Deductions by Design: 13 Tax Deductions for Architects

The day-to-day life of an architect extends beyond just design and construction—it also offers the opportunity to smartly navigate your finances. As an architect, you encounter a wide range of expenses and some of them are tax-deductible. All you need is the right knowledge or guidance to identify and claim them. Ready to dive into some valuable savings? Keep reading as we discuss the top 13 tax deductions that architects can benefit from.

Top 13 Tax Deductions for Architects

Some top tax deductions you can claim as an architect are: 

• Vehicle usage
• Cost of goods sold (COGS)
• Education and training
• Furniture and equipment
• Insurance
• Meals
• Office Supplies 
• Reference Materials
• Software
• Start-Up Costs
• Travel
• Utilities

1. Car and Truck Usage

If you’re using your personal vehicle for business purposes, you can deduct mileage for your business usage. You may choose to claim individual expenses that are also part of vehicle expenses, such as an oil change. 

If you decide to do this, you’ll calculate the percentage of business use out of your overall vehicle usage. Then, you’ll deduct that percentage from the total cost.

If you’re using your vehicle exclusively for business purposes, you can deduct all vehicle expenses. This includes gas, insurance, and servicing. You’ll need to keep records of expenses to claim these deductions. 

Another option you have is to claim the IRS standard mileage rate, which is 65.5 cents per mile driven for the 2023 tax year.

2. Cost of goods sold (COGS)

If you’re an architect, you may be responsible for overseeing products used during the construction process. 

You can claim some of these costs as deductibles, but there are some things you should know first. You can deduct the costs of certain products if your business produces them. However, you can’t deduct labor costs with salary or wage deductions. 

3. Education and Training

You may be surprised to know that both education and training costs are, in fact, tax-deductible. Not only does this section cover education and training, but tuition assistance may also be deductible. 

Other potential tax deductions related to education and training include:

• Conferences 
• Special workshops
• Training programs

You’ll want to be careful with this category because education and training benefits may also be part of another benefit.

4. Employee benefits

You may qualify for a tax deduction for the costs incurred with several employee benefits. Some employee benefits you may deduct are: 

• Health insurance 
• Life insurance (unless you are a direct or indirect beneficiary of the policy)
• Education assistance 
• Gym memberships
• Retirement plans
• Paid sick and vacation days
• Transportation benefits

If you choose to seek tax deductions for employee benefits, you’ll want to make sure that you don’t find these benefits in other categories. 

5. Furniture and Equipment

It may also surprise you to see furniture and equipment on this list for tax deductions. You can deduct costs for items such as chairs, desks, sofas, and more. You can also deduct the equipment used to operate your business.

Given how broad this category can be, there are some things you should know beforehand.  There may be different deduction rules for equipment or furniture items because of their cost. You can choose whether to have your equipment or furniture written off for the tax year you purchased it or depreciated over several years. 

6. Insurance

Insurance is another category you can deduct as an architect. This can apply whether you work at an office or work from home. There are also several ways you can save on business-related expenses and insurance.

Business-related insurance is 100% deductible. If you have a home office to do your work, you’ll receive a deductible for part of your homeowners’ or renters’ insurance.

Business-related expenses such as these are fully deductible: 

• Commercial property insurance 
• General liability insurance
• Home-based business insurance
• Product liability insurance
• Professional liability insurance

If you have a home office, the percentage of your home office square footage in relation to the total square footage of your home is deductible.

7. Meals

Meals are another category that may seem out of place but serve a useful purpose. As with other categories, you’ll want to know a few things first:

• You can deduct 50% of business meal costs. 
• You can deduct 50% of meals with your clients or your employees, but you must discuss business during the meal.
• You can deduct 50% of any meals purchased during business travel. 
• To deduct the total amount, the meal will have to be a celebration.
• You can deduct the full cost of what the IRS considers celebratory meals. These meals include anniversaries, birthday meals, company picnics, and holiday dinner parties.

No matter how you’ll claim this deduction, you should keep your receipts at all times. You should also record the names of your clients and your employees. Finally, you should also make a memo of what you discussed for safekeeping when tax season arrives.

8. Office Supplies

You may also seek a tax deduction of 100% for costs associated with office supplies used, such as postage and stamp costs.

There are a few qualifications you must meet to receive a deduction for office supplies: 

• You can only deduct the costs of materials and supplies used in the current tax year.
• You don’t keep a record of when you use these items.
• You don’t take inventory of these items.

The final requirement for office supply tax deductions is that deducting the items won’t reduce your income amount because of the overall deductions.

9. Reference Materials

Another deduction you can deduct is reference materials. This includes computers and related hardware and software. 

You can also claim a deduction for backup software if you need to reference it for items such as hard drives. As with other deductions, be sure to save receipts. 

10. Software

As with office supplies, you can deduct software costs. Since the 2016 tax year, Section 179 of the IRS tax code states you can deduct expenses for business assets that cost under $2,500, including software programs and software suites.

For software programs or software suites that cost more than $2,500, you’ll treat these items as depreciable assets. This means that you’ll spread out the cost of the program or suite over time.

If you want to claim either the software program or a software suite as a deduction, you’ll treat this as an expense. 

11. Start-Up Costs

If you want to claim the cost of office equipment, you can claim several categories as deductions. This includes: 

• Computer
• Office equipment
• Software

To claim these costs as deductible, you’ll need to keep separate records. These costs may depreciate.

You can take up to $5,000 of organizational expenses and up to $5,000 of startup expenses during the first year of business. 

12. Travel

Travel comprises a large part of your job duties as an architect. There are several ways that you can reap the rewards of travel for tax purposes. 

You can deduct travel expenses if they are: 

• Conventions
  • You’ll need to show that your attendance at a convention benefits your business or trade.
  • There are special rules if you attend conventions outside of North America.
• Incurred or paid in connection with a temporary work assignment away from home.
  • You can’t deduct travel expenses for indefinite work assignments. 
  • An indefinite work assignment will last for more than one year.
• Necessary and ordinary expenses that require you to travel away from home for your business, job, or profession.

You can also deduct specific travel expenses, such as:

• Airplane, bus, car, or train travel from your home to your business destination.
  • If your employer provides a ticket or you’re riding free because of frequent traveler programs, your cost is zero. 
• Baggage shipping costs, display material, and sample material between your regular and temporary work locations. 
• Business calls while on a business trip. This also includes communications by fax machine or other communication devices.
• Car usage while at your business destination.
  • You can deduct either the actual expenses or the standard mileage rate. 
  • You can also deduct driving fees, such as business-related tolls or parking fees.
  • If you rent a car for business destination travel, you’ll only deduct the business-use portion of your business-related driving expenses.
• Costs of the taxi or similar transportation between:
  • The airport or train station and your hotel
  • The hotel and work location of your business meeting place, clients, customers, or temporary work location. 
• Dry cleaning and laundry 
• Lodging and non-entertainment-related meals. 
• Other necessary business-related travel expenses may include:
  • Computer rental fees
  • Operating and maintaining a house trailer
  • Public stenographer’s fees
  • Transportation to and from a business meal
• Tips you pay for services related to any of these expenses.

If applicable, you can deduct these fees if you’re self-employed on Schedule C.

13. Utilities

If you use your business location, then all of your utility expenses are deductible. The following expenses are fully deductible:

• Electricity 
• Heat
• Internet 
• Security systems
• Telephone

However, if you work as an architect from home, there may be more difficulties in claiming this section for tax deductions. 

Work with Professionals for Your Tax Deduction Needs

Utilizing these tax deductions can be a great financial strategy. At the same time, understanding the complexities of tax laws can be challenging. This is where the expertise of a tax professional becomes invaluable.

Collaborating with the experienced team at 1-800Accountant can help simplify the entire process. They can provide clear, detailed explanations and assist you in maximizing your tax deductions. From identifying deductible expenses to preparing your tax returns, we are equipped to handle your tax-related needs.