If you plan to deduct a business meal that costs less than $75, you no longer have to save the receipt. You do need to make a notation in a logbook or daily planner indicating the business purpose of the meal, however. The IRS recently finalized this change in its policy as part of the agency’s effort to reduce small-business record keeping burdens. Previously, receipts had been required when deducting business meals over $25. The NASE has long sought this change, and commended the IRS for agreeing to it.

NASE Members Named Home-Based Business Owners of the Year

NASE Members Edith and Roy Quick, owners of Quick Tax and Accounting Service in St. Louis, Missouri, have been selected by the U.S. Small Business Administration as “Home-Based Business Owners of the Year.” While SBA has long awarded annual honors to small businesses of other types—such as “Small Business Exporter of the Year” and “Entrepreneur of the Year”—this is the first year that home-based business owners have been spotlighted. So the award represents an especially distinctive recognition of the Quicks’ business success. The Quicks started their accounting business as a sideline in 1983. They had one client. Today they work at it full-time, serving more than 400 customers across the country, most of whom remain clients even if they relocate from the St. Louis area. “Many of our clients would be just a number somewhere else,” says Edith Quick. “Here, they’re a face and a person.” She adds: “We have experience as a small, home-based business and we can share that with our clients.” Like many home-based business owners, the Quicks report that their biggest hurdle has been getting people to accept them as a “real business.” In their spare time, the Quicks have been strong advocates for small businesses and the self-employed. Since being elected as delegates to the 1995 White House Conference on Small Business, they have remained leaders of the Conference’s ongoing Tax Issues Committee. They have encouraged Congress to make health insurance 100 percent deductible for the self-employed, and have urged the IRS to become more small business-friendly. Recently, IRS Commissioner Charles O. Rossotti also recognized the Quicks’ efforts by appointing Roy Quick to the IRS Advisory Council. 

The Quicks, who have been married for 35 years, have two married daughters. On behalf of everyone at the NASE, congratulations to the Quicks!

Internet Tax Freedom again Debated

Congress and the President are again considering whether to allow the states to tax Internet “e-commerce” transactions when the buyer and seller are in different states. A moratorium now exists on such taxes, and many in Congress want to extend the moratorium before it expires. In May, the House of Representatives overwhelmingly passed a five-year extension of the moratorium. But at the same time, it urged the states to coordinate and simplify their sales taxes to make interstate e-commerce taxation more feasible. The House also defeated a measure that would have made the tax moratorium permanent. The Senate and the White House favor a shorter extension of the moratorium—a view that is expected to prevail. Supporters of the Internet tax moratorium believe that e-commerce represents America’s new competitive edge, and should not be choked off with taxes before it has had a chance to grow strong. They note that mail-order catalog sellers also don’t collect sales taxes except in states where they’re physically located. Opponents of the moratorium say the states are losing increasingly large sales tax revenues that they need. What is indisputably clear is that e-commerce is expanding rapidly in its current, relatively sales tax-free environment. And while some self-employed people operating traditional retail establishments that pay sales taxes may be disadvantaged by the moratorium, many others will find striking new business opportunities through the Internet, partly because of the lower taxes on e-commerce. 

The NASE is following this issue closely, and will keep you informed of new developments affecting the self-employed.