HOME Act would allow business owners who operate from homes to take a standard home office deduction of $1,500

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FARMINGTON — Bills introduced earlier this month in Congress aim to make the process of filing federal income taxes easier for small, home-operated businesses.

The bipartisan Helping Our Middle Class Entrepreneurs, or HOME, Act comes from conversations with small business owners who suggested ways the government could better support businesses, according to a press release from the office of Sen. Tom Udall, D-N.M.

Udall sponsored the Senate bill and Sen. John Boozman, R-Ark., is a co-sponsor. Rep. Michelle Lujan Grisham, D-N.M., introduced a similar bill in the House.

The HOME Act would give business owners who operate primarily from their homes the option of taking a standard home office deduction of $1,500, rather than filing the often confusing and complicated paperwork associated with working from home. The Internal Revenue Service created a temporary standard home office deduction in 2013, and the HOME Act would make that deduction permanent, reducing the paperwork burden on small businesses.

"We have over 150,000 small businesses in New Mexico that play an integral role in driving our economy," Udall said in the release. "The federal government should be doing everything it can to make it easier for entrepreneurs to succeed, not making it more difficult for them to file for their hard earned tax returns."

Several local home business owners weighed in on the bill.

Bjorn Baal is a new business owner who recently purchased a company that manufactures piston rings for small engines, such as those used in model airplanes, weed-eaters, lawn mowers and motorcycles. Baal's customers are located throughout the world, including in countries like New Zealand, Australia and Canada.

Baal makes the equipment and runs his business, which he named RMJ Machineworx, from his Farmington home.

Although he has only owned the company for a few weeks and has not yet been through the tax-filing process, he said the HOME Act would help when it comes to tax time.

"I understand the benefits of the bill," Baal sadi. "There are a lot of hoops to jump through owning a business, so I welcome anything that would make it easier to run the business."

Baal purchased the company from Frank Bowman, who ran it for 15 years before retiring.

Bowman agrees that bills like the HOME Act, as well as similar measures that make regulations less complicated, are helpful for small businesses.

"We had a lot of issues with taxes, but primarily with New Mexico state taxes, rather than federal taxes," Bowman said. "They audited me, and because they thought I had all New Mexico customers instead of customers all over the world, they said I owed thousands of thousands of dollars."

Bowman said he was grateful he kept all of his receipts through the years, which eventually proved to state auditors that he only had a few clients from New Mexico and owed about $30.

Frank Bowman's wife, Valerie, took care of the administrative portion of the company during the years her husband ran the business. She said she thinks the HOME Act would be beneficial to home businesses.

"I really think it would help," she said. "It would make it a lot easier for people to figure out how to file their taxes. Even if businesses are using a tax preparer, it would also make it easier for them to figure out taxes."

Debbie Fentiman is a consultant for Rodan and Fields, a line of skin care products. She and her husband also operate a plumbing company from their Farmington home called Fentiman Plumbing & Heating.

Fentiman said she and her husband have prepared their own taxes, but they now use an accountant.

"Taxes have gotten so confusing over the last years," she said. "There's a lot we want to make sure we don't lose out on, so we have the accountant file for us."

Fentiman said that even if the HOME Act passes, she and her husband would still go to an accountant for tax purposes.

"But anything that's going to make the tax situation easier is a good thing," she said. "At some point, we might decide to do our own taxes again, especially if it was easier and if it made sense to do it that way."

Leigh Black Irvin is the business editor for The Daily Times. She can be reached at 505-564-4621.  

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