Vice-President Harris Suggests a Standard Deduction for Small Business

A standard deduction for small business may help some but likely will not help many farmers.

Photo by Nathan Anderson on Unsplash

Vice President Harris is proposing some type of standard deduction for small business, however, there are no real details on this proposal yet.

Just like the standard deduction for personal tax returns, this deduction is “automatic” and eliminates the needs for small business to maintain expense records.

But the problem is no details are available and based on other similar proposals it likely would not work for farmers.

First, this standard deduction is likely only available if your gross receipts are less than $100,000 and all of your income was reported on Form 1099s. Almost no farmers would meet this requirement.

Second, would the standard deduction be based on gross receipts or would it be a flat amount. It seems the best method would be for a percentage of gross receipts. Also, would there be a different standard for businesses with little costs such as consulting or a higher deduction for companies with more costs such as a retail operation.

As of now, nobody knows, and likely no further granular details would happen until she is elected (if that happens).

The bottom line is if you are farmer, you can safely ignore this proposal in almost all cases.