Tax Deductions for Interior Designers

••• House interior design image by Aleksandar Radovanovic from Fotolia.com

As an interior designer, many of the services you offer might relate to selling equipment, which means you need to know how to work with tax sale. However, depending on the work you do, there are other taxes related to your job that you must know. These include special deductions that you need to be aware of, in case you meet the conditions for those deductions.

Nontaxable Labor

Any repairs you make, including refinishing or reconditioning an item, are not taxable. The charges to your client for your installation labor — the work required for the installation of a product or item after its delivery to the client's house — are also tax-free. These charges only include the costs of the installation process; anything you did before the installation process is not tax-free. Your professional fees that do not relate to the sale of merchandise are also tax-free. These charges to your client go under a category named "Nontaxable Labor" on your tax form. You are allowed to deduct them from the amount of your total sales.

Bad Debts

If you sell an item to one of your clients, you need to pay taxes for that sale. However, if for some reason your client did not pay you back or only paid a part of the price of purchase, and you already paid the taxes for that sale, you are allowed to deduct the taxable part of the debt owed to you. You are allowed to claim this deduction on your tax return form, according to what you have on your records. In case just a portion of the amount owed to you was not paid off, you deduct only the part that was taxable from that amount. To do this, you need to determine the total taxable amount for the sale and apply it to the percentage of the sale that is owed to you. This is the amount you deduct.

Resold Purchases

If you buy an item that you need for your work or office, you pay the necessary taxes on it. If, for any reason, you then sold the article on a taxable transaction before you used it, you can deduct the cost from your taxes. Include the price you paid for the item as a deduction on your tax return form under the category "Cost of Tax-Paid Purchases Resold Prior Use."

Energy Efficiency

Helping to create energy efficiency in buildings can also result in tax deductions. If you are involved in the construction of a new public building, such as school, university or government building, and help create technical specifications that allow more energy efficiency (a decrease in energy costs by 50 percent), you can make tax deductions of $1.80 per square foot of each energy-efficient installation you designed.

Out-of-State Costs

If you buy any necessary products for your work out of state, and you pay taxes on that purchase, you can deduct the amount of tax paid from the taxes you have to pay in your state.

References

About the Author

Ronald Kimmons has been a professional writer and translator since 2006, with writings appearing in publications such as "Chinese Literature Today." He studied at Brigham Young University as an undergraduate, getting a Bachelor of Arts in English and a Bachelor of Arts in Chinese.

Photo Credits

  • House interior design image by Aleksandar Radovanovic from Fotolia.com