Setting up a home office takes a bit of planning. You can just setup a desk in a spare bedroom, but you still need to think about finances. And there are taxes. The key here is to separate business from home. But how?
The home office deduction is a subject for another post. The focus here is just specific expenses and supplies.
One great example of commingling supplies is printing. You need to print for home use, and you need to print for business use. How do you deduct the business portion of your printing costs?
Use a separate printer. It’s really that simple. Get a cheap printer (or find a spare one around the house), and dedicate it for business printing. Now you can buy ink for that printer and easily deduct it from business income. The same goes for paper. If you print a lot, this simple step could provide a decent expense deduction at tax time.
Label things. I actually put “business” or “work” labels on things that are dedicated for business use. It keeps supplies clear for my wife and I, and it should help if I ever get audited. The IRS might not believe that one box of envelopes is for business, but hopefully they will if the boxes are clearly marked “business” and “personal.”
Keep ‘em separated. Better yet, keep your business things physically separated from your personal things. Maybe you could put them in a separate cabinet or closet. That will make it even more clear what the supplies are actually used for.
Photo by Paladin27