One of the great takeaways: a new standardized home office deduction available this year
With just two-weeks until the American public and millions of small businesses file their 2013 tax returns, the National Association for the Self-Employed (NASE), the nation’s leading advocate and resource for the self-employed and micro-businesses, released important tax tips, resources and updates to the tax code for filing accurate returns.
“Millions of small business owners will have the opportunity to take the new standardized home-office tax deduction offered this year,” says Keith Hall, president and CEO and national tax advisor for NASE. “This is welcome news for over 50 percent of the small business community with home-based businesses who won’t have to spend time filling out a complex IRS form to receive this new deduction.
“In addition, individuals and small businesses should educate themselves about the increased rates in the capital gains tax, Medicare rate and Net investment tax. You can never be too prepared. Now is the time to start gathering your documents and ensuring you know the changes and new adjustments to the tax code.”
2013 TAX SEASON CHANGES AND ADJUSTMENTS:
- A new streamlined, standard home office deduction is available for most small business owners
- An Increased threshold for deducting medical expenses
- Increase in tax rates for higher income taxpayers including an increase in the capital gains tax, the Medicare tax rate and a new Net Investment Income Tax
- A permanent “patch” for the Alternative Minimum Tax (AMT)
- The standard mileage rate for business use of an automobile has changed to 56.5 cents per mile
- Limits for retirement plan contributions such as IRA’s and 401(k) plans have increased
“While the streamlined, standardized home office tax deduction is a first good step, our nation’s smallest business – the self-employed and micro-businesses – continue to compete unfairly on an unequal playing field when it comes to tax regulations and basic policy priorities,” says Katie Vlietstra, vice president of government relations and public affairs.
“Not only are we treated differently than our corporate counterparts in the tax structure, the small business community also faces a challenging list of roadblocks. These obstacles too often prevent small businesses from opening, growing and expanding. We need to reinvest in the entrepreneurial spirit of this country by ensuring all small businesses, from the sole proprietor to the larger ‘small’ businesses with up to 499 employees, are treated equally under our nation’s tax code.”
TIPS FOR FILING:
- You are not alone: use many of the countless NASE resources available to help you through your preparation
- Get details straight from the source: bookmark the IRS website in order to get the details you need
- Look for hidden deductions: many people overlook deductions that could save thousands of dollars
- File Electronically to avoid math errors
- Avoid shortcuts
- If you just can’t get it done, you can ask for more time
The new home office deduction option offers a new, simpler way for calculating the home office tax deduction, allowing small business owners and employees who work from home and who maintain a qualifying home office to deduct up to $1,500 per year. The new option allows qualified taxpayers to deduct annually $5 per square foot of home office space on up to 300 square feet, for as much as $1,500 in deductions. To take advantage of the new option, taxpayers will complete a much simpler version of the current 43-line form.
The NASE Small Business Locator helps identify and connect our nation’s smallest businesses. The NASE is a 501(c) (6) nonprofit organization and provides big-business advantages to hundreds of thousands of micro-businesses across the United States. For more information, visit the association’s website at NASE.org.