Grassroots Homeowners Groups Efforts To Reduce Taxes

In an effort to help ease the pain of income tax season, the American Homeowners Grassroots Alliance (AHGA) has urged Congress to improve the tax code. The AHGA stated in a testimony to the House Small Business Committee that Congress could make several reforms to simplify the tax process for up to 36.6 million home office households.

Why Tax Reductions For Homeowners?

The Census Bureau estimates that 18 million households are home-based businesses, including Internet businesses like eBay power sellers, website designers, real estate agents, mortgage brokers and many more. Other home-based businesses include telecommuters for all sizes of business and government.

By adjusting the rules for home-based businesses, homeowners might be able to deduct more from their taxes. According to AHGA President Bruce Hahn, “These changes would help homeowners, the economy and the environment.”

New Tax Efforts From Homeowners Group

AHGA has come up with the following suggestions to ease the burden of taxes on home-based businesses. The most basic is simplifying and freeing up tax deductions for home offices. Other plans include providing new tax incentives to encourage more people to work from home and faster write-offs for business equipment used at home in addition to new tax credits or deductions for broadband and cellular providers to expedite building networks to rural areas and underserved homes that lack quality Internet or cellular access.

Among the other proposals the AHGA came up with are allowing people to take a withdrawal or loan from an IRA or 401K for all expenses without penalty. Prohibiting state and local taxes on goods and services sold over the Internet is another one, along with the repeal of the federal excise tax (FET) on communication services, as well as repeal state “convenience of the employer” rules that make dual state income tax liability.

Whether or not Congress will enact these changes remains to be seen, but any improvement that helps desperate homeowners is welcome. “By reducing their tax burdens and improving economic efficiency,” said Hahn, “they may also help many hard-pressed homeowners avoid foreclosure.”