Eight Dollar Blog

A home office deduction relates only to the real estate and utilities for the office, and not for the furnishings and equipment used in it. However, such furniture and equipment can be depreciated. The rule is: Furniture, whether you qualify for a home office deduction or not, is depreciable only to the extent that you use it for business.13

For example, say you work at home and you use a desk 80 percent of the time for business. Even though you don’t claim a home office, 80 percent of that desk becomes depreciable. If you sit on chairs, use desk lamps, computer equipment, file cabinets or bookshelves, these can also be depreciated if they are used to conduct business.

How do you depreciate furniture and equipment so you can deduct it?
First, you must keep good tax records, as we have already emphasized. By doing so you can determine, within a 90-day period, what percentage of your time is spent in business and personal use and then use that time to help figure what percentage of the desk, chair, carpeting, lighting, equipment, etc., that you can depreciate. Second, determine the depreciation amount allowed for the item. This amount is the lower amount of the original cost, or today’s market value.14 So let’s say you have an antique desk you bought three years ago. It cost you $500 and today it’s worth $550. The amount you can write off for that desk is the lower of the two figures.

This depreciation rule assumes you work your business regularly, emphasizing once again how important it is to give your business, even if it’s part-time, consistent efforts.15

Taken from : Money Mastery “10 Principles That Will Change
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