What You Should Know About Office Furniture Depreciation
Quality office furniture can be very expensive. And while you may be putting a hefty amount of money into investing in immaculate new office furniture for your company, you should think about the depreciation and resale values before you pull out your business credit card. Here’s what you need to know before spending thousands to upgrade your office furniture.
What is Depreciation?
Come tax time, your accountant will take a look at all of your expenses and determine what you can count as a write off. The more write offs you have, the less taxable income you have and the more money you get to keep. With some items, instead of getting written off completely, your accountant will use the item’s depreciation value to determine how much you can write off on your taxes.
What’s the Depreciation Value of Office Furniture?
In order to calculate the depreciation of your piece of furniture, you need to take the total, not including sales tax, and divide it by its average life expectancy. For example, if you paid $400 for a standing desk that you expect to last you five years, you would divide 400 by 5. That comes out to $80. That means you can write off $80 each year for the next five years for that single desk.
What About Reselling it?
Depreciation doesn’t only apply to taxes though. If you’re thinking about buying new furniture and then reselling it in the future to recuperate your costs, that’s not the best way to go about saving money. Much like a car, used furniture quickly drops in price after it’s sold and been broken in a bit. The resale value isn’t very high, and you likely won’t get anywhere near what you paid for the pieces when they were brand new.
If you’re set on purchasing brand new furniture, go for something practical that you’ll use for a long time. Don’t buy something just because it’s trendy or because you think you need it. Look into what your employees’ needs are and determine what furniture to get based off of what’s practical for your business’s needs.
How to Save Money on Office Furniture
So, if you’ve decided you don’t want to splurge on brand new office furniture, opt for used furniture! It’s often just as good at just a fraction of the price. You can feel confident that your purchase is the best option for both your employees and your business bank account.
If you’re in the market for beautiful, high-quality, used furniture, contact us today or stop by and visit our showroom! We would love to show you some of our favorite pieces and help you determine what furniture is best for your business and its employees! We’re also running a special discount for our newsletter subscribers through December 24th, so make sure to sign up and snag the sale!