Is Coffee An Office Expense Or Office Supply: An Easy Guide
Do you remember the saying, “Nothing in this world is certain except death and taxes?” Death can come suddenly, but taxes are filed annually. And a lot of important questions come up when you're filing taxes, like “Is coffee an office expense or office supply?” “Is coffee for office tax deductible?” Read more to find out!
A Guide: Office Expense Vs. Office Supply
Coffee has become a fundamental part of people’s daily routine that it's become a need. How do we categorize something we consider as a need, but does not necessarily keep the business running? Is coffee an office expense or office supply?
But first, let's differentiate an office expense from an office supply.
An office supply includes ordinary and necessary items that your business needs to function. Necessary and ordinary simply mean they are accepted, they are common items in the industry, and are appropriate to the business. Items that fall into this category are replenished regularly within a year.
Here are some examples:
- Office Supplies:
- Rubber bands
- Business cards
- Bathroom and cleaning supplies:
- Hand soap
- Hand sanitizer
- Disinfectant spray
- Pantry supplies:
- Paper cups
- Paper plates
- Paper towels
- Plastic utensils
- Beverages – Is coffee an office supply? Yes.
NOTE: If the items are used to make products, they cannot be tagged under office supplies.
Office expenses must still be both necessary and ordinary. These include non-tangible services and some hardware required to run an office. These items are sometimes called office operating expenses.
Here are some examples:
- Accounting software products
- Other web-based software
- Website maintenance
- Domain name cost
- Internet hosting fees
- Cloud services
- Office maintenance or cleaning services
NOTE: If any item above is used for both personal and professional use, it falls under listed property. Cellphones and computers were recently removed as listed property, but you still have to track usage for reference.
The Verdict: Coffee As An Office Supply
There are other common business deduction categories to consider. Here are some examples:
- Legal and professional fees
- Building repairs
- Car and truck expenses
Some of the categories seem obvious, but office supplies and office expenses cause confusion, especially when you add coffee in the picture. So is coffee an office expense or office supply?
Here is the final checklist:
- Tangible items
- Must be ordinary and necessary for the industry
- Needs replenishment within the year
- Must be used for the business to function
- Must NOT be used for making products
As long as you're not in the business of making coffee-related products, it is most definitely an office supply.
Whenever we wonder, “Is coffee an office expense or office supply?” the only subject worth debating is whether it is necessary and ordinary for the industry. But do we really have to question the necessity of coffee in an office? I don't think so.