Working from home has it’s benefits. You can work in your pajamas. You set your own schedule. You can fold laundry or straighten up the house during a break. No one will ever complain about how loud your music is, or gripe about the sort of music you like. You never have to worry about the guy in cubicle four stealing your lunch. There is always coffee. The list of working from home benefits is virtually endless. However, in addition to the obvious pluses, having a home office has another distinct advantage come tax time. The portion of your home designated as an office becomes an tax deduction in the eyes of Uncle Sam. The IRS allows you to deduct a portion of your utilities, Internet expenses and even office equipment associated with your small business, meaning a lower tax bill each April (and who doesn’t like that idea?). However, when it comes to deducting office equipment, many folks remain curious about one thing: What home office equipment can you write off?
Did you purchase a new desk or ergonomic chair to help increase your productivity this year? You can deduct that on your tax return. You have the option to deduct the total cost you paid, or deduct a portion and use the rest of the deduction over time as the items depreciate.
If you are a photographer and needed a copy of Adobe Photoshop to help build your business, you are allowed to deduct that. If you are a freelance writer and needed an updated copy of Microsoft Word or if you needed grammar checking software like Grammarly or White Smoke, you can deduct those expenses. When it comes to software or subscriptions for items that help you run your business, you can write off 100 percent of the cost.
Computers and Technology
If you bought a new desktop, laptop, notebook, net book, tablet, cell phone, fax machine or printer that you use for business purposes, you can deduct the cost of your new tech on your tax return. Like furniture, you can opt for a straight one-time deduction or deduct using depreciation over time.
If you have employees or even if you employ your family members, you can also expense (deduct) any new technology or equipment you purchase for their business use. However, like any other deduction, make sure that the equipment is used only for business purposes.
If you have questions about deductions for your home office, it’s best to consult with a professional as opposed to making a costly mistake on your tax return. Talk to a certified personal accountant or visit the website for more information.