In addition to paying for rent, furniture and other fixed office expenses, many entrepreneurs also incur miscellaneous expenses like printing and postage. Even though miscellaneous office expenses are typically low value, over the course of the year these costs can add up. Since these expenses are an ordinary and necessary part of operating your business they are deductible on your Schedule C and should not be overlooked when you prepare your taxes.
Joseph is a property owner who rents out the guest bedroom in his primary residence through Airbnb. Last year Joseph spent $300 on miscellaneous office supplies he used in connection with his rental including ink for his printer, folders, pens and paper. Even though Joseph doesn't have a dedicated office or take the home office deduction, he could still deduct the $300 of office expenses on line 19 of his Schedule E since he incurred these costs operating his rental.
Chloe is a freelance writer who drafts blog posts and articles from a dedicated work space in her basement. Each month Chloe spends approximately $45 on legal pads, post-it notes, binding clips, white out and fancy pens. At the end of the year Chloe could deduct the cost of all of these supplies as office expenses on line 18 of her Schedule C.
Austin is a professional photographer who rents a studio downtown where he photographs his clients and edits his pictures. When Austin moved into the space he purchased $4,000 of camera equipment, a $500 desk, $300 chair, two $500 rugs, a $15 lamp and $125 of miscellaneous office supplies. When Austin prepares his taxes, he would want to classify his camera equipment, desk, chair and rugs ($5,800) as assets and depreciate these items. He could deduct the $140 he spent on office supplies and his lamp as office expenses on his Schedule C.
Cindy is an independent insurance broker who works from a coworking space. Cindy constantly sends proposals, settlements and thank you notes out to her clients. Last year Cindy spent $2,000 on postage. Since these costs were necessary to Cindy's business she can deduct them as office expenses on line 18 of her Schedule C.
Daniella is a real estate agent who has a qualifying home office. Last year, $500 of her home operating costs could be attributed to her office. She also spent $600 on ink, paper, folders, pencils, paper clips, a paper shredder and a calculator. Daniella notified her accountant she wanted to deduct $1,100 for her home office ($500+$600). Luckily for Daniella, her CPA has an eye for detail and notified her that she would need to deduct the $600 spent on miscellaneous office supplies separately as an office expense, rather than include them as part of her home office deduction.
