Furnishing an office is a necessary, but expensive endeavor. The Internal Revenue Service (IRS) understands that office furniture is a vital aspect of running a business, so they allow business owners to deduct those expenses on their taxes.
There are rules when it comes to deducting office furniture. First, the IRS only allows you to deduct $5,000 worth of furniture if you are just starting your business. Anything more could be considered capitol costs. You also can only deduct furniture that is necessary and that is actually used in your business. This means it’s best that your office furniture stays at your office. You shouldn’t be buying something personal and writing it off as a business expense.
The following items can be claimed as office furniture expenses:
- Coffee Table
If you have anything else that you’re wondering counts as office furniture, ask your accountant and they can determine if it qualifies.
Home Office Expenses
A lot of small business owners work out of their homes instead of an actual office. The IRS still allows business owners to write off their home office expenses.
If you’re working out of your home you can claim the part of your house that you work in as your office. This means that you can write off part of your mortgage or rent as a business expense. You should calculate the square footage of your office and subtract that from your total footage to decide how much of your mortgage or rent you can write off. If you choose to write off your home office it’s best practice to only use that space as an office. If you have other uses for the room then it’s not deductible.
You can also write off other normal business costs associated with using your home like trash removal, electric and heating, snow removal and other minimal repairs to your home that would affect your business. One thing you can’t include as part of your home office is a bathroom.
The office furniture rules apply to home offices as well, so any furniture that is strictly used in your office can be deducted on your taxes.