In the office, an enormous part of the way business gets done depends on the office furniture that employees are provided with. That furniture creates individual workspaces, supplies the employees with comfort and provides employees with spaces for both quiet workspaces and collaboration areas. Your office furniture also comes with its own tax rules that can greatly benefit your company.
The Cost of Office Furniture
Furniture for your office is considered a fixed asset, and the laws regarding this type of asset are helpful for most small businesses. The full cost of the furniture that is used to outfit your office is generally completely tax-deductible. This is true as long as it is part of fixed assets that are valued at $500,000 or less. This can be tremendous tax savings when the many pieces of much-needed furniture are added up and deducted from earnings. Often, this tax savings offset much of the cost of that furniture.
Depreciation of Assets
If your business has more than the $500,000 maximum for these deductions, your company can use the depreciation rule instead. This allows for a credit based on the amount of depreciation allowed for that asset. Expect to take a 30% depreciation on the items for the year. This can be another big help when it comes to quarterly or end-of-year taxes for your business.
Getting All of Your Deductions
No matter which rule you fall under, and it may actually be both if only some of those assets fall outside of the $500,000 cap, make sure you are taking your full deduction. These tax rules are there to help small businesses handle the cost of doing business, and the cost of furnishing your office is an essential cost for every business. Never leave money on the table by leaving out some of the furniture you purchased or not finding out the precise cost for each piece. Good record keeping is needed to ensure that no purchase is left unaccounted for and that you have the records you need to prove the cost of the office furniture you will deduct.
If you have not yet furnished your office with what it needs, contact us to get started. You can get the pieces you need to keep business running and still offset some of the cost when it's tax time.