Reproduced with permission from the Small Business Association Michigan (SBAM). View the Top Stories from their July 14th newsletter here.

Legislation has been introduced in both the U.S. House and Senate that would benefit small businesses that use their home as an office.

Because of the complexity of the tax code regarding home office tax deductions, many businesses that are eligible for the deduction do not claim it.  That has brought about the Home Office Tax Deduction Simplification and Improvement Act of 2009.

The bills would establish a standard deduction to encourage use of the deduction.  Taxpayers would still be able to itemize their expenses if they wish.  The bills would also ease the restrictions with regard to being eligible to claim the deduction.

The legislation would allow the home office deduction to be taken if the taxpayer uses the home to meet or deal with clients regardless of whether the clients are physically present. Second, the bill would allow for de minimis use of business space for personal activities so that taxpayers would not lose their ability to claim the deduction if they make a personal call or pay a bill online.

Rich Feight, CFP
Rich Feight, CFP

Hi, I'm Rich Feight I'm a fee-only Certified Financial Planner, successful business owner, and self-made millionaire that knows how to beat the system and become wealthy. I have a lot of clients that have done it too. I'm also pretty good at finding that ever-elusive work/life balance so many of us strive for. Lucky for you I have an abundant mindset and give all my knowledge away on my blog. So if you want to know what it takes to become a millionaire, follow me.

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