Even if you have already filed your taxes for 2012, it’s not too late to start planning for your 2013 filing. In fact, now is the perfect time to get on board (in case the rules change…). The IRS currently allows small business owners and entrepreneurs who work from a dedicated home office to take certain deductions that it doesn’t permit otherwise. That means you can still tackle a tax-deductible DIY project and potentially lower your tax burden.
You may be asking yourself: “Ok, well, what exactly does ‘dedicated home office’ mean?” According to the IRS, a dedicated home office is one you use “exclusively and regularly” for your principal place of business or the place you routinely deal with customers, clients or patients. If you are self-employed or work exclusively from home, you are potentially missing out if you have a dedicated home office but don’t work the deductions to your benefit.
You should always consult a tax professional before undertaking large projects to ensure you claim them correctly; however, here are a few projects to get you started on your savings for next year. Here is a list of tax-deductive DIY projects for your business home office.
The IRS allows deductions for “cleaning services” in your home office. However, it doesn’t state that you can’t provide these services yourself. Although you may not be able to claim a deduction for the labor (since you’re virtually paying yourself with your own money) you will save by keeping those fees in your pocket. Additionally, you will be able to write off the entire cost of the equipment rental.
Give yourself the weekend to complete this project. Rent a carpet cleaner from your local home improvement or hardware store (many grocery stores carry them as well), along with buying appropriate shampoo, and you’re all set. Remove all furniture from the room and do not return it until the carpet is thoroughly dry. You can speed up this process by opening your windows and letting some of that outdoor wind power help out, or simply turning on a floor or ceiling fan. Make sure to wipe down the outside of the machine and rinse out the water reservoir before returning it to the store to avoid additional costs.
Create Your Own Artwork
Another blanket category where you can claim home office deductions is “decorations.” A great way to add a custom pop of color to your office is to create your own artwork. Even if you’re not Picasso, you can still contribute a great piece to your wall collection.
Start by picking two or three different colors, or shades of the same color, that will work well with your office decor. Go to your local craft store and purchase a canvas and some craft paint, along with a couple of different sized brushes, and get to work! Your creativity is the limit here, so, whether you decide to paint stripes, swirls, color patches or blocks, just put yourself into it and see what you come up with!
An additional aspect to room decor would most certainly be a potted plant. Why not improve your air quality while you improve your economic standing next April? Pick plant options based on the amount of light in your office whether it’s natural sunlight from a window or artificial light from a table lamp and the care you can give them (some plants, like the cactus, fare better than others when left unattended). Use a potting soil mix as opposed to garden dirt to minimize the risk of pests and soil-borne diseases. Finally, always make sure you have a means for proper drainage since it’s easy to over-water office plants.
“Make” Your Own Seating Area
Every waiting room needs somewhere for clients, customers, or patients to sit, right? Why not eliminate some of those hefty retail fees by “making” your own seating area. If you have an old garden bench or futon frame taking up space in your shed, consider sanding it down, staining it and adding a seat cushion or pillows. Alternatively, you could rifle through an estate sale, garage sale or even Goodwill to find one that has been previously enjoyed which can be yours for a fraction of the cost of a new one.
Make sure to wear appropriate safety protection for working with sanders and stains, namely goggles and gloves. Take your work station outside to allow for adequate ventilation and lessened dry time, and lay down a tarp or old sheet beforehand to minimize clean-up. Follow the instructions that come with the sander and ensure you are not near a water source before you plug in the cord. Once you have finished sanding all surfaces, wipe or dust your furniture off before applying the stain. Follow the manufacturer’s directions on the can of stain and ensure the bench is completely dry before bringing it back inside. Finish off this project with some pillows covered in a washable, stain-resistant material.
By thinking outside of the four corners of your tax return, and holding on to all of your receipts, you can make sure you get the maximum amount of allowable deductions next year. At the same time, by investing in your business, you are investing in yourself. And let’s not forget all the great stories you’ll be able to tell your patrons about how you “created” your home office!
What are some of the inventive ways you’ve been able to save money on your taxes by investing in your home office?
[box type=”info” icon=”none”]Mike Tuma is a Home Depot store associate in the Chicago area, where he has been helping customers since 2005. Mike focuses on outdoor living writing, ranging from tips on using a pressure washer to the latest in lawn mowers.[/box]
Tax-Deductible DIY Projects for Your Business Home Office Image Credit
Mario Schulzke is the Founder of ideamensch, which he started a decade ago to learn from entrepreneurs and give them a platform for their ideas.