Inclement weather can result in unexpected expenses such as the removal of several feet of snow on driveways and walkways for home-based small business owners, but this expenditure is among many tax breaks for maintenance.
Small business owners who operate out of their homes and dealt with the hassle of purchasing de-icing salt or hiring a company to shovel around their offices can deduct the expenses based on the percentage of the home that is used for the business, said Rebecca Pavese, a CPA and financial planner with Palisades Hudson Financial Group, the Scarsdale, N.Y.-based financial planning firm.
Common Tax Breaks
While the most common expenditures include utilities, property taxes, mortgage interest and insurance, home maintenance is also a “broad indirect expense” that benefits your office, Pavese said.
“Home maintenance includes the housecleaning of your entire home, furnace repairs, snow removal and pest extermination fees among others,” she said.
The easiest way to calculate the amount of business deductions from a home is based on the size of an office, said Richard Feldman, a partner at Margolin, Winer & Evens, a Garden City, N.Y. CPA and business consulting firm. A self-employed graphic designer with a studio of 300 square feet in a house measuring 3,000 square feet can deduct 10% of certain home expenses.
Among other expenses, a business owner could take a 10% deduction of snow removal costs from their driveway following a winter storm “if the driveway is also used for employees or clients,” he said. “As you can imagine, these deductions really add up.”
The deduction for snow storm-related services can be expanded if a driveway is used for customer parking or a walkway for the home office are separate entrances, said Grafton “Cap” Willey, managing director of CBIZ MHM, a Cleveland accounting and professional services provider.
Small business owners who stay on top of their bills each month could save thousands of dollars as the overhead for operating a firm can add up quickly.
“Make sure to keep track of all direct expenses and which are expenses incurred just for the business portion of your home,” he said. "Some examples of direct expenses include painting the office and other repairs to the office, which can be deducted in full.”
Entrepreneurs who use their home to meet clients or customers on a regular basis can also include a portion of their lawn care expenses, Pavese said.
“You may also take a depreciation expense for a portion of your house or condo if you own it,” she said.
Other common business-related expenses include highway tolls, homeowner association fees, parking, subscriptions and professional dues.
“HOA fees for office space are deductible, but it would have to be apportioned based on the square footage of the office space versus personal space,” said Willey.