• NASE President Meets President Bush

• Home-Based Business Tax Avoidance Schemes

• In the News: Bush Nominates John Snow as Treasury

• Attention Florida NASE Members

NASE President Meets President Bush

Last week NASE President Robert Hughes had the opportunity to meet President George Bush at a Christmas reception at the White House.

“It was an exciting evening,” Mr. Hughes said. “It’s not everyday you get to go to the White House and meet the President and First Lady.”

Mr. Hughes said he was able to exchange a few words with President Bush during the evening. He reiterated the NASE support of the president’s small business agenda and thanked President Bush for the Administration’s efforts with the Women Entrepreneurship summits this summer. The NASE was a proud sponsor of all the summits, and plans to continue support for such events in the future.
 

Home-Based Business Tax Avoidance Schemes

The IRS provided the following information to help home-based businesses recognize tax avoidance schemes. Refer to the links below for more information on filing your tax return.

Most taxpayers with home-based businesses accurately report their income and expenses, while enjoying the benefits that a home-based business can offer. However, some individuals have received advice that they can operate any type of unprofitable “business” out of their home and claim personal expenses as business expenses. Non-deductible personal living expenses cannot be transformed into deductible business expenses regardless of how convincing the information in marketing materials may seem.

The following are a few examples of items that are generally not deductible as business expenses:

• Deducting all or most of the cost and operation of a personal residence. For example, placing a calendar, desk, file cabinet, telephone, or some other business-related item in each room does not increase the amount that can be deducted.

• Paying children a salary (e.g. for answering telephones, washing cars, etc.).

• Deducting education expenses from salaries paid to children wrongfully claimed as employees.

• Deducting excessive car and truck expenses when the vehicle was used for both personal and business use.

• Deducting personal furniture, home entertainment equipment, children’s toys, etc.

• Deducting personal travel, meals, and entertainment under the guise that everyone is a potential client.

Any investment scheme or promotion that claims to allow a person to deduct what would normally be personal expenses, and not ordinary and necessary business expenses, should be considered highly suspect. As always, a business must truly exist prior to claiming expenses. If you have questions on how to amend your return please contact the Internal Revenue Service at 1-800-829-1040 or refer to the 1040X Instructions (http://www.irs.gov/pub/irs-pdf/i1040x.pdf). For questions regarding specifics on tax schemes or if you wish to report a possible scheme, call 1-866-775-7474 or email irs.tax.shelter.hotline@irs.gov.

The following publications may also provide assistance on these issues:

• Publication 587, Business Use of Your Home

• Publication 463, Travel, Entertainment, Gift, and Car Expenses

• Publication 334, Tax Guide for Small Business

• Publication 17, Your Federal Income Tax for Individuals

In the News: Bush Nominates John Snow as Treasury Secretary

President Bush signed legislation this week to create a new Department of Homeland Security. The new Cabinet department is expected to employ 170,000 workers and combine 22 existing agencies, making it the most extensive reorganization of the Federal Government since the 1940s. Bush named current homeland security chief Tom Ridge to head the new department. For more information, visit the White House Web page at www.whitehouse.gov.
 

Attention: Florida NASE Members

Secretary of Health and Human Services Tommy Thompson is hosting a town hall meeting in Jacksonville, Florida on December 17. The Secretary will discuss the current state of the medical litigation system, pitfalls and potential solutions with consumers, employees, large and small business owners and healthcare providers.

Areas to be examined at the forum include:

• The impact of medical liability litigation on access to high-quality care

• The direct effect of litigation on patient safety

• The fear of litigation and how physicians practice medicine as a result

• The economic impact of litigation and how it relates to every American

• Extreme jury awards and the cause for premium increases

• Potential solutions to the current medical litigation system

The town hall meeting will be held at the Omni Jacksonville Hotel, 245 Water Street, Jacksonville, Florida. For more information about the meeting, please contact Robert Coon at rwcoon@att.net or 202.572.6242.
 

Do any of these issues affect you? Do you want to be proactive in helping the micro-business community? Visit the NASE's Legislative Action Center and “Tell Your Small Business Story.” This will help the NASE understand - on a personal level - how key legislative issues are affecting your business and your bottom line.

For more information about any of the articles in Washington Watch, contact Maureen Petron, NASE public affairs manager, at (202) 466-2100 or mpetron@nase.org.