top of page
  • amanda7794

Tax-Deductible Home Office Updates for Small Business Owners

Being a small business owner comes with many challenges. Being an entrepreneur or sole proprietor comes with a lot of risk and the potential for a lot of reward. It is important to always be cautious when operating your own business. First and foremost, make sure that you have appropriate insurance coverage to safeguard your business. There are many costs associated with running a business, so Insuravita knows it is important to get you the most cost-effective insurance policy possible. We are also always looking for additional ways to help you save money. This article shares ideas for tax-deductible home office expenditures.

As a small business owner, especially one working from home, it can be hard to force yourself into productivity. With the couch so close, it's a wonder anything ever gets done. You can combat this problem by updating your home office and creating a space that's comfortable and functional. On an added note, make sure to get adequate insurance coverage from Insuravita.

Formalizing Your Business Structure

If your business is still in its infancy, you'll need to formalize your business structure. You should start this process by looking at the most common business structures. Compare these and determine which is best for you. This may sound like a lot, but if you need to learn how to form an LLC, online services are available to help you with this process and stay compliant throughout the year. You can usually write this off as a start-up cost.

Home Office Deductions

You can write off your home office costs if this office gets exclusive and regular use and is your principal place of business. Whether your home office improvement is tax-deductible is based on how the IRS classifies the expense.

Improvements can be either direct or indirect expenses. Direct expenses are fully deductible and include improvements only inside your workspace. Indirect expenses are improvements that benefit your entire home including your office—for example, a furnace repair. These expenses are partially deductible based on the percentage of the home your office occupies.

Tax-Deductible Improvement Ideas

These improvements could be tax-deductible because they apply only to the business part of your home.


One of the easiest home office updates is a new paint job. You may be tempted to play it safe and pick a neutral tone, but it may be a better idea to go with some color. Color psychology suggests that blue, green, yellow, and red are good for office settings to boost productivity, energy, and optimism. That being said, it's probably not a good idea to paint your entire office bright red. If you decide on a bold color, look for subtle ways to incorporate it, such as an accent wall.

Update Your Furniture

The furniture in your home office should be comfortable; you won't be productive if you're thinking about your back pain all day. Your primary seat should be of good quality, but it's always a good idea to give yourself options. A nice chair at your desk, a cozy chair in the corner, and a standing desk give you the opportunity to move around your office throughout the day.

Get Multiple Lighting Options

When you're spending all day in your office, you may not want (or need) harsh overhead lights all day. A fun lamp, string lights, or colorful light bulbs can work wonders in keeping you relaxed and productive in your workspace. If you tend to work long hours or nights, consider a sun lamp. These lamps may help combat sluggishness and seasonal affective disorder.

Enjoy Your New Office

The most important factors in a home office update are comfort and function, but it's a bonus if the cost can be deducted from your taxes. Have fun, make the space your own, and get to work.

We hope that these tips are helpful for you! For many of us, working from home is part of our new normal. And for small business owners, it is essential that this home work space is comfortable, functional, and set up for success. Making adjustments can be costly, but these changes are an investment in your company. And, best of all, they may qualify as tax deductions. As you think about redesigning your space, it's a great opportunity to also evaluate your small business insurance. Do you have the coverage you need at a price that works for you? If you are wondering what else is out there, let Insuravita help.

5 views0 comments
bottom of page