WASHINGTON - Today, U.S. Senators Tom Udall (D-N.M.) and John Boozman (R-Ark.), and U.S. Representative Michelle Lujan Grisham (D-N.M.) announced that they are introducing a measure to simplify the process of filing income taxes for business owners who run their businesses from their home. The bipartisan bill, Helping Our Middle Class Entrepreneurs (HOME) Act was in direct response to conversations with small business owners about how the federal government can reduce unnecessary red tape and support business growth.
The HOME Act gives business owners who operate primarily from their homes the option to take a standard home office deduction of $1,500 rather than filing the often complicated paperwork that accompanies working from home. The legislation makes this standard permanent to provide certainty and ensure that the IRS cannot revert back to requiring small business owners to calculate depreciation and carryovers on their homes that often impedes small business owners from taking the home office deduction. According to the Small Business Administration and the National Federation of Independent Business, 50 percent of all firms and 60 percent of self-employed entrepreneurs are home-based and fewer than half take the home office deduction because it is so complex.
"We have over 150,000 small businesses in New Mexico that play an integral role in driving our economy. The federal government should be doing everything it can to make it easier for entrepreneurs to succeed, not making it more difficult for them to file for their hard earned tax returns," Udall said. "The HOME Act is a common-sense, bipartisan bill that rolls back some of the red tape that creates burdensome paperwork for business owners throughout New Mexico and the nation, enabling them to focus on growing their businesses, creating good jobs and stimulating our economy."
"Small businesses are the backbone of our economy. We can support these job creators by reducing the regulatory burden they face and delivering predictability for them to plan for future growth and success," Boozman said.
"Today, more and more small business owners' primary place of business is their home," said Lujan Grisham. "However, few business owners take a home office deduction because the filing process is so complex. I am proud to introduce the HOME Act which will fix this problem so that New Mexico small business owners can focus on growing their businesses, creating jobs and strengthening our economy."
The IRS created a temporary standard home office deduction in 2013 and the HOME Act will make this home office deduction permanent. The IRS estimates that the change will reduce the paperwork burden on small businesses by over a million hours annually, saving time and making sure hard-working taxpayers get the refunds they deserve.
