To amend the Internal Revenue Code of 1986 to simplify the deduction for use of a portion of a residence as a home office by providing an optional standard home office deduction.

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Home Office Tax Deduction 
Simplification and Improvement Act of 2008''.

SEC. 2. OPTIONAL STANDARD HOME OFFICE DEDUCTION.

    (a) In General.--Subsection (c) of section 280A of the Internal 
Revenue Code of 1986 (relating to exceptions for certain business or 
rental use; limitation on deductions for such use) is amended by adding 
at the end the following new paragraph:
            ``(7) Election of standard home office deduction.--
                    ``(A) In general.--In the case of an individual who 
                is allowed a deduction for the use of a portion of a 
                dwelling unit as a business by reason of paragraph (1), 
                (2), or (4), notwithstanding the limitations of 
                paragraph (5), if such individual elects the 
                application of this paragraph for the taxable year with 
                respect to such dwelling unit, such individual shall be 
                allowed a deduction equal to the standard home office 
                deduction for the taxable year in lieu of the 
                deductions otherwise allowable under this chapter for 
                such taxable year by reason of paragraph (1), (2), or 
                (4).
                    ``(B) Standard home office deduction.--
                            ``(i) In general.--For purposes of this 
                        paragraph, the standard home office deduction 
                        is an amount equal to the product of--
                                    ``(I) the applicable home office 
                                standard rate, and
                                    ``(II) the square footage of the 
                                portion of the dwelling unit to which 
                                paragraph (1), (2), or (4) applies.
                            ``(ii) Applicable home office standard 
                        rate.--For purposes of this subparagraph, the 
                        term `applicable home office standard rate' 
                        means the rate applicable to the taxpayer's 
                        category of business, as determined and 
                        published by the Secretary for the 3 categories 
                        of businesses described in paragraphs (1), (2), 
                        and (4) for the taxable year.
                            ``(iii) Maximum square footage taken into 
                        account.--The Secretary shall determine and 
                        publish annually the maximum square footage 
                        that may be taken into account under clause 
                        (i)(II) for each of the 3 categories of 
                        businesses described in paragraphs (1), (2), 
                        and (4) for the taxable year.
                    ``(C) Effect of election.--
                            ``(i) General rule.--Except as provided in 
                        clause (ii), any election under this paragraph, 
                        once made by the taxpayer with respect to any 
                        dwelling unit, shall continue to apply with 
                        respect to such dwelling unit for each 
                        succeeding taxable year.
                            ``(ii) One-time election per dwelling 
                        unit.--A taxpayer who elects the application of 
                        this paragraph in a taxable year with respect 
                        to any dwelling unit may revoke such 
                        application in a subsequent taxable year. After 
                        so revoking, the taxpayer may not elect the 
                        application of this paragraph with respect to 
                        such dwelling unit in any subsequent taxable 
                        year.
                    ``(D) Denial of double benefit.--
                            ``(i) In general.--Except as provided in 
                        clause (ii), in the case of a taxpayer who 
                        elects the application of this paragraph for 
                        the taxable year, no other deduction or credit 
                        shall be allowed under this subtitle for such 
                        taxable year for any amount attributable to the 
                        portion of a dwelling unit taken into account 
                        under this paragraph.
                            ``(ii) Exception for disaster losses.--A 
                        taxpayer who elects the application of this 
                        paragraph in any taxable year may take into 
                        account any disaster loss described in section 
                        165(i) as a loss under section 165 for the 
                        applicable taxable year, in addition to the 
                        standard home office deduction under this 
                        paragraph for such taxable year.
                    ``(E) Regulations.--The Secretary shall prescribe 
                such regulations as may be necessary to carry out the 
                purposes of this paragraph.''.
    (b) Modification of Home Office Business Use Rules.--
            (1) Place of meeting.--Subparagraph (B) of section 
        280A(c)(1) of the Internal Revenue Code of 1986 is amended to 
        read as follows:
                    ``(B) as a place of business which is used by the 
                taxpayer in meeting or dealing with patients, clients, 
                or customers in the normal course of the taxpayer's 
                trade or business, or''.
            (2) De minimis personal use.--Paragraph (1) of section 
        280A(c) of such Code is amended by striking ``for the 
        convenience of his employer'' and inserting ``for the 
        convenience of such employee's employer. A portion of a 
        dwelling unit shall not fail to be deemed as exclusively used 
        for business for purposes of this paragraph solely because a de 
        minimis amount of non-business activity may be carried out in 
        such portion''.
    (c) Reporting of Expenses Relating to Home Office Deduction.--
Within 60 days after the date of the enactment of this Act, the 
Secretary of the Treasury shall ensure that all forms and schedules 
used to calculate or report itemized deductions and profits or losses 
from business or farming state separately amounts attributable to real 
estate taxes, mortgage interest, and depreciation for purposes of the 
deductions allowable under paragraphs (1), (2), (4), and (7) of section 
280A(c) of the Internal Revenue Code of 1986.
    (d) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 2008.

Summary: Home Office Tax Deduction Simplification and Improvement Act of 2008 - Amends the Internal Revenue Code to allow a taxpayer who uses a residence to conduct a trade or business to elect a standard tax deduction equal to the product of a standard rate determined by the Secretary of the Treasury and the square footage of the portion of a residence used to conduct a trade or business (home office tax deduction). Modifies the rules for the home office tax deduction to: (1) allow a deduction for the cost of dealing with patients, clients, or customers even if they are not physically present in the home office; and (2) establish a de minimis exemption for personal use of a home office.

Requires the Secretary to ensure that all self-employment tax forms and schedules separately state amounts attributable to real estate taxes, mortgage interest, and depreciation for purposes of the home office tax deduction.