Office Furniture Tax Deductions: Do's & Don'ts
With April 15th right around the corner that can only mean one thing… taxes. The only good thing about this year is all the money that you can save by properly writing off all that new office furniture you bought last year. As a business, however, understanding what types of expenses can be written off can be quite confusing especially when it comes to office furniture and supplies. With the ever-changing tax codes becoming increasingly more difficult to maneuver, these office furniture tax deduction do’s and don’ts will help you to get the most from your office investments while also saving you from over-zealous IRS auditors.
Proper bookkeeping is the key to getting the most out of your tax return. If your books are a mess then you will either lose money on your taxes or you’ll end up being subjected to an audit. These are the do’s of proper bookkeeping:
- Keep a record of recurring bills that you have every month.
- Standard bills, such as rent, electricity, water, cable, Wi-Fi.
- Complex bills- such as security system, any reference materials, and a monthly subscription for software.
- Make note of anything purchased for the office throughout the year because they can be deducted. Some of these items can include:
- Office furniture, such as desks, tables, chairs, cubicles, etc.
- Office Supply, such as computers, paper, ink, pens, printers, phones, etc.
While these may just seem like bills that you are required to pay with no benefit, that is not always true. Most of the time, if it is a purchase made for the business, you can write it off as a business expense. These are just a small amount of regular expenses that you can write off within your business. Now we will dive in to look at the more uncommon expenses that will give you a great addition to your deduction.
Extra Write Off’s
Major expenses such as building renovations done to a newly rented office space or even marketing costs may be deducted through proper protocol.
- If any renovations are done to your space, you can deduct the cost of it.
- This includes paint, new flooring or roof, any demolition that occurs.
- Don’t forget the actual work- labor cost, hired contractors, materials, and any workers.
- If your business has any forms of marketing or travel expenses, those are liable to write off as well.
- Travel includes, but not limited to- airfare and any bags, meals, lodging, tips, mileage, and transportation.
- Marketing material including the ad’s, promotional items to give out, and any signs or logos.
- While these are some of the more discrete things you can write off, there are plenty of things that your business may do every day that could be considered a write-off. Some of the more blatant ones include:
- Cost of goods
- Accounting and Bookkeeping
- Car or phone used for business. (license, registrations, and taxes included
Owning a business provides you with more opportunity to write off expenses you would normally be able to write off. But be careful not to go too crazy with your deductions or you’ll be looking at an audit instead of a return. These are some of the don’ts of office tax deductions:
While new tax regulations may provide more leniency with writing off expenses such as marketing ads and materials, other items like your car requires certain protocol for being considered a legitimate write off.
- Everything written off MUST be for the business; things to not write off include:
- Personal cars and phones.
- Personal living space and expenses (if you run your business from home).
- You may acquire some of these during the workday, however, you cannot write them off
- Business Clothes, unless it is a uniform.
- Any fines and penalties (even paid out of the business account) are not deductible.
- Gifts for customers or co-workers exceeding $25.
Large Deductions NOT Allowed
Though some businesses make an extra effort to get larger deductions it does not always work out in their favor. It is important to pay attention to what can be written off and what will end up being denied.
- Though larger expenses can really help with taxes, there are some things to note before dropping a chunk of change in one area.
- You may write off charitable donations, however, it may NOT be a political contribution.
- Capital expenses
- Life insurance premiums
Remember that despite popular opinion that taxes are inherently evil, IRS tax regulations are actually setup to help you get the most out of your expenses and while navigating the murky waters of office tax deductions can lead to more savings for your business when filed properly be careful to adhere to these do’s and don’ts to avoid an embarrassing audit from your dear old Uncle Sam.