• NASE 2006 Legislative Priorities
• Senate Begins Hearings on Alito, House Leadership Shaken Up
• IRS Simplifies Tax Filing Requirements for Small Employers
• Member Poll: Looking Back at 2005

NASE 2006 Legislative Priorities

The NASE pledges to fight an uphill battle to get small business issues on the legislative agenda this year. This first session of the 109th Congress was dominated by unexpected natural disasters and Supreme Court nominations, but the NASE will continue to push health care affordability and tax equity to the front of the small business agenda. "We would liked to have seen more action on micro-business needs last year but it is imperative that Congress consider them this session," said Kristie Darien, executive director of the NASE legislative office. "Health care costs continue to increase making health insurance nearly unaffordable for micro-business owners who still have to pay self-employment tax on their premiums. No other segment of the business population is forced to pay this tax and it is unfair that the self-employed still must." Accordingly, the NASE’s top legislative priority continues to be the elimination of the self-employment tax on health insurance premiums for sole proprietors that file the Schedule C or Schedule E tax forms. The NASE hopes to gain passage of the Equity for Our Nation’s Self-Employed Act, which was introduced in the Senate last year. In its efforts to improve accessibility to health insurance, the NASE will also continue to fight for tax credits for health insurance purchases and the formation of association health plans to curb the cost of health coverage for the self-employed and micro-businesses. The NASE will advocate tax relief for micro-business owners through supporting a simpler home office tax deduction, an increase in the tax deduction for business meals, and making permanent the current level of business equipment expensing. Without action from Congress, micro-business owners will go from being able to expense $100,000 worth of equipment last year, to only $25,000 this year. The NASE wants to make permanent the larger expensing amount. Two tax code reforms are also on the NASE legislative priorities: the home office deduction and clarifying the independent contractor definition. The complicated rules surrounding a home office and independent contractor often deter the self-employed from utilizing them. And both of these tax laws could significantly help reduce the tax burden of micro-business owners – if they were easier to understand. The NASE will also support legislation that provides for more retirement security, health technological gains, and a tax-free Internet. These, in addition to the maintenance and growth of small business programs, would greatly assist the self-employed to run and grow their business. For more information on any of the NASE legislative priorities for 2006, visit http://advocacy.NASE.org. Senate Begins Hearings on Alito, House Leadership Shaken Up As the Senate reconvenes this week, a battle is expected between Republicans and Democrats regarding the confirmation of Samuel Alito, Jr. for the Supreme Court Associate Justice position. Democrats plan to keep Alito on the defensive in their questioning and hope to prove that Alito is not within the judicial mainstream. Thus far, polls numbers show that nearly half of Americans think Alito, nominated by President Bush, should be confirmed. Republicans hope to have the Senate Judiciary Committee vote on Alito by January 17th so that the full Senate can vote by January 20th on his confirmation, although it is too early in the process to predict how long the hearings will take. Meanwhile, the House Republicans will hold a midterm election to choose new leadership. Over the weekend, Rep. Tom DeLay (R-TX) permanently resigned from his position as House Majority Leader. DeLay had temporarily stepped down from the position in September amid charges of political money-laundering. Rep. Roy Blunt (R-MO), who has been performing the duties of both the Majority Leader and Majority Whip, plans to run for the job, as does Rep. John Boehner (R-OH). This leadership shake-up is expected to dominate the House as Members of Congress return to Capitol Hill. IRS Simplifies Tax Filing Requirements for Small Employers (The IRS Taxpayer Education and Communication office has provided the following “Headliners” article in an effort to educate micro-business owners and make it easier to fulfill their tax obligations. For more articles, or for more information about any of the information contained in this article, please contact the IRS Small Business/ Self-Employed division at http://www.irs.gov/smallbiz.) Last week the Internal Revenue Service (IRS) issued temporary and proposed regulations that will significantly reduce tax filing burden for nearly 950,000 small business owners. Beginning January 1, 2006, certain employment tax filers will be able to file the new Form 944 (Employer’s Annual Federal Tax Return) once a year rather than filing Form 941 (Employer’s Quarterly Federal Tax Return) four times a year. The new Form 944 will reduce burden on eligible small employers who file quarterly returns with little or no employment tax due. Most employers who file Form 944 will be able to make a single payment with their annual return, according to the IRS. Eligible employers are those with estimated annual employment tax liability of $1,000 or less. The IRS will begin mailing notification letters between February 1 and February 15, 2006 to eligible small employers for calendar year 2006. Employers who do not receive a letter and believe they are eligible to file the new Form 944 can call the IRS at 1-800-829-0115 to find out if they qualify. Taxpayers should contact the IRS by April 1, 2006. New employers who expect to owe $1,000 or less in total annual employment tax (approximately $4,000 or less in annual wages) also are eligible to file Form 944. “This is just one more burden reduction step the IRS is taking to make it easier for small business employers to comply with the tax laws. Replacing four quarterly forms with one annual form is a significant benefit for small business taxpayers,” said the IRS Small Business/Self Employed Commissioner Kevin M. Brown. The new Form 944 and instructions will be available on the IRS Web site by January 31, 2006. Visit www.irs.gov for more information. Member Poll: Looking Back at 2005 With a new year ahead, many business owners take the time to evaluate the previous year and determine their business strategy for the year ahead. Tell the NASE how you your business fared in 2005 in this month’s online poll. Let the NASE know your opinions by visiting the MyNASE Web site at http://my.NASE.org/. Log in to your free MyNASE Web Account. If you have not set up an account, you can do so at http://my.NASE.org/ with your member number. Let your voice be heard in the association by taking this survey during the month of January.