No Business Like Home Business
Sen. Kit Bond (R-Miss.), chairman of the Senate Committee on Small Business, has proposed a bill he calls the Home-Based Business Fairness Act. The measure would give home offices full tax deductibility for expenses (currently tough to get from a picayune IRS if any aspect of your business is conducted outside your home office); allow the self-employed to deduct 100 percent of their health care expenses; and simplify the definition of "independent contractor" while ending the IRS practice of retroactively classifying them as employees, with concomitant back- tax penalties.
Currently, about 9 million Americans run businesses from their homes, and their numbers are increasing by roughly 20 percent a year. Almost three-quarters of home-based businesses are run by women.
The bill will be under consideration this congressional session from the full Finance Committee, three members of whom are co-sponsors of the bill. An identical House bill has also been proposed, sponsored by two Republicans from Missouri, Reps. Jim Talent and Joanne Emerson.
The bill is estimated to cost the government $8.3 billion, making it one of the cheapest tax cuts on the table, says Small Business Committee spokesman Kenneth Bricker. It's also, Bricker says, one of the hardest to attack as a "tax cut for the rich."