Office Expenses That Can Qualify for a Tax Deduction

by May 11, 2021

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Running a business is a lot of work, but it can also get extremely expensive. That’s why being aware of the tax deductions you have at your disposal can help you to make your business more sustainable. Many of the everyday (and less frequent) office expenses of running a business can be deducted, which can make your life a little easier while you are running your business.

Rent or Mortgage

One of the biggest expenses you will incur as a business owner is the rent or mortgage you pay for your office space. This is true even if you run your business from home. Luckily, the rent and mortgage that you pay for your business space can be deducted from your taxes to help make running your business a bit more manageable. There are rules and guidelines that specifically outline what parts of mortgage and rent can be deducted, so it is important to do some research or hire a tax professional to figure out the logistics. The more you know about deducting those expenses, the easier it will be.

Energy Bills

Energy bills are always expensive, but when you are running a business, they can go up even further. Your energy use tends to go way up when you are working to keep your business going, so deducting your energy bills can help to keep you afloat. The government knows that it takes a lot of energy to keep your business going, so they offer tax deductions to offset some of the energy costs involved in running your business. Keep track of your energy expenses each year so you can take advantage of those deductions and avoid paying more taxes than you should.

Heating and Cooling

In addition to your energy bills, the systems that help you provide that energy can also be deducted in some cases. Having an updated HVAC system can help you to improve the efficiency of your office and keep things running smoothly. Sometimes you simply need to tune up your current system while in other cases you may need to have the whole thing replaced. HVAC systems can get expensive, especially for an office. Make sure to take advantage of the available deductions so that you can decrease your expenses for taking care of such an important project.

Office Supplies

Office supplies may seem like pretty small expenses, but they add up over time so it is worth using the deduction. Office supplies can be deducted fully because generally a workplace simply buys what they need for the year. Other things like toner have to be deducted a little differently, but they still qualify for a deduction. It is a good practice to talk through your office supplies deductions with a professional so that you know you are making each deduction appropriately. Having a record of your purchases can make the process easier on you and will give you something to look back on when making your deductions.

Office Furniture

You may not need to replace office furniture too often, but when you do, you’ll notice that it can get pretty pricey. The office furniture tax deduction comes in handy when you are buying or replacing office furniture. You can deduct your entire office furniture purchase resulting in a certain percentage back depending on your tax bracket. This can have a huge impact on your overall expenditures and help you to manage your finances a little more easily. There are also bonus depreciation options depending on your overall spending that you should look into.

Your Tech Purchases

A lot of business money goes into buying the technology that will allow your business to function. When you add up all your tech purchases from computers to software and even accessories, it can add up to a pretty big expense. Luckily, there are deductions available to help offset those essential costs. You can either deduct your computer in full upfront or use depreciation to spread the deduction over time. It is estimated by the IRS that a computer will be good for 5 years, so you can purchase a new computer and deduct it on that schedule if you continue to use computers for your work.

Certain Education Expenses

Another great deduction is education expenses. You can’t deduct just any educational expense, but if it allows you to maintain or increase your business-related skills and abilities, you can deduct it. This makes growing your skill base and continuing to hone your expertise much more manageable from a financial standpoint. Improving your education and skills is an important part of running a business, so you may as well take advantage of these deductions so you can become even better at your job and earn more profits in the future.

Your Business Insurance

Every business needs insurance to protect itself in a variety of ways. Deductions for business-related insurance can help you to decrease your costs while still getting the protection you need. From insurance on your office space to liability insurance, you must protect yourself and your business in case anything happens. Hopefully, your insurance will simply be a precaution, but, likely, you will need to claim from time to time. In addition to deducting insurance costs, it is also a good idea to shop around and bundle your policies so you can get the best possible deal while insuring your company.

Dealing with the expenses of a company can be a demanding job, but with the help of deductions, it can be a little bit easier. Make sure to thoroughly track all of your purchases so you can make filing your taxes a little bit less complicated. As a business owner, you have a lot on your plate, so it is in your best interest to take advantage of any deductions or benefits you have available to you throughout the process.

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Hey, I’m Kate! I’m a designer, digital nomad and founder of Six Figure Freelancers – I love to help talented tech pros start businesses.

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