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Congressman Andrews Announces Simplified Tax Code for Home Business Owners
Feb 1, 2013
WASHINGTON, D.C. – Today, Congressman Andrews announces a simplified tax formula for those who work from home, that will allow them to focus their efforts on growing their businesses and creating jobs. Thousands of people in South Jersey who work from home will be able to take advantage of this new formula and reinvest their time into innovation.
The current procedure involves itemizing one’s housing expenses, such as insurance, property tax, electricity, and mortgage payments, and then deducting the percentage of expenses that is equal to the amount of space in the home dedicated to the office. Beginning with next year’s tax returns, those that work from home, such as sales professionals and consultants, will be allowed to deduct $5 per square foot of devoted office space, up to 300 square feet, for a total deduction of $1,500. This standardized deduction is a new, optional deduction. This is not a reduction in the allowed cap. Someone who is able to claim more than $1,500 is free to do so through the traditional method.
“For our businesspeople that operate out of a home office, we welcome the opportunity to help them simplify their tax returns,” Congressman Andrews said. “Through this new option, home business owners can spend less time filing out tax forms and instead put more energy toward growing their business and creating jobs.”
Congressman Andrews is committed to creating jobs in South Jersey, and one way to do that is through supporting home business owners. According to the 2010 Census, 3.8% of people in the combined Philadelphia/South Jersey area work at home, an increase from 2000. To help foster innovation and ingenuity, we must make it easier to start businesses. An important part of this process is ensuring that prospective business owners are not deterred by a complex tax code. By simplifying these sorts of regulations we can move forward in creating jobs for the residents of the First District. For more information on claiming this deduction, please visit the IRS website.