January 8, 2025 • 17 mins
Ever wondered how the right design choices can save your business money? Join us as we unlock the secrets to reducing your tax liabilities through strategic interior design. We're thrilled to have Brian Werner, a seasoned Certified Public Accountant from BRW Tax and Accounting, on board to guide us through the maze of tax codes that could directly impact your business's financial health. From the art of choosing deductible office upgrades to cracking the code on $2,500 expense thresholds, bonus depreciation, and Section 179 deductions, this episode is your ticket to making informed and financially savvy decisions.
Explore the uncharted territory where aesthetics meet accounting as we discuss the potential tax benefits of enhancing your office environment. Discover how elements like office furniture and even gym equipment can serve as valuable business assets. We delve into the details of capitalizing versus expensing, providing clarity on when an expense needs to be depreciated over time. Our conversation with Brian reveals why early consultation with financial advisors is crucial for maximizing tax savings. Whether you're planning structural improvements or considering new office equipment purchases, our expert insights will help you navigate the financial landscape with confidence.
• Importance of workspace design on business performance
• Tax implications of furniture and equipment upgrades
• Capitalization vs. expensing for tax purposes
• Potential mistakes when claiming design-related deductions
• Consulting with CPAs and designers for strategic planning
• Real-life examples of successful design investment
• Recap of key tax tips and best practices
For expert tax advice, contact Brian at 719-358-2360 or email contactus@brwtax.com.
We welcome your questions! If you would like to learn more about us or connect for a conversation, please visit www.pasleycommercialinteriors.com.
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Randi Lynn (00:00):
Happy New Year everybody.
It's January 2025, and I'mexcited.
I'm excited.
I think this officially, we canmake the rules because this is
our podcast, that's right.
So this is season two, that'sright, season two.
We have a whole season underour belts.
Anyways, for those of you whoare just joining us, my name is
Randi Lynn Johnson.
(00:20):
I work with Pasley CommercialInteriors and I have with me the
illustrious Robin Pazley.
Hello, founder, principaldesigner, all things amazing.
And, if you remember, we endedthe year starting to bring in
other business experts becausewe want to help business owners
(00:41):
in all ways with their designand growth and all, but also,
how can we help them with thingsthat they're coming up against?
Yes, and so we had HB Pasleythe illustrious, the infamous,
yes infamous is right.
Robin (00:57):
Oh yeah, and today, you heard him just now.
Who do we have Randi Lynn,?
Randi Lynn (01:02):
Brian Werner with us .
Robin (01:05):
He is a CPA locally and the name of his company is BRW
Tax and Accounting.
Brian (01:12):
And for people that don't know what a CPA is, it's a
Certified Public Accountant.
Robin (01:16):
Not a certified pain in their Beep Beep.
Brian (01:20):
That's great Well.
Randi Lynn (01:21):
I guess it depends on the day.
Brian (01:23):
True Taxes, all things are on the day.
Randi Lynn (01:24):
True Taxes.
All things are death and taxes,yes, but they're important, and
we have great people like Brianin our corner to help us walk
through things Exactly.
So today we're breaking downhow the right interior design
choices can have an impact notjust on your workspace, but also
on your taxes.
So if you're a business owner,you don't want to miss this one.
(01:46):
We're going to talk about waysthat interior design
improvements affect taxes, likeI just said, and how to
depreciate investments ininterior design.
So that's what you have to lookforward to, because it's
important.
Brian (01:58):
Yes, All right, big dollars could be on the line, so
you got to make sure that youdo it properly.
Randi Lynn (02:06):
Yeah Well, let's just jump right in.
Let's talk about examples ofdeductible expenses Furniture
upgrades.
So you're making a furnitureupgrade.
Why, Robin?
Why would you make a?
Robin (02:21):
Oh, because you're adding new staff, new work staff,
cause you're growing, which iswhat we always want for you, and
so you hire new people.
You need new work stations Goyes.
Brian (02:32):
So, yes, so when, when you have a business that's
growing, you're going to have toacquire furniture.
You know you've got equipmentand then of course, you know if
your space is outdated you'regoing to have your improvements.
So, most furniture, if it'sunder $2,500 when it comes to
just one single item, you canpretty much expense that.
That doesn't have to bedepreciated, it doesn't have to
(02:55):
be capitalized, it doesn't haveto be pretty much reported to
the IRS.
Now, once you go over that$2,500 limit so say you got to
go and get like a really largeconference table or something
that's going to be more thanthat then at that point you
would have to capitalize it.
However, the IRS does give youcertain depreciation like rules
(03:16):
and guidelines that you can tapinto.
There's bonus depreciation,which right now is 60% for 2024.
There's some chatter that theymight bring back the 100% bonus
depreciation at some juncture.
However, if that's not enoughdepreciation and you need more
tax savings, you could alsoutilize what's called Section
(03:39):
179, which is pretty much whereyou get elect to expense that
entire piece of furniture.
Randi Lynn (03:46):
I've heard of 179.
Okay, that's another arm,because I knew that up to 100%
you can deduct all for furniturebusiness expenses.
Brian (03:56):
Yes, yeah.
Randi Lynn (03:58):
That's amazing, yep.
Brian (03:59):
As long as we're not going over I believe it's around
like 2 million they alwaysadjust the cap or whatever, but
as long as you're not, you know,acquiring more than $2 million
worth of furniture, you're goingto be just fine, Sure.
Robin (04:10):
Awesome.
Brian (04:10):
So same thing kind of goes with your equipment as well
.
So if you have any officeequipment that you know maybe
you needed to add, you know someextra like scanners, or you
know you've got computers andsuch or whatever same thing, so
long as it's under 2,500, youcan expense it all.
If, for some reason maybe youhave to get something that's a
little bit pricier than those,same rules would apply.
Robin (04:31):
So that's awesome, yeah, now improvements, totally
different game.
Brian (04:36):
So if you're looking at like structural improvements, um
, those are depreciated on overpretty much a longer period of
time.
Kind of depends on what you'redoing, but I'm like we could be
looking at, you know, a 39 yearwrite-off period.
Robin (04:52):
So so that's like if they purchase a building and they do
major construction on thebuilding, that's where that
would come into place.
Brian (05:00):
I almost kind of look at it as just for, like
simplicity's sake, anythingthat's kind of like permanent in
nature, so like your walls orlike your ceilings, or if you
have to do, like, you know, roofwork and such, okay, and we can
kind of discuss, you know thatin a little more detail.
But so anything that's kind oflike more permanent in nature,
that's going to be, you know,kind of a okay, we need to fix
(05:21):
it once, but then we don't haveto really, hopefully, worry
about it for a really long time.
Now, if you're talking aboutlike flooring, or if you're
going to come in and you knowyou're going to add maybe some
more kind of like things thatcan kind of be, you know, either
replaced or removed, those havedifferent rules as well.
So, when it comes down to it,for simplicity's sake, if you're
(05:46):
enhancing something so, forexample, let's say you have an
office space and let's say it'sgot some ratty looking carpet or
whatever and you're like thiscarpet's like 30 years old,
can't clean it anymore, it'sstarting to fall apart.
They come in, they don't takeit seriously, they're out.
This carpet's like 30 years old, can't clean it anymore.
Randi Lynn (05:58):
It's starting to like fall apart.
People want to leave.
They come in, they don't takeus seriously, they're out, so
it's affecting our business.
That's exactly right.
Brian (06:04):
Yeah, exactly.
And you come in and you're like, okay, I still want to keep
carpet, but we're just going togo ahead and replace the old
carpet.
A replacement is something thatnormally you can expense right
away.
Robin (06:16):
So a hundred percent a hundred percent doesn't have to
be capitalized.
Brian (06:20):
But let's say that you come in and that old, ratty
carpet you're like I don't wantto put carpet down, you know, I
want to put some nice flooringin.
Well, at that point, more thanlikely, you're probably
enhancing the value of thatspace.
So when you enhance the valueof something, usually you have
to capitalize that.
That's like considered like acapitalizable improvement.
(06:41):
And then you've got once againkind of different depreciation
rules that may come and comeinto play at that point.
Randi Lynn (06:49):
So so if we're enhancing, then we're looking at
depreciating, and so that'sgoing to be a different thing
versus just replacement.
Robin (06:57):
Okay, Exactly, and would that be the same rules applied
to, let's say, we're going toredo the break room, we're
getting all new cabinets and newsink and new fridge and
everything, but it's just removeand replace.
Brian (07:09):
Yes, okay, yes.
Randi Lynn (07:11):
That's exciting news .
That is exciting news.
I hope all of you listening arepaying attention.
It's time to redo your breakroom.
It's time to redo your breakroom.
It's time Give the people whatthey want.
So can you tell us what arethings that wouldn't count?
If I am trying to improve myoffice space.
(07:33):
I mean desks that seems like agiven Chairs.
Is there any furniture?
Robin (07:37):
or I don't know, design elements that we might be
bringing to the table or thatsomebody might want, you know,
for their to improve the visualsof their space.
That would not apply.
Brian (07:49):
Not really actually Really so, like if I want a
water fountain.
Sure Fish tank, sure Fish tank,sure.
No, I mean, you're right,you're right.
Randi Lynn (07:58):
Yeah.
Brian (07:59):
Yeah, I mean people purchase, you know, like gym
equipment for their offices.
I mean I've been in attorneyoffices that have you know like
a treadmill in it or whatever,and I mean you know, does that
really have a business purpose?
You know probably kind ofpushing it or whatever.
Randi Lynn (08:16):
It could be argued though.
Brian (08:21):
Happier kind of pushing it or whatever.
But, um, water fountains, fishtanks, I mean, your argument at
that juncture is pretty muchlike hey, it's enhancing, it's
making my space look, you know,warm and welcome.
You know it's something thatyou know I'm utilizing to, you
know, attract and retain mycustomer base and they really
enjoy coming into my space.
Cause I think, when it comesdown to it, like, having your
customers like come into yourspace can be a huge asset.
(08:44):
And that depends on, like, isit a warm space?
Is it, are you a hospital typeof company?
Um, so, I think as long as yeah,um, now, of course, I think
there are situations where youcould run into that might seem
to be a little, you know, kindof unnecessary, that you know
governments could push back onthose items.
(09:06):
They could argue and be like,did you really need to have, you
know, that particular?
You know like, you know100-foot, like TV, like you know
screen, plasma, you know likehigh end or whatever, for maybe
a space that's not appropriate.
But, once again, if it serves apurpose and you've just like,
well, this is what we use forour presentations right.
Robin (09:28):
Yeah, you've got some kind of data or you know
business plan that supports theuse of it.
Would branding fall?
I'm assuming it would, but doesbranding and signage and all
that fall into that samecategory?
Brian (09:40):
Depends.
So I mean usually branding,that's probably something that's
just going to be considered amarketing expense Signage.
It depends on who owns it andthen it depends on, once again,
what's the dollar amount Okay?
So, for example, we've got onerestaurant that we work with
(10:00):
that ended up investing $60,000into their restaurant signage
because they're off of theinterstate and they wanted
something that was like you know, that people could see pretty
much and maybe even attractpeople to come off of I-25 and
go to their restaurant.
So that was one we had tocapitalize and depreciate over
(10:21):
time.
Robin (10:22):
So, yeah, so cause we work with um companies all the
time and we integrate theirbranding into their design, and
often it's not even branding,it's more like wall art
installed.
That would fall into that, yesor no?
Brian (10:38):
Well, depends.
Yeah, you know, can you removeit?
Is it kind of more permanent,gotcha?
So if it's, removable, then soif it's removable, what type of
piece of art are we talking here?
Robin (10:53):
Like vinyl that is applied to the wall, kind of
like you see in our space here.
Brian (10:57):
Okay, okay, I would say under $2,500,.
You're probably in more of likeit's office decor or even if it
is part of your branding orwhatever.
Once you get over that $2,500limit, then you're probably
looking at capitalizing thatitem and depreciating it.
Robin (11:14):
But if it's removable, which means you can just take it
to the next place, then wheredoes that fall?
Brian (11:20):
So if it's removable, then I mean, if you're just
moving to the space and say itwas over the $2,500, you're
still depreciating.
Robin (11:27):
You still own it, so it's FF&E at that point.
Brian (11:30):
Yes.
Randi Lynn (11:31):
Remind our listeners with FF&E at that point.
Robin (11:32):
Yes, okay, yes, remind our listeners with FF&E,
Fixtures, furniture andequipment.
Randi Lynn (11:35):
Yes, good call, that's not industry class right.
Brian (11:39):
All the acronyms of the world right?
Definitely there's so many.
I ask that question all thetime.
What does that stand for?
Randi Lynn (11:46):
Claude, you for being humble enough to ask.
Yes, because are there anymistakes that people should
avoid when claiming designrelated expenses?
Brian (11:58):
Yes, Just assuming that everything can be written off
and like expensed right away.
So anybody that we work with wealways say pick up the phone
first, you know, before we gothrough like a major redesign of
our space because we want tomake sure that we're going to
work, you know, directly withthe designer, work with our
client on, you know, okay, whatare we going to be doing, what
(12:21):
type of money are we investing,and then we can kind of go
through the associated you knowrules.
Can we expense that?
Do we have to depreciate that?
If we have to depreciate it,can we get some of the
accelerated bonus like Section179 depreciation write-offs that
might be available?
So we want to be involvedpretty much before the money
(12:44):
starts being invested because wecan plan appropriately.
Yeah, that's right and everybodycan be aware of, like, okay,
this is going to save me thismuch in taxes, but then maybe
there's that bucket that we'regoing to have to write off and
we're not going to be able toget the savings right away.
We're only going to get aportion, you know, for maybe
five, seven years, could even belonger than that.
Randi Lynn (13:06):
So what I'm hearing is ask you early.
Brian (13:09):
Yes, call Brian.
Yes, that's exactly right, Ialways tell people and everybody
that I work with I'm like callme first sure, because then we
can kind of plan and just atleast make people aware of, like
okay, you know, the moreknowledge they have before they
start making decisions andpotentially make a decision that
(13:29):
they don't consult us on.
yeah, so we like, yeah, we'rebig planners, sure I don't like
any major surprises in my world,because usually major surprises
results in people paying a lotmore money to the government
than they necessarily have toLike.
Our philosophy is pretty muchkeeping as much money on Main
Street as legally possibleBecause that benefits our
(13:51):
community.
Robin (13:51):
It does benefit our community.
I love that approach.
Brian (13:52):
It does it's.
I like that too.
It does benefit our community.
It benefits everybody.
I love that approach it does.
Randi Lynn (13:56):
That's why Colorado Springs is so great, because we
have people like Brian helpingall the business owners
Absolutely.
Robin (14:02):
I want to make sure, Brian, that people know how to
contact you.
Brian (14:06):
Yes, so we're located in downtown Colorado Springs.
Our phone number is719-358-2360.
You can also email us atcontactus at brwtaxcom, or, if
you want to pop into ourbeautiful office location that
we have, it's 523 South CascadeAvenue.
Robin (14:27):
And it is beautiful.
I had to come over just to seeit because you described it to
me.
I was like I have to be inthere.
Brian (14:32):
So I actually say the same thing about your space too,
to everybody.
Randi Lynn (14:37):
That's awesome, well , good, okay, so we talked about
.
We talked a lot about a lot ofdifferent things.
So let's recap it just for ourlisteners.
So if they because like me, I'mlike I don't know so much, like
I need those, I tell my husbandtoo, when we're having
discussions, like, okay, wetalked about a lot, bullet point
(14:57):
it for me, bullet point it, Ilike that.
Yes, yeah.
Brian (14:58):
I use TMI.
Sometimes I'm like whoa toomuch information.
Can we take a pause and likeyeah, let's recap, Make sure
that everybody understands andwe're all on the same page.
Randi Lynn (15:10):
So the three points number one first thing you're
going to do is sit down withyour CPA Ideally even your CPA
and designer and you can bediscussing, throwing out ideas,
and then know what is going tobe deductible, write off et
cetera.
But contact the CPA before youmake big decisions.
I like that yes.
(15:30):
Good idea, definitely Numbertwo Robin.
Yes.
Robin (15:33):
Number two what I heard you say, brian, was that
everything that has to do withupgrading your space furniture,
construction expenses, anythingthat's beautifying and really in
the wheelhouse of what we do istax deductible, which is great,
because we love helping peoplemake the right investment in
their space.
Brian (15:53):
Yes.
Robin (15:54):
Awesome.
Randi Lynn (15:55):
Brian, do you have a third one for the people?
Brian (15:56):
Yes.
So when it comes to, yes,furniture equipment you know a
lot of your office equipment aslong as it's under $2,500, you
can expense it right away.
Anything above you're going tohave to capitalize it.
But there could be accelerateddepreciation write-offs, like
the bonus depreciation, section179 depreciation.
So there are ways to prettymuch still expense it even
(16:21):
though you're having tocapitalize it and technically
depreciate it.
So there are those, you know,avenues that the IRS does
provide to you.
And when it comes to like youknow your bigger items, like
construction and renovation andlike some of your structural
improvements and such, you knowonce again, you capitalize it,
you depreciate it, but some ofthem can be accelerated.
(16:42):
So, yes, definitely work withyour interior design and with
your CPA just to make sureyou've got a good game plan in
place and you know what toexpect.
Randi Lynn (16:50):
That's awesome, awesome, great.
Well, thank you so much foryour time today.
We're going to have you backand ask you a couple more
questions on our next episode,but thank you for your time
today and again, if you havequestions or you want to contact
Brian, I'm going to post thatin the show notes and so all
your contact info will be thereand people can reach out,
(17:12):
because you are an expert andyou can help.
Thanks so much, brian.
Brian (17:16):
Definitely.
Thank you for having me.
Happy New Year everybody.
It's January 2025, and I'mexcited.
I'm excited.
I think this officially, we canmake the rules because this is
our podcast, that's right.
So this is season two, that'sright, season two.
We have a whole season underour belts.
Anyways, for those of you whoare just joining us, my name is
Randi Lynn Johnson.
(00:20):
I work with Pasley CommercialInteriors and I have with me the
illustrious Robin Pazley.
Hello, founder, principaldesigner, all things amazing.
And, if you remember, we endedthe year starting to bring in
other business experts becausewe want to help business owners
(00:41):
in all ways with their designand growth and all, but also,
how can we help them with thingsthat they're coming up against?
Yes, and so we had HB Pasleythe illustrious, the infamous,
yes infamous is right.
Robin (00:57):
Oh yeah, and today, you heard him just now.
Who do we have Randi Lynn,?
Randi Lynn (01:02):
Brian Werner with us .
Robin (01:05):
He is a CPA locally and the name of his company is BRW
Tax and Accounting.
Brian (01:12):
And for people that don't know what a CPA is, it's a
Certified Public Accountant.
Robin (01:16):
Not a certified pain in their Beep Beep.
Brian (01:20):
That's great Well.
Randi Lynn (01:21):
I guess it depends on the day.
Brian (01:23):
True Taxes, all things are on the day.
Randi Lynn (01:24):
True Taxes.
All things are death and taxes,yes, but they're important, and
we have great people like Brianin our corner to help us walk
through things Exactly.
So today we're breaking downhow the right interior design
choices can have an impact notjust on your workspace, but also
on your taxes.
So if you're a business owner,you don't want to miss this one.
(01:46):
We're going to talk about waysthat interior design
improvements affect taxes, likeI just said, and how to
depreciate investments ininterior design.
So that's what you have to lookforward to, because it's
important.
Brian (01:58):
Yes, All right, big dollars could be on the line, so
you got to make sure that youdo it properly.
Randi Lynn (02:06):
Yeah Well, let's just jump right in.
Let's talk about examples ofdeductible expenses Furniture
upgrades.
So you're making a furnitureupgrade.
Why, Robin?
Why would you make a?
Robin (02:21):
Oh, because you're adding new staff, new work staff,
cause you're growing, which iswhat we always want for you, and
so you hire new people.
You need new work stations Goyes.
Brian (02:32):
So, yes, so when, when you have a business that's
growing, you're going to have toacquire furniture.
You know you've got equipmentand then of course, you know if
your space is outdated you'regoing to have your improvements.
So, most furniture, if it'sunder $2,500 when it comes to
just one single item, you canpretty much expense that.
That doesn't have to bedepreciated, it doesn't have to
(02:55):
be capitalized, it doesn't haveto be pretty much reported to
the IRS.
Now, once you go over that$2,500 limit so say you got to
go and get like a really largeconference table or something
that's going to be more thanthat then at that point you
would have to capitalize it.
However, the IRS does give youcertain depreciation like rules
(03:16):
and guidelines that you can tapinto.
There's bonus depreciation,which right now is 60% for 2024.
There's some chatter that theymight bring back the 100% bonus
depreciation at some juncture.
However, if that's not enoughdepreciation and you need more
tax savings, you could alsoutilize what's called Section
(03:39):
179, which is pretty much whereyou get elect to expense that
entire piece of furniture.
Randi Lynn (03:46):
I've heard of 179.
Okay, that's another arm,because I knew that up to 100%
you can deduct all for furniturebusiness expenses.
Brian (03:56):
Yes, yeah.
Randi Lynn (03:58):
That's amazing, yep.
Brian (03:59):
As long as we're not going over I believe it's around
like 2 million they alwaysadjust the cap or whatever, but
as long as you're not, you know,acquiring more than $2 million
worth of furniture, you're goingto be just fine, Sure.
Robin (04:10):
Awesome.
Brian (04:10):
So same thing kind of goes with your equipment as well
.
So if you have any officeequipment that you know maybe
you needed to add, you know someextra like scanners, or you
know you've got computers andsuch or whatever same thing, so
long as it's under 2,500, youcan expense it all.
If, for some reason maybe youhave to get something that's a
little bit pricier than those,same rules would apply.
Robin (04:31):
So that's awesome, yeah, now improvements, totally
different game.
Brian (04:36):
So if you're looking at like structural improvements, um
, those are depreciated on overpretty much a longer period of
time.
Kind of depends on what you'redoing, but I'm like we could be
looking at, you know, a 39 yearwrite-off period.
Robin (04:52):
So so that's like if they purchase a building and they do
major construction on thebuilding, that's where that
would come into place.
Brian (05:00):
I almost kind of look at it as just for, like
simplicity's sake, anythingthat's kind of like permanent in
nature, so like your walls orlike your ceilings, or if you
have to do, like, you know, roofwork and such, okay, and we can
kind of discuss, you know thatin a little more detail.
But so anything that's kind oflike more permanent in nature,
that's going to be, you know,kind of a okay, we need to fix
(05:21):
it once, but then we don't haveto really, hopefully, worry
about it for a really long time.
Now, if you're talking aboutlike flooring, or if you're
going to come in and you knowyou're going to add maybe some
more kind of like things thatcan kind of be, you know, either
replaced or removed, those havedifferent rules as well.
So, when it comes down to it,for simplicity's sake, if you're
(05:46):
enhancing something so, forexample, let's say you have an
office space and let's say it'sgot some ratty looking carpet or
whatever and you're like thiscarpet's like 30 years old,
can't clean it anymore, it'sstarting to fall apart.
They come in, they don't takeit seriously, they're out.
This carpet's like 30 years old, can't clean it anymore.
Randi Lynn (05:58):
It's starting to like fall apart.
People want to leave.
They come in, they don't takeus seriously, they're out, so
it's affecting our business.
That's exactly right.
Brian (06:04):
Yeah, exactly.
And you come in and you're like, okay, I still want to keep
carpet, but we're just going togo ahead and replace the old
carpet.
A replacement is something thatnormally you can expense right
away.
Robin (06:16):
So a hundred percent a hundred percent doesn't have to
be capitalized.
Brian (06:20):
But let's say that you come in and that old, ratty
carpet you're like I don't wantto put carpet down, you know, I
want to put some nice flooringin.
Well, at that point, more thanlikely, you're probably
enhancing the value of thatspace.
So when you enhance the valueof something, usually you have
to capitalize that.
That's like considered like acapitalizable improvement.
(06:41):
And then you've got once againkind of different depreciation
rules that may come and comeinto play at that point.
Randi Lynn (06:49):
So so if we're enhancing, then we're looking at
depreciating, and so that'sgoing to be a different thing
versus just replacement.
Robin (06:57):
Okay, Exactly, and would that be the same rules applied
to, let's say, we're going toredo the break room, we're
getting all new cabinets and newsink and new fridge and
everything, but it's just removeand replace.
Brian (07:09):
Yes, okay, yes.
Randi Lynn (07:11):
That's exciting news .
That is exciting news.
I hope all of you listening arepaying attention.
It's time to redo your breakroom.
It's time to redo your breakroom.
It's time Give the people whatthey want.
So can you tell us what arethings that wouldn't count?
If I am trying to improve myoffice space.
(07:33):
I mean desks that seems like agiven Chairs.
Is there any furniture?
Robin (07:37):
or I don't know, design elements that we might be
bringing to the table or thatsomebody might want, you know,
for their to improve the visualsof their space.
That would not apply.
Brian (07:49):
Not really actually Really so, like if I want a
water fountain.
Sure Fish tank, sure Fish tank,sure.
No, I mean, you're right,you're right.
Randi Lynn (07:58):
Yeah.
Brian (07:59):
Yeah, I mean people purchase, you know, like gym
equipment for their offices.
I mean I've been in attorneyoffices that have you know like
a treadmill in it or whatever,and I mean you know, does that
really have a business purpose?
You know probably kind ofpushing it or whatever.
Randi Lynn (08:16):
It could be argued though.
Brian (08:21):
Happier kind of pushing it or whatever.
But, um, water fountains, fishtanks, I mean, your argument at
that juncture is pretty muchlike hey, it's enhancing, it's
making my space look, you know,warm and welcome.
You know it's something thatyou know I'm utilizing to, you
know, attract and retain mycustomer base and they really
enjoy coming into my space.
Cause I think, when it comesdown to it, like, having your
customers like come into yourspace can be a huge asset.
(08:44):
And that depends on, like, isit a warm space?
Is it, are you a hospital typeof company?
Um, so, I think as long as yeah,um, now, of course, I think
there are situations where youcould run into that might seem
to be a little, you know, kindof unnecessary, that you know
governments could push back onthose items.
(09:06):
They could argue and be like,did you really need to have, you
know, that particular?
You know like, you know100-foot, like TV, like you know
screen, plasma, you know likehigh end or whatever, for maybe
a space that's not appropriate.
But, once again, if it serves apurpose and you've just like,
well, this is what we use forour presentations right.
Robin (09:28):
Yeah, you've got some kind of data or you know
business plan that supports theuse of it.
Would branding fall?
I'm assuming it would, but doesbranding and signage and all
that fall into that samecategory?
Brian (09:40):
Depends.
So I mean usually branding,that's probably something that's
just going to be considered amarketing expense Signage.
It depends on who owns it andthen it depends on, once again,
what's the dollar amount Okay?
So, for example, we've got onerestaurant that we work with
(10:00):
that ended up investing $60,000into their restaurant signage
because they're off of theinterstate and they wanted
something that was like you know, that people could see pretty
much and maybe even attractpeople to come off of I-25 and
go to their restaurant.
So that was one we had tocapitalize and depreciate over
(10:21):
time.
Robin (10:22):
So, yeah, so cause we work with um companies all the
time and we integrate theirbranding into their design, and
often it's not even branding,it's more like wall art
installed.
That would fall into that, yesor no?
Brian (10:38):
Well, depends.
Yeah, you know, can you removeit?
Is it kind of more permanent,gotcha?
So if it's, removable, then soif it's removable, what type of
piece of art are we talking here?
Robin (10:53):
Like vinyl that is applied to the wall, kind of
like you see in our space here.
Brian (10:57):
Okay, okay, I would say under $2,500,.
You're probably in more of likeit's office decor or even if it
is part of your branding orwhatever.
Once you get over that $2,500limit, then you're probably
looking at capitalizing thatitem and depreciating it.
Robin (11:14):
But if it's removable, which means you can just take it
to the next place, then wheredoes that fall?
Brian (11:20):
So if it's removable, then I mean, if you're just
moving to the space and say itwas over the $2,500, you're
still depreciating.
Robin (11:27):
You still own it, so it's FF&E at that point.
Brian (11:30):
Yes.
Randi Lynn (11:31):
Remind our listeners with FF&E at that point.
Robin (11:32):
Yes, okay, yes, remind our listeners with FF&E,
Fixtures, furniture andequipment.
Randi Lynn (11:35):
Yes, good call, that's not industry class right.
Brian (11:39):
All the acronyms of the world right?
Definitely there's so many.
I ask that question all thetime.
What does that stand for?
Randi Lynn (11:46):
Claude, you for being humble enough to ask.
Yes, because are there anymistakes that people should
avoid when claiming designrelated expenses?
Brian (11:58):
Yes, Just assuming that everything can be written off
and like expensed right away.
So anybody that we work with wealways say pick up the phone
first, you know, before we gothrough like a major redesign of
our space because we want tomake sure that we're going to
work, you know, directly withthe designer, work with our
client on, you know, okay, whatare we going to be doing, what
(12:21):
type of money are we investing,and then we can kind of go
through the associated you knowrules.
Can we expense that?
Do we have to depreciate that?
If we have to depreciate it,can we get some of the
accelerated bonus like Section179 depreciation write-offs that
might be available?
So we want to be involvedpretty much before the money
(12:44):
starts being invested because wecan plan appropriately.
Yeah, that's right and everybodycan be aware of, like, okay,
this is going to save me thismuch in taxes, but then maybe
there's that bucket that we'regoing to have to write off and
we're not going to be able toget the savings right away.
We're only going to get aportion, you know, for maybe
five, seven years, could even belonger than that.
Randi Lynn (13:06):
So what I'm hearing is ask you early.
Brian (13:09):
Yes, call Brian.
Yes, that's exactly right, Ialways tell people and everybody
that I work with I'm like callme first sure, because then we
can kind of plan and just atleast make people aware of, like
okay, you know, the moreknowledge they have before they
start making decisions andpotentially make a decision that
(13:29):
they don't consult us on.
yeah, so we like, yeah, we'rebig planners, sure I don't like
any major surprises in my world,because usually major surprises
results in people paying a lotmore money to the government
than they necessarily have toLike.
Our philosophy is pretty muchkeeping as much money on Main
Street as legally possibleBecause that benefits our
(13:51):
community.
Robin (13:51):
It does benefit our community.
I love that approach.
Brian (13:52):
It does it's.
I like that too.
It does benefit our community.
It benefits everybody.
I love that approach it does.
Randi Lynn (13:56):
That's why Colorado Springs is so great, because we
have people like Brian helpingall the business owners
Absolutely.
Robin (14:02):
I want to make sure, Brian, that people know how to
contact you.
Brian (14:06):
Yes, so we're located in downtown Colorado Springs.
Our phone number is719-358-2360.
You can also email us atcontactus at brwtaxcom, or, if
you want to pop into ourbeautiful office location that
we have, it's 523 South CascadeAvenue.
Robin (14:27):
And it is beautiful.
I had to come over just to seeit because you described it to
me.
I was like I have to be inthere.
Brian (14:32):
So I actually say the same thing about your space too,
to everybody.
Randi Lynn (14:37):
That's awesome, well , good, okay, so we talked about
.
We talked a lot about a lot ofdifferent things.
So let's recap it just for ourlisteners.
So if they because like me, I'mlike I don't know so much, like
I need those, I tell my husbandtoo, when we're having
discussions, like, okay, wetalked about a lot, bullet point
(14:57):
it for me, bullet point it, Ilike that.
Yes, yeah.
Brian (14:58):
I use TMI.
Sometimes I'm like whoa toomuch information.
Can we take a pause and likeyeah, let's recap, Make sure
that everybody understands andwe're all on the same page.
Randi Lynn (15:10):
So the three points number one first thing you're
going to do is sit down withyour CPA Ideally even your CPA
and designer and you can bediscussing, throwing out ideas,
and then know what is going tobe deductible, write off et
cetera.
But contact the CPA before youmake big decisions.
I like that yes.
(15:30):
Good idea, definitely Numbertwo Robin.
Yes.
Robin (15:33):
Number two what I heard you say, brian, was that
everything that has to do withupgrading your space furniture,
construction expenses, anythingthat's beautifying and really in
the wheelhouse of what we do istax deductible, which is great,
because we love helping peoplemake the right investment in
their space.
Brian (15:53):
Yes.
Robin (15:54):
Awesome.
Randi Lynn (15:55):
Brian, do you have a third one for the people?
Brian (15:56):
Yes.
So when it comes to, yes,furniture equipment you know a
lot of your office equipment aslong as it's under $2,500, you
can expense it right away.
Anything above you're going tohave to capitalize it.
But there could be accelerateddepreciation write-offs, like
the bonus depreciation, section179 depreciation.
So there are ways to prettymuch still expense it even
(16:21):
though you're having tocapitalize it and technically
depreciate it.
So there are those, you know,avenues that the IRS does
provide to you.
And when it comes to like youknow your bigger items, like
construction and renovation andlike some of your structural
improvements and such, you knowonce again, you capitalize it,
you depreciate it, but some ofthem can be accelerated.
(16:42):
So, yes, definitely work withyour interior design and with
your CPA just to make sureyou've got a good game plan in
place and you know what toexpect.
Randi Lynn (16:50):
That's awesome, awesome, great.
Well, thank you so much foryour time today.
We're going to have you backand ask you a couple more
questions on our next episode,but thank you for your time
today and again, if you havequestions or you want to contact
Brian, I'm going to post thatin the show notes and so all
your contact info will be thereand people can reach out,
(17:12):
because you are an expert andyou can help.
Thanks so much, brian.
Brian (17:16):
Definitely.
Thank you for having me.
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