Streamlines income tax process for entrepreneurs
May 08 2015
WASHINGTON – As part of their support for National Small Business Week, U.S. Senators John Boozman and Tom Udall (D-N.M.) along with U.S. Representative Michelle Lujan Grisham (D-N.M.), announced legislation to help business owners who operate primarily out of their homes deal with the often-complicated process of filing income taxes. The bipartisan Helping Our Middle Class Entrepreneurs (HOME) Act is the result of conversations with small business owners about ways the federal government can reduce unnecessary red tape.
The HOME Act would make permanent a standard home office deduction that allows business owners with home offices to take an optional deduction of $1,500 instead of weeding through burdensome paperwork. Without this legislation, the IRS could revert back to a system that forced many small business owners to struggle to calculate expenses, depreciation and carryovers on their homes. According to the National Federation of Independent Business, about a quarter of small businesses nationwide are based in the home, and fewer than half take the home office deduction because it is so complex.
“As we celebrate National Small Business Week, it’s important to remember the contributions small businesses make to our economic well-being. They are the backbone of our economy,” Boozman said. “This bill is a step in the right direction to reducing the regulatory burden on small businesses and giving these job creators the predictability to boost growth and development. Creating an environment that encourages innovation, ingenuity and the entrepreneurial spirit is important to improving the economy.”
“New Mexico is home to more than 150,000 small business owners who drive our economy, and I’m committed to doing everything I can do help them succeed,” Udall said. “Small Business Week is a chance to celebrate their contributions to our state, which makes it the perfect time to announce this bipartisan legislation. The HOME Act is a common-sense bill that will cut red tape and empower many entrepreneurs in New Mexico and across the country to grow their businesses and create good-paying jobs.”
“As someone who has run a business, I understand the unique challenges facing the individuals and companies who make up the backbone of our economy,” Lujan Grisham said. “Our tax code should support small businesses and entrepreneurs, not penalize them. That’s why I’m proud to introduce the HOME Act in the House of Representatives and that’s why I’ll continue working to make it easier for small businesses to succeed, grow and create New Mexico jobs.”
In 2013, the IRS created a temporary standard home office deduction. It estimates that the change will reduce the paperwork burden on small businesses by 1.6 million hours annually. The HOME Act will make the home office deduction permanent, saving time and making sure taxpayers get the refunds they deserve.
The HOME Act is supported by the National Federation of Independent Business.