Posted by Keith Hall (NASE National Tax Advisor) - My wife and I ventured out in the snow to watch Lincoln this weekend and really enjoyed the movie. If you haven’t had a chance to see it yet, don’t wait another week. It is awesome. I left the movie saying, “That is what makes our country great. Leadership! And getting things done!” With the fiscal cliff debate, the debt ceiling, Congressional bickering and indecision, it is easy to long for a better time. But today, my optimism has been restored. Well, restored at least as far as my Home Office. Along with the Dept of the Treasury and the SBA, the IRS announced today a new and easier way for small business owners to claim the Home Office Deduction for 2013 and beyond. The proposal would replace a complicated form with 43 lines of calculations, 4 pages of instructions and a 28 page booklet of ‘How To’s’ with a simple $5 per square foot standard amount. Up to 300 square feet and at $5 per square foot, the small business owner can now calculate their $1,500 tax deduction in the matter of a few seconds. In fact, we just did the full calculation in that last sentence.
We here at the NASE have long pushed for tax code simplification and a level playing field for small and micro business owners. This is what we were talking about. You will still need to use the Home Office space regularly and exclusively for business and the deduction may be limited to the net income from that business, but this new approach will save millions of small business hours and who knows how many bottles of Advil in claiming a well deserved deduction. So, let me take a moment to say thank you to the Treasury Department, IRS, and the Small Business Administration for its commitment to small business. I think even Mr. Lincoln would be pleased.