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Furnishing an office is a necessary but expensive endeavor. Purchasing furniture for your office will make you wonder, is office furniture tax deductible? 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 from their taxable income.
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 capital 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 or equipment expenses:
This is not a comprehensive list. What qualifies as necessary furniture for your business depends on your industry, products, and services. If you are wondering if certain office furniture is tax deductible, ask yourself:
If you answered yes to both questions, you can deduct the item from your taxable income. If you have specific questions about deducting office furniture, ask your accountant and they can determine what qualifies and how to categorize an item.
For more business write-offs you will want to take advantage of, check out “17 Tax Benefits You Can Take Advantage of as a Small Business Owner.“
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 the total square footage of your house 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, internet, 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 if it is strictly used in your office, that office furniture is tax deductible.
If you have any questions or need help with your business accounting and taxes, reach out to our team! We would love to help you any way we can!
Is office furniture tax deductible when starting a new business?
Yes, office furniture is tax deductible for new businesses, but there are limits. The IRS allows you to deduct up to $5,000 worth of office furniture in your first year. Any amount above this may be considered a capital cost, which requires different handling.
What types of office furniture can I deduct as business expenses?
You can deduct various types of office furniture and equipment, including desks, chairs, couches, coffee tables, tables, appliances (like refrigerators and microwaves), computers, printers, decorations, phones, televisions, monitors, and speakers. However, the furniture must be necessary for your business operations.
Can I deduct office furniture that I use both at home and in my office?
Office furniture must be used strictly for business purposes to be deductible. If you work from home, you can deduct furniture in your home office as long as the space is used exclusively for business. Personal items or furniture used for non-business purposes are not deductible.
How do I determine if an office furniture item is tax deductible?
To determine if an office furniture item is tax deductible, ask yourself: 1) Is the item necessary for successfully running or growing my business? 2) Is the item something most businesses in my industry would need to function? If you answer “yes” to both questions, the item is likely deductible. Consult with your accountant for specific guidance.
Are home office expenses, including furniture, deductible?
Yes, if you have a home office used exclusively for business, you can deduct related expenses. This includes a portion of your mortgage or rent based on the office’s square footage relative to your home. You can also deduct utilities and repairs related to the office space. Office furniture used exclusively in your home office is also deductible.
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