Office Furniture Tax Deduction

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.

Ben is a freelance management consultant who just opened up his own firm. He works from a space in his home that meets the IRS home office requirements. During the year he purchased a $500 desk and $3,000 computer to be used in his home office. When Ben prepares his taxes, if he doesn't take a Section 179 deduction on these assets he would depreciate the desk over seven years and the computer over five years on Form 4562. He would then record the depreciation on line 13 of his Schedule C.

Angel recently purchased a second property so he could host Airbnb guests on a full-time basis. He spent $15,000 furnishing his new rental property with electronics, appliances and furniture. When Angel files his taxes he would want to add the $15,000 of asset purchases to his balance sheet and depreciate each item over five years using the MACRS general depreciation system. Angel would calculate depreciation on Form 4562 and deduct his first year depreciation expense on line 18 of his Schedule E.

Kenny is an Uber driver who owns a vehicle exclusively used for his rideshare business. Last year, he spent $2,000 on a navigation system for his business vehicle. Rather than depreciate the navigation system consistent with the vehicle, his accountant advised him he would be able to classify the navigation system as a Section 179 asset and deduct the full $2,000 for last year.