As 2019 draws to an end, many businesses are zipping up their fiscal year and getting ready for that one yearly certainty... income tax time.
At Worthington Millwork, we're a small American business too. We understand! Most businesses are just trying to get through the holidays. Between holiday orders, staff vacations and the annual flu season peak in December, this time of year can feel overwhelming for small business owners.
2019 - A Great Year For Small Business
The great news for small business owners is that the US economy did really well this year. GDP increased, personal income increased, interest rates stayed low... it was probably a great year for your company. Congratulations!
Now for the not-so-great news: you might be paying a much bigger tax bill this year. Uncle Sam wants (and deserves) a piece of that pie. Which is why we feel the end of 2019 is the perfect time to invest in your small business space with our American made architectural products.
- We're not tax professionals here, by the way, but we know a thing or two about small business income taxes.
Are Office Improvements Tax Deductible?
- Ask your CPA for the details, but generally, YES!
We think Kevin Johnston of Chron.com says it best: "If you own property for your small business, you must maintain it and improve it from time to time. You may count repairs, remodeling, renovations and additions as business expenses. Some of these business-property expenses qualify as deductions in the year you spend the money if you meet Internal Revenue Service guidelines..."
- Our aluminum railings certainly qualify as necessary safety items for office spaces or rental properties.
- Entrance systems and door pediments count as exterior improvements, especially if yours are in need of repairs.
- Our custom pergolas and patio systems look great at your rentals and business properties too!
How Much Should I Spend on Small Business Improvements?
That's really an question for your tax professional. It will depend on how much income you've made this year and your other costs to operate. Know that any repair you make to your office space will be fully tax deductible, but building additions work differently and will need to be depreciated over time.
We know that your fourth quarter numbers aren't in yet, but you can probably make a good guess as to your overall income so far this year.
What About Home Offices?
Again, verify everything with your accountant first. But as a rule, if you qualify for a home office deduction on your income taxes, you can write off a portion of your home repairs and home improvements too.
If you manage your rental properties from home, you may qualify for tax deductions both at the rental properties you're improving, and a percentage of the improvements you make at your own dwelling.
The Key Takeaway
November and December are excellent months to invest in your business properties! We know it can be challenging to add one more thing to your "to do" list this time of year, but you'll reap terrific financial rewards in terms of your property values and income tax returns.
The key point here is that you need to make improvements to your business spaces during the same year you want to write them off. If you're in need of some great business write-offs for 2019, get those orders placed and paid for by December 31st.
Here at Worthington Millwork, we carry only the finest American-made products. Unlike DIY home stores, we stand behind our products and their warranties. If you'd like to learn more about our gorgeous, American-made millwork products contact us today! We'd love to help you improve your small business spaces.