the committee.

The Office of Congressional Ethics is overseen by a board of eight members – with appointments split between House Democratic and Republican leadership – not currently in Congress, although some board members served in the House in the past. The office is governed by strict confidentiality rules, but plans to publish quarterly reports of the number of cases it is investigating.

Unlike the House ethics committee, the office can begin investigations based on referrals from outside groups and individuals or from media reports. While the House ethics committee does not face any time limit on investigations, the ethics office has less than 90 days to complete its two-step investigation process. At the conclusion of an investigation, the office presents its findings to the House ethics committee, which has the sole authority to recommend any punishment to the full House.


NASE Lauds Federal Effort To Combat Tax Inequity, Health Coverage Availability
It is no secret that the self-employed have long made up a substantial number of the working uninsured. Federal legislation introduced by Sen. Jeff Bingaman (D-N.M.) and Sen. Orrin Hatch (R-Utah) would help change that by eliminating a tax inequity for sole proprietors.

The Equity for Our Nation’s Self-Employed Act (S.725) would change the tax code to allow sole proprietors to deduct health insurance costs as a business expense, something they are unable to do currently. Sole proprietors are also unable to forego payroll (FICA) taxes on these expenses. In March, House Members introduced a companion bill (H.R. 1470) of the same name.

“Currently, self-employed individuals are the only segment of the business population who are taxed on their purchase of health insurance,” Sen. Bingaman said. “This bill would bring us one step closer to addressing our nation’s growing uninsured problem.”

The elimination of the self employment tax on health costs has been an NASE legislative priority for many years. Nearly 46 million Americans have no health insurance, with 60 percent of uninsured Americans representing owners, employees or dependents of those working in small business.

“It is time that sole proprietors are given the tax relief big businesses have enjoyed for years,” said NASE President Robert Hughes.

Washington Watch - April 15, 2009

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