Neighborhood Garage Door Service of Houston, TX is not a tax service and the contents of this article are not to be taken as professional counsel. Please consult a tax professional before deciding to write off your garage as a business expense.
Garages aren’t just for cars anymore
At one time, a garage was simply a place to store your car while not driving it. Over time, it became a popular storage space in the home. More and more, garage space is being utilized for a variety of purposes. People are turning their garages into extra living space, home theaters, work-out space, recording studios, and home office space.
Many people are aware that they can claim a room in the home as a business expense. This can have the benefit of reducing your tax liability. If you qualify, you may be able to claim a portion of the cost of
- Utilities
- Rent/mortgage
- Depreciation
- Home insurance
- Home repairs
In the case of a garage, you might be using the space as a home office or workshop related to your business. So a common question that comes up is: Can I write off my garage as a business expense? To answer THAT question, you need to ask two other questions first.
Is my garage my principal place of business?
There are two situations that will qualify your in regard to this question.
If you only work in your garage, you’re done. Since you only have one place of business, it is your de facto principal place of business.
If you work in your garage as well as outside the home, you have to consider what you do where. In this case, your principal place of business will be identified as the place where you perform your administrative and managerial duties. If you do these activities in multiple locations, you do not qualify for the deduction.
Do I use my garage regularly and exclusively?
Second, you need to be able to establish that you use your garage regularly for business. Spending a few hours each weekday should qualify you. Using the space infrequently, occasionally, or as a one-off will not qualify you. It must be an ongoing usage.
The use of the space must also be exclusively for your business. This is one requirement that can be tricky for garage situations because the space is so large and versatile. For example, if you use your garage for your woodworking business some days and for a home theater other days, you won’t be able to take the deduction.
If you’ve passed these two tests, congratulations! You can ask your tax professional about claiming your garage as a business expense. If you are using your garage space this way, Neighborhood Garage Door Service of Houston, Texas recommends that you be sure you have the best possible garage door and garage door opener. You want to protect your work space, so be sure you have a high quality insulated overhead door that will give you a long lifetime of secure use.
