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U.S.
Senator Kit Bond (R-MO), Chairman of the Senate Committee on Small Business,
introduced the Home-Based Business Fairness Act of 1997, legislation designed
to level the tax playing field for home businesses by: implementing full
deductibility of health-care costs for the self-employed: restoring the
home-office deduction; and clarifying the definition of an independent
contractor. Senator Olympia Snowe(R-ME), a member o the Small Business
Committee and Senator Don Nickles(R-OK), Assistant Majority Leader, have
joined Senator Bond as original cosponsors of the measure. Congressman
Jim Talent(R-MO), Chairman of the House Small Business Committee and Congresswoman
Jo Ann Emerson(R-MO) will be introducing Senator Bond's legislation in
the House of Representatives.
ELEMENTS OF
THE HOME-BASED BUSINESS FAIRNESS ACT
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Full deductibility of health-care
costs for the self-employed: The recently enacted Kassebaum/Kennedy Health
Insurance Portability and Accountability Act will incrementally increase
the amount that self-employed individuals can deduct to 80% by the year
2006. While the increase definitely represents a step in the right direction,
Senator Bond is committed to full deductibility of health-insurance costs
for the self employed now. The home-based business legislation will accomplish
that objective beginning this year.
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Restoring the home-office deduction:
Many taxpayers would like to see Congress expand availability of the home-office
deduction. That way, small business owners who preform their work outside
of the home, but whose office is their home, will be allowed to take the
deduction without fear of an IRS audit.As the number of home businesses
increases, the importance of the deduction mounts. To expand use of the
home office deduction, the bill contains language that effectively overturns
the 1993 Commissioner of Internal Revenue vs Soliman Supreme Court decision
by adjusting the section of the U.S. Tax Code upon which the decision was
based. Senator Bond's bill will change the rules upon which that decision
was made with language that makes clear that the home office deduction
may be utilized when the essential day-to-day administrative or management
functions of the taxpayer are performed in the home and when there is no
other location for the performance of those activities.
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Clarifying the definition of
an independent contractor: Current law makes it difficult for business
owners to determine whether a worker is an independent contractor or an
employee. Senator Bond's legislation establishes a clear, safe harbor that
a business or a worker can use to determine independent-contractor status.
In addition, the bill will ease small business owners' fear of retroactive
reclassifications by the IRS that can destroy their businesses through
payment of back taxes, interest and penalties.
"The home-Based Business Fairness
Act is a common sense measure that has long been needed to provide the
fairness for the ever-growing number of individuals who operate their businesses
from home. "We should not keep them waiting any longer", as stated
by Senator Bond.
Write in support to
the Home-Based Business Fairness Act to:
* Sen. K. Bond; 428-A
Russell Senate Office Bldg.; Washington, D.C. 20510.
* Sen. C. Dodd; 444
Russell Senate Office Bldg.; Washington, D.C. 20510.
* Sen. Joe Lieberman;
706 Hart Senate Office Bldg.; Washington, D.C. 20510 |
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