A simpler home office deduction
A bill circulating through Congress aims to ease the process of writing off expenses for a home office.
(Fortune Small Business) -- Nearly half of American firms are home-based businesses. But according to a National Federation of Independent Business survey, only 46% of them take a home office tax credit.
Why are they balking? The deduction process -- which involves measuring the office as a percentage of home size and multiplying relevant expenses by that fraction -- is just too complicated, the survey found.
To ease the process, Reps. John McHugh, R-N.Y., and Kurt Schrader, D-Ore., introduced the Home Office Deduction Simplification Act last spring. The bill would create a standard $1,500 deduction, which owners could opt for over the messier version. It would translate into a tax savings of about $500 for those who aren't currently taking the deduction, says Keith Hall, tax adviser for the National Association for the Self-Employed.
Similar bills have died in Congress before, but there's hope this time around: Twenty-eight representatives -- twice as many as last year -- are cosponsoring the current version.click here.