Home Office

Could Home Office Improvements Lower Your Tax Bill?

Published on

Discover more informative content by checking out the Keetria blog and podcast.

Planning updates to your home office? If you are doing so to support a small business, you could be in for potential tax savings. Tax planning and accounting services can help you make the most of these savings and also help you avoid issues with the IRS. It also helps to know upfront which expenses and updates can be deducted and which can’t. Check out this list of possible home office credits:

Some or All of Your Internet Costs

When it comes to self-employed tax credits, you can typically only write off things that you absolutely need to run your business. You may be surprised to learn that this includes either all or some of the fees you pay for your home internet connection. If your family utilizes the same connection for other tasks, like online learning, you can only deduct a percentage of the cost.

Many of Your Digital Security Expenses

Keeping your connection protected is a worthwhile endeavor, especially if you plan on storing personal information on devices or doing your taxes online (for instance). Without proper security measures in place — including antivirus software and a VPN — your information could end up in the hands of online criminals. Plus, you should be able to deduct any related expense.

Dedicated Home Office Space

If you’re creating a dedicated workspace at home, you could be eligible for the home office tax credit. This deduction can trip up many small business owners, but as long as you use your office exclusively for conducting business tasks, you should be okay.:

Keep in mind that employees who receive a W2 from their employers are not eligible for the home office deduction. Even if you work from home full time and have a dedicated home office, if you receive a W2, you cannot claim this deduction.

Direct Expenses Related to Your Business

Did you have your new home office carpeted? Or did you buy new office equipment and furniture? If your space qualifies for the home office deduction, you may also be able to write off these additional expenses. All of these costs should qualify as direct expenses for your small business. You just need to have receipts and documentation to prove as such.

Repairs Needed to Update Your Home Office

Other potential tax breaks you can take include those that offset the cost of needed repairs to your home workspace. Once again, taking these detailed deductions requires clear documentation and quite a bit of work. This is why so many small business owners may be better off taking a simplified home office tax credit to save themselves the time and hassle.

General Improvement/Repairs for Your Home

Okay, so you can’t claim most updates and home improvements on your business taxes. However, if these improvements add value to your home or are made to accommodate a family member with a disability, you can use related deductions to save on your personal returns or if you decide to sell your home in the future. For instance, if you finish an attic to create more bedroom space and free up a room for your home office, these expenses should qualify.

To make planning for these home improvement projects less overwhelming, websites like Angi provide a simple way to connect with the services you need. For example, if you’re looking for a handyman, you can find a top handyman near me and easily check whether they’re certified and how many ratings they’ve earned. You can also see which services offer deals and coupons, so that you’re not only lowering your tax bill, you’re also saving money on the costs of home repairs.

Business Owners Should Beware

There are quite a few ways that making home office or general home updates can save you money come tax time. As you may have noted though, we used a lot of terms like “may” and “could” throughout this guide. That’s because taking advantage of these money-saving deductions does require some professional savvy. If you are interested in maximizing your savings without triggering an audit, consider working with a professional tax preparation service.

Making improvements to your home office can increase your productivity. It may also help you save on your tax bill, depending on the sort of updates you make. Your best bet is to consult a professional accountant as you plan your project and certainly when you complete your taxes.

 

Keetria is an entrepreneur, wellness advocate, and brand strategy coach for creatives & entrepreneurs with 16 years of public relations expertise working with some of the world’s leading brands, startups, media personalities, and entertainers. If you would like to work together, don’t hesitate to reach out!

You might be interested in

5 Desk Items to Keep You Motivated All Day Long

Published on

5 Desk Items

When you’re at work, it can be hard to be motivated. You stare at a computer screen all day long, pick up the same phone over and over and you don’t have a lot of room to be creative unless you’re working from home. The default uniform for cubicles can be depressing, especially when you’re staring at the same dividers and walls over and over again, day in and day out.

Thankfully most places of business allow employees to have a little sense of self in their workspace, and if you work from home then you’re the boss – you get to put whatever you want in your office, no questions asked. Because you have this sense of freedom, it’s up to you to make your workspace more motivational.

We’ve all seen those little motivational posters and buzzword stickers people put on the walls, but really – are you trying to be motivated or cheesy? Motivation comes from something meaningful and personal, and these 5 motivational items can keep you going all day long, even when it’s a rough one.

Favorite Animal Accessories

Okay, so a little cheese is alright. The companion of an animal is something that most of the world enjoys, so why not bring that cheer into your office surroundings? If you’re the crazy cat lady at home, why not be one at work, too? This doesn’t even have to apply to animals that are typical household pets. If you like sharks or sloths, why not go for that kind of theme too?

The point is to surround yourself with something that makes you happy in a tangible way. Animals are creatures that you can experience, and this can motivate you to work – whether it’s coming home to pet your own kitties or swimming with the sharks on your next vacation.

Photo Stickers

It can be hard to stay motivated with a family portrait that’s too large to bring to work or that can’t be in your line of sight while you’re typing. Something that’s motivational should always be at eye level and something you see or use almost constantly. Splurge on a website that can create stickers out of your photos, and then stick them to useable items that are closer to you.

Money Jar

Why else are you working if not to make more money? Seeing a visual representation of your savings, even if it’s just spare pocket change, can give you an added motivation boost. Bring your spare change to work every day and deposit in your makeshift piggy bank. You’ll feel more productive and driven every time you sit down.

Prompt Books or Calendars

Books like “Wreck This Journal” provide readers with instructions on how they should complete the task at hand – wrecking the journal. These prompts are meant to inspire creativity, and more adult products like those from Listography help capture the same sense of productivity and task-fulfillment. Find something in this same vein and fill out on page or complete one task every day at work.

A Home Keepsake

Sometimes you really just want to throw in the towel and go home, but you’re a responsible adult with bills to pay so you don’t. Still, if you want to keep these feelings at bay, your best bet is to bring your home to work instead. Even a small knick knack that can keep you grounded can really do the trick.

You might be interested in