I have a home-based business

[mcar]

At which I make very little money but it helps pay the bills. This tax atrocity eliminates my ability to deduct home office expenses. IOW, I'm better off working a Walmart for minimum wage.

So much for entrepreneurs and innovation.

[lunasun]

1. SCorp yourself?

[mopinko]

2. this

yup. prolly some other goodies in there, too.

[mcar]

3. I'll look into it

Thanks!

[Ms. Toad]

8. That's a lot of hassle, and no need.

This is part of the crazy scaremongering that was done because bill was still being written as they were voting on it.

The changes are to unreimbursed employee expenses. As a sole proprietor, you're not an employee.

[gilpo]

9. Not insignificant at all!

As a prior WFH employee, I was able to deduct home office space and it made a difference. This will affect many salespeople.

[Ms. Toad]

12. I'm not making a general statement - only about the actual Schedule C business

If you are a schedule C business (as the OP is), there is no need to become an S Corp, because Schedule C businesses are not losing their tax deduction - it is just a routine cost of doing business.

In addition, if you are an employee, you can't become an S-corp to make your employee business expenses deductible.

So neither the situation, nor the solution is the same.

There's a couple of solutions for employees (like salespeople) - both of which would require employer cooperation. Becoming an independent contractor would permit you to deduct the expenses - but if you become an independent contractor, you approximately double your social security - so you'd have to charge the employer a lot more for the same services to make it worth it for you, Conversely, you might work a deal with your employee to reimburse business expenses in exchange for lower salary. If you have a 100,000 salary & 10,000 in business expenses, offer to work for $90,000 but have all of your expenses reimbursed. You have the same pocket money & get to deduct all of your expenses. Your employer would have the same (or perhaps lower) expenses ($100,000 out of pocket - just going to two different pots people + business expenses. They would have a bit of an increase in hassle, but they might even save a bit, since benefits are often based on a percentage of your (lower) income.

[dumbcat]

4. Don't you do that on a Schedule C?

which to my knowledge hasn't been affected.

[mcar]

5. Yes

I read that those deductions will be eliminated.

[dumbcat]

6. Where did you read that?

I can't find anywhere where it is proposed to eliminate them on Schedule C. All I have seen is eliminating Employee Business Expenses as miscellaneous expenses on Schedule A. If you own your business that does not apply.

Do you do your own taxes, or have them done?

[Ms. Toad]

7. That is not correct.

The changes to deductions for unreimbursed business expenses are schedule A deductions, not expenses you incur on behalf of a properly reported (Schedule C) business.

[dumbcat]

11. Only for employee business expenses

The OP owns the business.

[Ms. Toad]

13. Correct - that is what I intended to say, if I didn't.

So, as an owner, the OP deducts home business expenses as the OP always has.

BUT if the owner has employees, for example, each of whom have their own home office expenses, THEY don't get to deduct them becuase they are employees - not business owners.

[mcar]

10. I appreciate the feedback

I read this in one of the many articles about the atrocity. I'll have to investigate further.