This week Congressmen Kurt Schrader (D-OR) and Ron Kind (D-WI) reintroduced legislation to simplify taxes for millions of small business owners.

“I’ve built two small businesses from scratch,” said Schrader. “And I can tell you from experience that the complexity of our tax code hinders business growth. By making it easier for Oregon small businesses to pay their taxes you can encourage them to expand their operations and hire more workers – and job creation is exactly where Congress should be focusing our time right now.”

“Small businesses are the backbone of our economy,” said Kind.  “They are generating two out of every three jobs right now, serve as important anchors in our communities, and are vital to our economic recovery.  It is critical that we help these economic engines by providing the resources and tax credits to make it easier and fruitful to own and maintain a small business during this tough time.  I will continue working to provide the resources our small businesses need to grow, hire, and drive dollars back into our local communities."

The Home Office Deduction Simplification Act, HR. 1827, would allow home-based businesses to take a standard $1,500 deduction for home office expenses. According to the SBA Office of Advocacy, home-based businesses represent more than 50 percent of all businesses.

The current, more complex, formula requires excessive paperwork and is underutilized by qualifying businesses because of audit concerns. Advocacy groups were quick to praise Schrader and Kind’s efforts and the potential economic benefits of their legislation.  

Too many home-based business owners who are eligible for the home office deduction elect not to take it because of the complexity of the form and calculations required,” said Kristie Arslan, Executive Director of the National Association for the Self-Employed (NASE).

“This means valuable tax refund dollars that could be invested back into the business are left on the table each year. The creation of an optional standard deduction will go a long way in easing the minds of these cautious business owners. The fact that this bill ensures that the standard deduction will be adjusted for inflation also ensures that future businesses will be able to take advantage of this tax benefit for years to come,” continued Arslan.

Schrader and Kind introduced similar legislation in 2009 with Republican co-sponsors. However that legislation remained in committee when Congress adjourned. This year’s version, H.R. 1827, was referred to the Committee on Ways and Means for its consideration.