The purchase of materials for one’s own office, as well as the furnishings for the office, are expenses that should not be underestimated – especially for entrepreneurs and the self-employed. In particular when setting it up for the first time, self-employed people may face high costs. In order to keep them low, it is of course advisable to offset the corresponding purchases against tax. After all, these are materials that are necessary for one’s own work and are therefore usually tax-deductible. However, there is a lot to keep in mind, just like with many other forms of tax relief.

Is it worth to offset office equipment against tax?

Die Entlastung bei der Steuer soll dazu ermutigen, dass besonders die Unternehmer, die noch am Anfang stehen, keine zu hohen Kosten dafür haben, dass sie überhaupt mit ihrer Tätigkeit beginnen können. / Foto: StockPhotoPro / fotolia.com

The tax relief is intended to encourage entrepreneurs, especially those who are still at the beginning, not to incur too high costs in order to be able to start their business in the first place. / Picture: StockPhotoPro / fotolia.com

Many young entrepreneurs, students and freelancers forego the opportunity to deduct their work equipment and office supplies from their taxes. However, this is a mistake. Anyone who has ever made a purchase to stock the office with the necessary materials knows how expensive such a thing can become. The tax relief is intended to encourage entrepreneurs, especially those who are just getting started, not to incur excessive costs in order to be able to start their business in the first place. The reason that so many people nevertheless forego is because of the mistaken belief that the expense behind the tax deduction is much higher than the benefit.

In fact, many work equipment and office supplies can be at least partly tax-deductible. For example, specialised literature that is directly related to one’s own work is deductible and so is a car that is also used for work. Incidentally, these options are not only available to entrepreneurs, freelancers, and start-ups. Trainees and students also can deduct a variety of their work equipment from their taxes and save money when purchasing these expensive products.

The most important thing here is to familiarise oneself with the individual aspects that relate to tax deductibility. For an entrepreneur, for example, a distinction is made between those things that can be directly deducted and purchases that have to be depreciated over a fixed period of time. At first, the matter may seem complex, but it is relatively easy to become familiar with.

What kind of equipment is tax deductible?

In general, the legislator and the finance authority are quite accommodating when it comes to the deduction of working materials and equipment. As a rough guide, everything that is necessary for the daily and permanent operation of one’s own business can be deducted. In the case of equipment, this includes, for example:
Office desk, office chair, desk lamp and similar items around one’s own workplace.
Filing cabinets and similar equipment for storage used in the office.
Carpets, simple décor, conference furniture and similar items, within an appropriate budgetary.

Everything that is needed for an office nowadays can also be deducted from tax in the end. The tax authority only checks the individual in rare cases. However, one should make sure that the purchases remain within acceptable limits. Anyone who wants to deduct an ergonomic comfort chair from tax as a piece of office furniture may be confronted with critical questions from the tax authority.

Which office materials are tax deductible?

Auch Fachliteratur kann von der Steuer abgesetzt werden. / Foto: TIMDAVIDCOLLECTION / fotolia.com

Technical literature is also tax-deductible. / Picture: TIMDAVIDCOLLECTION / fotolia.com

The purchase costs of materials for daily work are far lower than, for example, pieces of furniture. In this case, however, it is especially about quantity. Over a year, many pads, pens, calculators, printing paper and similar items may be purchased. Here, many of these things can be deducted from tax too. Incidentally, this also includes things like technical literature. Thus, a subscription to the trade journal of one’s own industry can certainly be seen as literature. So, if a programmer wants to receive the popular trade magazine of the industry every month, this is tax-deductible as literature. The same applies if a laptop is required for work or if one buys a printer.

The intricacies between deduction and depreciation

In the end, the challenge is not really about finding as many loopholes or things as possible that can be deducted from tax. One reason why so many freelancers and entrepreneurs refrain from doing so is that the rules for deductions seem complex at first glance. In fact, however, it is quite simple:

Items with a net purchase value of less than €410 can be directly deducted from tax.

If the value of an item, e.g., a desk, is above these €410, it must be depreciated over a fixed period. In this specific case, it would be 13 years. The value of the desk is therefore divided by 13 and can be deducted at this rate every year.
In addition, there is the possibility of using the compound item for low value goods. These can be written off over 5 years if the value is between 150 and 1000 euros.

It can be a little complex at first to get to know the intricacies of deducting business supplies and office equipment. Therefore, it can be worthwhile to seek the help of an expert, such as an accountant, for these questions. He or she knows the exact periods for depreciation and can also inform you about which of your own purchases can also be deducted from tax. The costs for a tax accountant are quite low, especially in the case of start-ups with low turnover. For this reason, it is worthwhile to get tips from these experts initially when founding your own business.

Always keep track of purchases and store receipts

Wer von den Vorteilen profitieren möchte, die damit verbunden sind Materialien von der Steuer abzusetzen, muss auch in den eigenen Unterlagen Ordnung halten. / Foto: prachid / fotolia.com

Anyone who wants to benefit from the advantages associated with deducting materials from tax must also keep their own documents organised. / Picture: prachid / fotolia.com

One of the biggest problems with tax issues for founders and entrepreneurs is not related to the question of deductibility but rather to a lack of order in one’s own documents. If you want to benefit from the advantages of tax deductibility of materials, you also have to keep your own documents in order. This includes, for example, a precise overview of one’s own purchases. It is also important to keep the receipts associated with the purchases.

This is the only way to be able to provide the relevant receipts in case the tax authorities ask for them. Often there is a lack of organisation in the first few years which is only noticed after the first difficulties. Those who organise their own papers well from the beginning will also benefit more from tax deductibility in the end.

The post "Offset office supplies and equipment against tax – the rules" written by:

Sophie Voigtländer

Sophie joined deskonia at the beginning of 2021 and since then she is mainly responsible for translating all possible texts into English.

She studied International Communication and Translation.

see all posts by author