For small businesses operating out of your home this should be good news for you. See below information
There seems to be some momentum building to increase the minimum wage over time[9.25] and include a cost of living increase[AB 10]. Last year legislation was introduce providing for a cost of living increase only and it got stopped in Appropriations. It very well may have had a cost to the state but I don’t know for sure. If there is anyone in the Sacramento area that has thoughts on this one way or the other and would be willing to talk to the media please let me know.
Small Business California
2311 Taraval Street
San Francisco, CA 94116
Helping Small Business Owners and Home-Based Employees Claim the Home Office Tax Deduction
By: Deputy Secretary Neal S. Wolin and SBA Administrator Karen G. Mills
Today, many taxpayers who qualify for the home office tax deduction are not claiming it. The reasons often cited are that businesses and filers do not fully understand the provisions or find it too complicated to calculate the amount.
That is about to change.
As part of ongoing efforts by the Administration to reduce paperwork burdens, the Internal Revenue Service (IRS) announced today that it is providing a new, simpler option 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 IRS also expects taxpayers to save more than 1.6 million hours per year in tax preparation time from this simpler calculation method.
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 announcement builds on the President’s commitment to streamline and simplify the tax code for small businesses and to reduce the burden for tax compliance. It is part of broader efforts to make interacting with the federal government easier and more efficient for businesses of all sizes.
These new rules help our tax code better reflect the needs of America’s 21st Century workforce and especially small businesses, which play a vital role in our economy. Today, more than half of all working Americans own or work for a small business. An estimated 52 percent of small businesses are home-based, and many of these small businesses have home office space that would qualify for the deduction. And as technology improves, more businesses – large and small – are going virtual and recruiting employees from across the country, many of whom work from home offices.
Since he took office, President Obama has signed into law 18 tax cuts for small businesses. And the recently signed American Taxpayer Relief Act of 2012 includes extensions of several additional small business tax incentives designed to spur innovation, support capital investment and make it easier to hire new workers.
Today’s announcement also is part of a broader effort by the President’s Office of Information and Regulatory Affairs (OIRA) to reduce paperwork burdens for small business owners and individual taxpayers across all government operations. Agencies have posted paperwork burden reduction updates on their OpenGov websites, which also have more information on agencies’ regulatory “lookback” efforts.
The new option for the home office deduction will be available starting with the Tax Year 2013 return, which most taxpayers file early in 2014. In addition, the IRS is accepting comments for improving upon this new option.
Current restrictions on claiming the home office deduction, such as the requirement that a home office be used regularly and exclusively for business and the limit on the amount of the deduction tied to income derived from the particular business, still apply under the new option.
Neal S. Wolin is the Deputy Secretary of the U.S. Department of the Treasury and Karen G. Mills is the Administrator of the Small Business Administration.