Everyone has to be somewhere, according to a line from an old BBC show. Whether you work in an office building, at a strip mall, at a table in Starbucks, or in your home, you have office-related costs. These costs include expenses related to the physical space, such as rent for an office within a commercial building or a home office deduction if you operate from home. Office costs also include supplies, technology costs for a website and computer backup and maintenance, utilities, and insurance. You may have some or all of these expenses.
Whether your office is a retail store, a greenhouse, an artist's studio, a medical office, or an office in a commercial building, it has to work well for you. Check on:
Your monthly rent for commercial space is fully tax deductible. Rent can be a fixed monthly amount or an amount based on a percentage of your gross receipts.
The rent must be reasonable, which is assumed when you and the landlord are not related. However, if the landlord is your brother, your mother, or someone else with a close relationship to you, the IRS may take a close look at whether the amount of the rent is reasonable. If it's too high, you won't be able to deduct the full amount. What's reasonable? Essentially, reasonable means the going market rate. Think about what would be charged to a third person with no relationship with the landlord. Related persons for this purpose include members of your immediate family:
Not treated as related persons for this purpose are in-laws, aunts and uncles, and friends.
In addition to the basic monthly rent, there may be other payments that you can or cannot deduct.
You may be required to pay a security deposit. Usually, the security deposit is viewed as an advance payment because the landlord must keep it on hand and does not have the right to use it now. It very well may be returned to you. Thus, you can't deduct the security deposit until it is kept by the landlord and applied toward the rent or other obligation in the lease.
You may be given a rent reduction if you agree to pay the rent in advance. The amount you save isn't taxable to you. However, you can't deduct the prepayment if it covers too long a period. There's a 12-month rule that permits you to deduct prepayments if the right or benefit created by the prepayment does not exceed the earlier of:
Example
On November 1, you prepay rent for the next six months, which covers you through April of the following year. Because the right of occupancy does not run for more than 12 months after the right begins (November 1), you can deduct the full prepayment in the year of payment.
A lease is a contract that lets you use space that someone else owns. Don't sign on the dotted line for a commercial lease unless you understand what you're getting into. There may be potential legal traps for you.
Just about every term in a commercial lease is negotiable; very little is boilerplate. Thus, it's imperative that you work with a commercial real estate lawyer to help you get the best terms for you and to make sure you fully understand your rights and obligations under the lease.
Did you know …
The attorney's fee for helping you with the lease is not fully deductible in the year you pay it, even though you are on the cash basis. The costs of acquiring a lease are treated under tax rules as a capital expenditure. This means you must capitalize the cost (add it to the lease) and then deduct the fee evenly over the term of the lease. The same tax treatment applies to a broker's fee for finding the space.
A solution for a growing number of self-employed individuals who need professional-looking space on an occasional basis is to “rent” by the hour or day in an office suite for this purpose. Maybe you need a conference room to make a presentation; or maybe you want to host prospective customers on Main Street rather than on Elm Street but don't want or can't afford to rent regular office space.
So-called virtual offices can be found around the country, particularly in urban areas where rents for traditional space are high. Virtual offices have receptionists to answer your phone (whether or not you're at the virtual office), Internet access, photocopying equipment, a kitchen facility, and other amenities you'd find in a traditional office.
Again, the cost of using an office is tax deductible to you.
If you work from home, you're in good company. The U.S. Small Business Administration says that 60.1% of all small businesses with no paid employees operate from home. What's more, many people take work home after hours, using technology to enhance their productivity.
From a tax and financial perspective, using a home office makes a lot of sense. It turns what would otherwise be nondeductible personal expenses into deductible business expenses. And it avoids the need to pay rent for outside space.
Before you begin to work from home, be sure it makes sense for your situation. Ask yourself these questions:
The home office deduction is an umbrella term used to describe the single write-off you take for a host of expenses related to operating your business from home. The deduction covers:
Not every cost related to your home is part of the home office deduction. For example, the cost of landscaping and lawn maintenance is not part of the home office deduction.
To claim a home office deduction, you must meet a two-prong test. First you must show that the purpose of the use is satisfactory for tax law purposes. Then you must show the use of the space in your home is only for business.
The use of the space in your home must be for one of the following:
Check which condition applies to your situation to see if you qualify for the home office deduction.
If you only work from home and from no other location, you clearly establish the home office as your principal place of business. Thus, if you are a freelance writer pecking away at your keyboard, your home is the location of your business.
However, many self-employed people really earn their money in the field (e.g., an interior decorator who works with residential clients or an electrician who has commercial customers). In this case, your home office is also treated as the principal place of business if it's where you perform substantial administrative activities and you have no other fixed location for these activities.
Examples of substantial administrative activities include:
If you don't use the space for substantial administrative activities, you'll have to see whether, under the facts and circumstances, your home office is your principal place of business, based on the following:
A tax return preparer with a downtown office who meets clients in her home office in the suburbs to sign tax returns would meet this condition. However, simply making phone calls from a home office is not considered “meeting” with customers.
A garage converted to a studio, a greenhouse for growing plants you use in your business, or any other separate structure used for your business all satisfy this condition.
Even if the reason why you use the space in your home is satisfactory, you can't take any deduction unless the use of the space is exclusively and regularly for business.
The area you use for business cannot be used at any time for personal purposes.
Example
You are a contractor who uses a den in the evening to prepare estimates for prospective customers. Your children use the den during the afternoon to do their homework. You fail the exclusive use test.
There are two important exceptions to the exclusive use test. You can qualify for a home office deduction if you use part of your home:
However, storing business records doesn't satisfy exception #2, even if you are required by law to keep records.
Example
In one case, a sole proprietor who ran a “smog check” business was required under California law to keep invoices and records for at least three years. He didn't have space in his apartment, so he kept them in a garage nearby and parked his car elsewhere. Even though this was cost effective, because he wasn't in a retail or wholesale business and didn't store samples or inventory, this arrangement didn't satisfy the condition for treating the garage as home office space.
Exclusive use does not require you to use an entire room for business. You can use a portion of a room and don't even need a physical partition for the office space. Just make sure that the area is, in the words of the IRS, “separately identifiable.”
Regular use of a home office means ongoing and continual. You fail the regular use test if you only use the home office occasionally or incidentally, even if the area is exclusively for business.
Just like the deduction for business use of your vehicle (Chapter 5), you have two ways in which to figure your home office deduction: the actual expense method and an optional simplified method.
The actual expense method allows you to take a fixed percentage of your otherwise personal costs of the home and treat them as a deductible business write-off. These are called indirect expenses. You can also add to this the full amount of any expense that directly relates to the home office, such as painting the room used as a home office. These are called direct expenses.
If you own your home, you can take depreciation on the portion of your home used for business. Depreciation is based on the cost of the portion of your home used for business or fair market value, whichever is lower.
Example
In 2015, you bought your home for $280,000 ($30,000 of which represents the cost of the land). In 2019, you use 10% of the space in your home for business, when the value of your home is now $330,000. You can claim depreciation of $25,000, which is 10% of the cost of $250,000 (the cost of the home exclusive of land, which is never depreciated). This is less than 10% of the home's fair market value, or $33,000.
Depreciation is based on the applicable percentage from Table 6.1. Use the percentage for the month you start using your home for business. (The rates in this table are based on your home office being treated as residential realty, with certain special tax rules applied, because your home is being used for business in this case.)
Table 6.1 Rates for Depreciating Your Home Office
Month in the First Recovery Year the Property Is Placed in Service> | ||||||
Year | 1 | 2 | 3 | 4 | 5 | 6 |
1 | 2.461% | 2.247% | 2.033% | 1.819% | 1.605% | 1.391% |
2–39 | 2.564 | 2.564 | 2.564 | 2.564 | 2.564 | 2.564 |
Year | 7 | 8 | 9 | 10 | 11 | 12 |
1 | 1.177% | 0.963% | 0.749% | 0.535% | 0.321% | 0.107% |
2–39 | 2.564 | 2.564 | 2.564 | 2.564 | 2.564 | 2.564 |
Example
Same facts as in the example where you can depreciate $25,000. You begin to use your home office in May 2019. Your depreciation allowance for 2019 is $401 ($25,000 × 1.605%).
The actual expense method is figured on Form 8829, Business Use of a Home. You'll find a sample form in Figure 6.1.
How much of your home do you use for business? This portion is used to determine how much of your indirect expenses are added to the home office deduction. Usually, this is figured on square-footage basis. Thus, if your home is 2,500 square feet and you use 250 square feet as your home office, then 10% of the home is used for business.
Example
Your indirect expenses total $7,800. You use 15% of the square footage of your home as an office and you qualify for the home office deduction. Your write-off is $1,170 ($7,800 × 15%).
If all of your rooms are of approximately equal space and you use one room for business, then you don't have to use square footage. For example, if you have a five-room apartment and you use one room for an office, you can treat 20% of the space for business, assuming all of the rooms are about the same size.
A special allocation rule applies to daycare businesses. The rules are based on hours of usage. The fact that the space is not used exclusively for business won't prevent a deduction. Here's how to figure the percentage of business use for a daycare business:
Example
You run a daycare business in the basement of your home, which represents 50% of the total space of your home. The business operates 12 hours a day, 5 days a week, 50 weeks a year. Thus, you use your basement for business 3,000 hours a year, or 34.25% of the total hours in the year (3,000 ÷ 8,760). The percentage applied to indirect expenses is 17.13% (34.25% × 50%).
Did you know …
You must have a license, certificate, registration, or other approval from your state to operate a daycare center, or family or group daycare center. You can claim the deduction if you've applied for approval, but not if you've been rejected or had your approval revoked. You don't need licensing if your state says so. For example, you may not need a license to mind three children in your home. Check your state licensing rules, which can be found at https://www.daycare.com/states.html.
The simplified method is a rate set by the IRS. For 2019, the rate is $5 per square foot up to a maximum of 300 square feet. Thus, the most you can deduct for a home office under the simplified method is $1,500 ($5 × 300). The IRS may increase the $5 limit, but is not required to do so annually or at any other particular time.
Using the simplified method produces all of the following results:
Line 1: Enter the sq. ft. of your home office | _______ |
Line 2: Multiply line 1 by $5 | _______ |
Line 3: The amount on line 2 is your deduction |
Figure 6.2 Simplified Home Office Deduction Worksheet
You figure the simplified method on a worksheet for this purpose. You can use the sample worksheet in Figure 6.2.
Which method is better for you to use, the actual expense method or the simplified method? Obviously, if your space is larger than 300 square feet, you may be doing yourself a disservice by using the simplified method.
On the other hand, the time and effort to figure the deduction using the actual expense method may not be worth it. You may have multiple utility bills for items such as electric, oil, water, and other utilities that require really good recordkeeping throughout the year, something you may not choose to do.
If your business isn't profitable, it doesn't pay to use the simplified method because you won't get any tax benefit. There's no current deduction and no carryover in this situation.
Unfortunately, the only way to really know which method is better is to keep records throughout the year and then, at tax time, see which method produces the better result.
The deduction, figured under either method, cannot exceed “gross income” from your home office activity. More specifically, if your gross income from the business use of your home equals or exceeds your total business expenses (including depreciation if you own your home), you can deduct all your expenses related to the business use of your home. But if your gross income from the business use is less than your total business expenses, your deduction for certain expenses for the business use of your home is limited.
If you own your home and pay real estate taxes in excess of the cap on itemizing the deduction for state and local taxes ($10,000, or $5,000 for married persons filing separately), referred to as the SALT cap or limitation, then in making an allocation of these taxes to home office use, you have to determine whether the taxes are or are not subject to the limitation of gross income from the home office activity (“gross income limit”). The SALT cap makes the computation of the home office deduction more complicated when you figure your actual expenses.
Example
You have real estate taxes of $5,500, no state income taxes, and use 1/10 of your home for business. Because your SALT is less than the $10,000 cap and your other itemized deductions do not in total exceed your standard deduction, you opt to take the standard deduction. In computing your home office deduction, you can use 1/10th of real estate taxes, or $550. This is subject to the gross income limit on the home office deduction.
Example
You have real estate taxes of $5,550 ($5,000 allocated to personal and $550 allocated to business) and state and local income taxes of $5,000. Your other itemized deductions are high enough to itemize but you don't exceed the SALT cap. So again, $550 for real estate taxes is part of your home office deduction but it is not subject to the gross income limit on the home office deduction.
Example
Same as above ($5,000 of real estate taxes allocable to personal; $550 to business) except your state and local income taxes are $8,000 so you do exceed the SALT cap. In this case, you still get to use the $550 in real estate taxes in computing the home office deduction, but here, the $550 is subject to the gross income limit on the home office deduction.
Your deduction of otherwise nondeductible expenses, such as insurance, utilities, and depreciation (with depreciation taken last), allocable to the business is limited to the gross income from the business use of your home minus the sum of the following:
If you are subject to the gross income limit, you may be able to use the deduction in a future year, as explained next.
If your gross income from the business use is less than your total business expenses, you may be able to carry over the unused amount and deduct it in a future year. Under the actual expense method you can use the deduction next year if you have sufficient gross income from your home office activity next year.
Example
In 2019, you figure your home office deduction to be $2,248. However, 2019 is a loss year for you; you have no gross income from the home office activity. In 2020, you become profitable and have gross income of $52,000. You can use the carryover, as well as a deduction for 2020 home office expenses.
There is no time limit on the carryover, so if your income isn't sufficient next year, you can continue to carry over the unused amount to future years. You lose the carryover once you no longer have a home office business. However, you don't have to have the same home office to use up the carryover. If you move to a new home and maintain a home office in your new home, you can use the carryover as long as you have sufficient gross income for the offset.
Did you know …
No carryover is allowed if you figure your deduction using the simplified method. So using the simplified method reduces your recordkeeping because you don't have to remember that you have a carryover, but a good write-off is wasted.
The home office deduction has been called an IRS audit red flag, meaning that it attracts IRS audits. This isn't necessarily so, given the fact that so many businesses now operate from home. There are no statistics from the IRS on their audit activities with respect to the home office deduction. However, if you still have concerns, you can take certain actions that will help you in the event your home office deduction is questioned by the IRS:
Once you qualify for a home office deduction, certain other tax breaks fall into place. Your home is your place of business, so travel from and to home on business is not viewed as nondeductible commuting. Instead, the cost of getting from home to see a customer, make a bank deposit, mail a package, take a continuing education course, or buy office supplies becomes tax deductible (see Chapter 5). The return trip is also deductible.
However, if you use the actual expense method to figure the home office deduction for a portion of your home used for business and you own your home, there's a downside. While you add an allowance for depreciation into your home office deduction, you then are subject to depreciation recapture when you sell your home at a profit. The depreciation you've claimed becomes taxable at the rate of 25% when you sell your home, even if you're otherwise entitled to claim the home sale exclusion for gain (up to a set dollar amount) on the sale of your residence.
When it comes to paper, cleaning supplies, materials for the work you do, and items you sell to customers when you provide services, such as a new circuit breaker box when you do electrical work for homeowners, all of these things are tax deductible.
Don't buy more material and supplies than you need. You'll have to store them and items can go bad or become obsolete. For example, if you buy a number of toners for the printer you're using, they become useless to you if you replace the printer with a new one.
It makes good business sense to take advantage of buying discounts. For example, the price per item may go down as you buy in volume. Remember, however, that you're tying up your money in items that won't be used immediately and you have to store what you buy.
From a tax perspective, determine whether the materials and supplies are incidental or non-incidental.
From a business perspective, only buy as much of the items as you expect to use within the coming year so you don't invest dollars now that won't be used for a long time to come. You'll see later in this book that stocking up within limits is a good year-end tax strategy (see Chapter 12).
When you buy items for your office, you can write off the cost using a number of tax rules listed here and discussed in the following:
Did you know …
You can create good cash flow just by buying items you need for business if you write off the cost with the Section 179 deduction or bonus depreciation. This is because you can take the deduction without regard to whether you've paid for the item in cash or financed the purchase with a loan or paying by credit card.
Example
In December of this year you buy a $2,500 computer and charge it to your credit card. You receive the credit card bill next year and pay it then. You get the deduction this year to save you taxes even though you don't pay for the computer until next year.
These write-off options don't affect what you can ultimately deduct, which is the cost of the items. They merely impact the timing of deductions, whether you claim the write-off up front or spread them over a set number of years fixed by the tax law.
This lets you deduct the cost of the items in the year you place them in service. You have to elect this deduction rule; its application isn't automatic.
“Placed in service” means the year in which they are ready to be used in business and not merely on order, even if you've already paid for them.
Example
In December 2019, you order office furniture and charge the purchase to your credit card. The furniture is delivered six weeks later, on January 25, 2020. Because the furniture is placed in service in January, you cannot deduct the cost in 2019; the deduction will be allowed in 2020.
Property for which the Sec. 179 deduction can be claimed includes more than just furniture and fixtures. It's all tangible personal property, such as machinery and equipment. And it also includes certain qualified real property, which is improvements to the interior of a commercial building, and certain business components (roofs; HVAC; fire protection systems; and alarm and security systems). It doesn't include any enlargement of a building, elevators or escalators, and any internal structural framework of a building.
The deduction for all of the items you purchase this year is limited to a set dollar amount. For 2019, the dollar limit is $1,020,000 (it may increase after 2019). For most self-employed individuals, this limit is more than adequate to cover most purchases for the year. You can take the deduction every year in which you buy items for your business; there's no lifetime limit.
Technically, the dollar limit phases out when total purchases of equipment (e.g., furniture) and machinery exceed another dollar limit. Then the deduction amount is reduced dollar for dollar for each excess dollar of purchases until the deduction amount disappears. As a practical matter, it's unlikely that as a self-employed service provider you will exceed the limit, but just so you know, the threshold at which the phase-out of the deduction limit begins is $2,250,000 in 2019. This means that the first-year expensing deduction is fully phased out if total purchases for 2019 exceed $3,570,000.
Here are some other pointers about the Sec. 179 deduction:
Bonus depreciation is another first-year allowance that can be deducted for qualified property placed in service. For 2019, bonus depreciation is 100% of the cost of the property. This 100% deduction is scheduled to decline to 80% in 2023, 60% in 2024, 40% in 2025, 20% in 2026, and zero in 2027 and beyond. Of course, Congress may change these percentages.
Qualified property for purposes of bonus depreciation includes new or used tangible personal property (e.g., office furniture, tablets), as well as other property not usually relevant to a self-employed service provider (e.g., film, television, and theatrical production costs; plants bearing fruits and nuts).
Bonus depreciation applies automatically. However, you can opt not to use it. For most self-employed individuals, there's really little reason to waive the deduction. If you're not profitable but have purchased eligible equipment, you can still benefit from the deduction because it increases a net operating loss (see Chapter 4).
Depreciation is an allowance that spreads the deduction for the cost of items over a period fixed by tax law. If you use software to figure your taxes or leave it to a tax pro, the deduction for depreciation is figured for you after you provide certain information:
However, so you understand how depreciation works, here are some important details.
Office furniture, fixtures, office safes, and most other equipment are treated as seven-year property. Annual deductions are figured using a percentage each year that essentially frontloads your write-offs. Because of certain special rules, called conventions, the seven-year recovery period actually works out to eight years. This period may be longer or shorter than your actual use of the items, but this is the period you have to use for regular depreciation.
The percentages for furniture and fixtures in your office usually are the rates found in Table 6.2. These rates are based on a convention called the midyear convention.
Example
This year, you buy furniture for your office that costs $4,000 and you don't write off the cost using first-year expensing or bonus depreciation. Your depreciation deduction this year is $571.60 ($4,000 × 14.29%). Next year, you deduction will be $99.60 ($4,000 × 24.49%), and so on.
Table 6.2 Depreciation Rates for Furniture and Other Seven-Year Property
Year | Rate |
1 | 14.29% |
2 | 24.49% |
3 | 17.49% |
4 | 12.49% |
5 | 8.93% |
6 | 8.92% |
7 | 8.93% |
8 | 4.46% |
If you buy a certain amount of furniture and other equipment and machinery in the last quarter of the year, instead of the percentages listed in Table 6.1, a different convention (called the mid-quarter convention) comes into play. It changes the applicable rates for depreciating all of the purchases during the year.
Instead of using these percentages to frontload your write-offs, at your election, depreciation can be taken in equal amounts (this means using a straight-line method that creates mostly even deductions over the applicable period for the items).
Example
You buy furniture that costs you $4,000 and you don't write off the cost using first-year expensing or bonus depreciation. Divide the cost, $4,000, by the applicable recovery period of seven years. Your deduction in year 1 and year 8 is one-half the usual amount, or $285.71. The deduction in years 2 through 7 is $571.42 annually.
You can find IRS tables listing the depreciation percentages in Publication 946, How to Depreciate Property, at IRS.gov.
Because regular depreciation goes on for a number of years, it's up to you to keep track of this write-off every year. Again, if you use the same computer software for tax preparation, it will remember this information for you. The same is true if you use the same tax return preparer each year; he or she will keep track of your depreciation.
When you start a business, you may already have a desk, chair, and other items that you'll be using in your business. From a business standpoint, why buy new when you already have what you need? Conserve your cash for other purposes.
From a tax perspective, putting personally owned items to business use means you can't write off the cost using first-year expensing or bonus depreciation. You can depreciate the items. The basis for depreciation is the lower of its adjusted basis (usually its cost) or its fair market value at the time of conversion to business use. Fair market value is usually what an item is worth to someone else (i.e., what you could get if you sold it now).
Example
Several years ago you bought a desk and chair for $900. You now convert it to business use when its fair market value is $400. You can depreciate $400, which is the furniture's fair market value, because this is lower than its cost.
Today almost every business runs on or uses computers and mobile devices. All of your computer-related costs usually are deductible.
When you buy computers, tablets, printers, and other devices, you can write off your costs using the same methods applicable to furniture, discussed earlier. Keep in mind the amount that you can depreciate if you convert personal items to business use. There are differences to note:
Table 6.3 Depreciation Rates for Computers and Other Five-Year Property*
Year | Rate |
1 | 20.00% |
2 | 32.00% |
3 | 19.20% |
4 | 11.52% |
5 | 11.52% |
6 | 5.76% |
* Different rates apply if more than 40% of all equipment placed in service for the year is done in the last quarter of the year.
Example
You buy a tablet costing $1,200. You elect to use the de minimis rule and deduct $1,200 in the year you buy it and begin to use it in your business.
The write-off for the cost of off-the-shelf software depends on the life of the software. If it is useful for only one year, as in the case of tax preparation software, you can deduct it in full in the year you buy it.
If the software has a longer useful life, such as programs you buy for accounting or word processing, it is deductible in the same way as computers. Thus, you can expense the cost.
The cost of cloud solutions that you pay for on a monthly basis is deductible in full. Because you don't own anything, there's no depreciation or other special write-off rules involved. The subscription cost is simply an ordinary and necessary business expense.
The costs of apps you use on your mobile devices are also deductible.
Your data is too valuable not to protect. The best protection is to back it up regularly. If you keep files and other data on your computer, it's up to you to back up your data. If you operate in the cloud, there's no need for backup; everything is already stored in the cloud. So, the rest of the discussion here is for the backup you have to undertake.
Backup may be done by you to a remote location or handled automatically with a backup service, such as Carbonite. Automating the process is smart so you are sure it gets done.
The cost of backup is deductible as an ordinary and necessary business expense. There's no dollar limit on what you can deduct.
From a business perspective, shop around for good backup. Make sure that you can easily recover anything that is lost because of a computer crash, ransomware, theft, or other catastrophe. Also comparison shop because costs may vary depending on the amount of data you back up.
The cost of an IT service that maintains your equipment on a regular basis or the cost of repairs when something goes wrong is deductible in full. However, make sure you know the difference between ordinary repairs and capital improvements. In some cases, the distinction is easy to see; in others, it is not.
Example
Repairing a photocopying machine that continually jams is an expense that is currently deductible. Replacing a hard drive in a computer so that it is good to go for many years to come is a capital improvement, the cost of which is treated the same as if you'd bought a new computer (i.e., the cost is recoverable through the write-off methods discussed earlier).
Insurance is one of those things you don't like to pay for because you never know if you'll ever need it. However, it's good business practice to protect yourself as much as possible. For your office, talk with a knowledge insurance person who can advise you on the coverage you need.
If you work from home, don't assume that your homeowner's or renter's policy will protect you. The limitations on these policies may exclude protection for business property or provide such dollar caps as to not be helpful. For example, your homeowner's policy may limit recovery for theft or damage to computers and related equipment to $2,000. If your equipment is worth $10,000, your homeowner's coverage is inadequate.
Fortunately, you can easily address the limitations in your existing policies by:
You may have a variety of utilities related to your office. If you claim a home office deduction, utilities become part of that deduction. If you have a separate office, you separately deduct utilities on Schedule C. Examples of deductible utility costs include:
Not everything you buy for your business falls neatly into a category you'll find on Schedule C. You can deduct any ordinary and necessary business expense related to your office. You'll find the terms ordinary and necessary defined in the next chapter.
Here is a list of some of the types of miscellaneous costs you can deduct—currently or through depreciation:
You've seen the specific deductions you can claim for driving your personal vehicle for business as well as travel and meal costs (Chapter 5) and for office-related expenses (this chapter). But these expenses are only the tip of the iceberg when it comes to running your business. Your business may have myriad costs, from advertising to Zooming.
In Chapter 7 you'll see how to handle these other costs.
Chapter Takeaways