How Does Office Fitness Figure Into Your 2019 Income Tax Strategy?
Whether you’re debating which sit-stand desk or treadmill desk model to spend your tax refund on or thinking of ways to reduce your next tax bill by investing in new office equipment, now is as good a time as any to take the plunge. If you operate a business or earn a significant portion of your living working from your home office, your purchase of a standing desk or treadmill workstation is likely to be 100% tax deductible.
Of course, it’s always best to verify this with your own qualified tax professional. Here are some additional things to ask about if you’re looking to acquire office-fitness equipment as a business:
IRS Section 179 Accelerated Depreciation
Every year Congress lets the Section 179 economic stimulus program sunset, only to bring it back at the very end of the following year. For the 2019 tax year, like in 2018, the Section 179 deduction limits have been set to $1,000,000 and the capital equipment spending cap to $2,500,000. Typical limits prior to 2018 have been between $25,000 and $500,000 so this is definitely a dramatic increase intended to stimulate capital equipment spending in this tax year.
The problem is, Section 179 only applies to new equipment put into use in the current calendar year, which would be fine if Congress would give buyers enough of a time window to actually purchase, receive and install the equipment before December 31st. As with many similar issues, this has not been their habit. Click here to learn everything you need to know about the 2019 limits on Section 179 tax deductions.
Since desks and treadmill bases can sometimes take a few weeks to ship (especially in the peak season of December, when popular fitness-related products are often back-ordered), it’s important not to wait until too late in the year to buy if you want to benefit from the accelerated depreciation in the current year.
Note: For Section 179 treatment the equipment must be depreciable under the Modified Accelerated Cost Recovery System (MACRS) and have a depreciation recovery period of 20 years or less. So, buildings aren’t included but office furniture definitely is.
Leasing vs. Buying
If you’re purchasing more than $10,000 worth of equipment, consider leasing instead of buying. Numerous leasing configurations are available, and lease payments are 100% expensible. If depreciating as capital expenditures, most accounts would ascribe three years straight-line depreciation on the treadmill or the entire treadmill desk workstation.