Earlier this week, the Internal Revenue Service (IRS) announced a new simplified option that many owners of home-based businesses and some home-based workers will be able to use to calculate their home office tax deduction. The new option allows qualified taxpayers to deduct annually $5 per square foot of home office space on up to 300 square feet, for as much as $1,500 in deductions and builds on the President’s commitment to streamline and simplify the tax code for small businesses and to reduce theburden for tax compliance.
People around the country are voicing their support for this change and how it will benefit small businesses. Here are just a few quotes:
“This is terrific news for the 52 percent of all small business that work from home, who fight every day to meet their bottom lines while continuing to contribute to the economy,” said Kristie Arslan, President and CEO of the National Association for the Self-Employed. “The previous calculation for the deduction was cumbersome and time consuming for America’s smallest business and year after year hard-earned dollars were left on the table.” (Dallas Morning News)
Chris Whitcomb, tax counsel for the National Federation of Independent Business… called the announcement a "step in the right direction," adding that his organization has "always supported methods to simplify the home office deduction, which can be very complicated to calculate." (Tax Notes)
“This is as good an option for a standard (home office) deduction as we possibly could have hoped for,” says Keith Hall, the [National Association for the Self-Employed] national tax adviser. (San Francisco Chronicle)
"This will make life easier for the IRS and the majority of taxpayers who claim this deduction," said John Lieberman, CPA at Perelson Weiner LLP. (CNN Money)
The new simplified option is available starting with the 2013 return most taxpayers file early in 2014. Further details on the new option can be found in Revenue Procedure 2013-13, posted this week on IRS.gov and in a Treasury Notes blog written by Deputy Secretary Neal S. Wolin and Administrator of the Small Business Administration Karen G. Mills.