If you are working from home, you’re going to need to set up a professional office and you may be wondering whether your home office chair qualifies for a tax deduction.
Well, as with everything that involves the IRS, it’s a bit complicated but yes, you can deduct your home office chair in certain circumstances.
Capital Costs Vs Tax Deductions
The IRS doesn’t allow you to spend a fortune on a home office and deduct it from your taxes.
The current limit is $5,000 when you start your business, if you run over that – you’re likely to have to treat the equipment you buy as a capital cost, and then there are some really complicated rules on how tax works.
You are also only allowed to buy items for the office that are necessary and used in your business.
That means you can buy things like those listed below as part of the $5,000 deduction:
- A desk
- A chair (or chairs)
- A coffee table or regular table
- Appliances for the office
- Computers and peripherals
Now, this isn’t an exhaustive list of items that you can buy to put in a home office and get a tax deduction.
In fact, the IRS is going to consider an item “necessary” based on your circumstances which may be influenced by your line of work, or the products or services you sell.
But, if you want to sense check whether it’s going to be OK you should ask:
- If I buy this, will it be essential to running or growing my business?
- If I were to visit my competitors would they, most likely, have this item?
If you think you can say “yes” to both questions the odds are pretty good that the IRS would be fine with it – though you should talk to an accountant about how best to categorize and qualify any individual item too.
Important Notes Re Home Offices And Tax Deductions
You should also note that if you have another office, the IRS will only allow you to write off the expenses for one office, not both.
This also includes co-working space fees, you can’t claim for your home office and a coworking membership.
Though you can claim for a home office in April and then a coworking space in May.
There is also a requirement that you work from home at least once a month, otherwise, you don’t use the office enough for it to be a dedicated “office” for tax purposes.
Some accountants say it would be better to demonstrate that you use the office weekly, not monthly.
However, it is worth noting that there’s no requirement to use a home office all year long – if you were forced out of the office by Covid and into home for a few months, it’s fine to claim for that, even if you then went back to the office.
You must also ensure that any home office is used as an office and not as part of your home too, otherwise, you won’t be putting that home office chair down for a tax deduction.
Note: this doesn’t mean that you have to have a whole room exclusively designated as an office, it means that the furniture must be for business use. So, desks and office chairs are fine – beds and beanbags may not be, unless you sell beds and beanbags.
What About If I Am An Employee?
Sorry, there are no tax deductions available for home office furniture for employees (that is those with W-2 status).
The good news is that you shouldn’t be paying for your home office set up in the first place, talk to your employer about what you need and then get their agreement for you to expense it.
No outlay of any kind is usually better than a tax deduction.
So, there you have it, you might be able to get a tax deduction for your home office chair, though we stress you should always consult your accountant before making any major investments for your business.
And if you’re looking for eco-friendly options check out our list of sustainable office chairs here.