The American Institute of CPAs submitted written testimony to Congress for a hearing by the House Small Business Committee on modernizing the Tax Code for small businesses. The House Small Business Committee issued a
The committee also recommended allowing self-employed entrepreneurs to deduct the cost of health insurance premiums, raising the small business limit for deduction of business meals and entertainment to 80 or 100 percent, and restoring incentives for those with capital to move their money to small firms.
"Small businesses have always led us to economic recovery and growth, but the Tax Code is holding us back," said committee chair Nydia Velazquez (pictured), D-N.Y., in a statement. "With the nation facing the prospect of a recession, we should do everything possible to remove the barriers that stand in their way."
The AICPA, among other recommendations in its
The AICPA also said it supported H.R. 5450, a bill that would reclassify cell phones and personal digital assistants from listed property to business property. The AICPA said the bill would eliminate onerous substantiation requirements on taxpayers, including small business owners, who now have to maintain detailed records of business use of portable devices such as BlackBerries. The bill would reduce the possibility of tax preparers and taxpayers being subject to unnecessary penalties.
The AICPA also advocated providing W-2 forms to partners. "Individual general partners should be permitted to receive a Form W-2 for their guaranteed payments for services and to be treated as employees for purposes of income and employment tax withholding related to such payments," said the institute. The AICPA also recommended clarifying the husband-and-wife joint venture election under Section 761(f) to cover state law partnerships and limited liability companies.