DEDUCTION

Business expenses come with the territory when you are an entrepreneur. Some expenses, however, can be easy to miss come tax time because they do not show up in your business checkbook.

Congress is coming out ahead of this month’s payroll tax extension, currently set to expire at the end of February. Senate and House conference committee members have agreed to a 10-month extension of the payroll tax deduction.

“Tax incentives for startups and for businesses that have recently purchased new equipment are certainly a start, but we are concerned that so few of the policies suggested actually apply to the largest segment of small businesses – the self-employed and micro-businesses. That key demographic makes up more than 78% of the nation’s small business population,” commented NASE President Kristie L. Arslan.

The 2010 deduction will put about 15 percent of the premium back in the pocket of the self-employed, said Kristie Arslan, executive director of the National Association for Self-Employed.

New legislation could help self-employed business owners who work from a home office save an additional $1,500 on their taxes next year.

The nation's 9 million self-employed—sole proprietors with few or no employees, contract workers, and freelancers—constitute about 8% of the total U.S. labor force, according to the Bureau of Labor Statistics. (The Census Bureau counts 22 million sole-proprietors, but it's not clear how many of those may be payroll workers as well.) "You correct this, think of the widespread health benefit you would give to so many people," says Kristie Arslan, executive director of the lobbying group National Association for the Self-Employed (NASE), which represents the self-employed in Washington.