NFIB

Home Businesses Need Simplified Recordkeeping, Standard Home Office Deduction

Business location currently complicates common tax deductions. Home-based businesses incur expenses that would be easily deductible if the businesses were not located in a home. Many business owners do not take legitimate tax deductions because of the complexity of the paperwork involved in doing so. The complicated recordkeeping now required by the IRS to qualify for a home-office deduction is a barrier to many who would qualify but don't have the time and staff to do the paperwork. That barrier would be removed if a standard deduction for home-based businesses were allowed. Like the 1040 standard deduction, the deduction would be optional. Owners could choose to continue to deduct the depreciated amount plus operation costs, as they are currently allowed to do, or they could choose the new standard home office deduction.