Office furniture used in a business is depreciable property under federal tax law. It’s classified as 7-year property under the Modified Accelerated Cost Recovery System (MACRS), meaning you can spread the cost of desks, chairs, filing cabinets, and similar items across eight tax years on a front-loaded schedule. Most small businesses don’t do that, though. Two faster options — 100% bonus depreciation and Section 179 expensing — let you deduct the entire cost in the year the furniture is placed in service, and a de minimis safe harbor lets you skip depreciation altogether on low-cost items. Furniture depreciation for taxes almost always comes down to picking among those four approaches.
What Furniture Qualifies
The IRS allows depreciation on property you own that is used in a business or income-producing activity, and furniture is explicitly included.1Internal Revenue Service. Topic No. 704, Depreciation Three conditions all have to be true: you own the furniture, you use it for business, and it has a determinable useful life longer than one year.2Internal Revenue Service. Publication 946 – How To Depreciate Property
Qualifying items include desks, chairs, conference tables, filing systems, safes, bookshelves, and similar fixtures.2Internal Revenue Service. Publication 946 – How To Depreciate Property Lamps, electric fans, and freestanding shelving units count as long as they serve the business. Used furniture qualifies the same way as new.
Furniture used exclusively for personal purposes cannot be depreciated. If a piece serves both business and personal use, you can only depreciate the business-use portion, and you need records that support the split. Without them, the IRS can disallow the whole deduction.
100% Bonus Depreciation
Under the One, Big, Beautiful Bill Act signed into law on July 4, 2025, businesses can deduct 100% of the cost of qualifying property in the first year it’s placed in service.3Internal Revenue Service. One, Big, Beautiful Bill Provisions This applies to most qualifying business property acquired after January 19, 2025, and the 100% rate is now permanent, with no scheduled phase-down.4Internal Revenue Service. Treasury, IRS Issue Guidance on the Additional First Year Depreciation Deduction
Bonus depreciation has two advantages over Section 179. There is no dollar cap on how much you can deduct, and bonus depreciation can generate a net operating loss, which means a large furniture purchase can offset income from other years through NOL carryforward rules. A business furnishing a new office with $200,000 in furniture can take the full write-off in year one without worrying about a taxable income limitation.
The furniture has to be MACRS property with a recovery period of 20 years or less, which 7-year office furniture easily satisfies. It also has to be its first use by your business. You can buy used furniture from a third party and still claim bonus depreciation, but not on furniture you already owned and simply moved.
Section 179 Expensing
Section 179 also lets you expense the entire cost of qualifying furniture in year one. For the 2025 tax year, the maximum Section 179 deduction is $2,500,000, and the deduction begins phasing out once total equipment purchases exceed $4,000,000.5Internal Revenue Service. Instructions for Form 4562 These limits adjust annually for inflation.
Desks, chairs, filing cabinets, and shelving all fit within the tangible personal property that qualifies. Used furniture counts as long as it’s newly acquired by your business; transfers from a related company or gifts don’t qualify. The furniture must be used more than 50% for business in the year it’s placed in service.
The biggest practical limit: your Section 179 deduction for the year cannot exceed your taxable business income. Unlike bonus depreciation, Section 179 cannot create or increase a net operating loss. If your business earns $30,000 and you buy $50,000 in furniture, your Section 179 deduction is capped at $30,000, and the unused $20,000 carries forward to future years rather than disappearing.
Section 179 is the better pick when you want to control how much you deduct. You can elect a partial amount, which bonus depreciation doesn’t let you do.
De Minimis Safe Harbor for Low-Cost Items
If individual furniture items are inexpensive, you may not need to depreciate them at all. The de minimis safe harbor election lets you deduct the cost of tangible property immediately, as a business expense rather than a capital asset, if the cost per item or invoice falls below a threshold.6Internal Revenue Service. Tangible Property Final Regulations
- $2,500 per item or invoice for businesses without audited financial statements (this covers most small businesses and sole proprietors)
- $5,000 per item or invoice for businesses with applicable financial statements
A $200 desk chair or a $400 bookshelf falls comfortably under this threshold. You expense it in the year of purchase, no depreciation schedule required. The election is made annually on your tax return and applies to all qualifying purchases for that year.
Standard 7-Year MACRS Depreciation
Standard MACRS is rarely the best choice for furniture now that 100% bonus depreciation is permanent, but it remains available as a fallback. A business expecting much higher income in future years might prefer to spread deductions out. Rental property owners furnishing units sometimes use MACRS to match deduction timing with rental income.
MACRS for 7-year property uses the 200% declining balance method, which automatically switches to straight-line partway through the recovery period when that produces a larger deduction.7Office of the Law Revision Counsel. 26 U.S. Code 168 – Accelerated Cost Recovery System Under the half-year convention, the year-by-year percentages applied to the furniture’s original cost are:
- Year 1: 14.29%
- Year 2: 24.49%
- Year 3: 17.49%
- Year 4: 12.49%
- Year 5: 8.93%
- Year 6: 8.92%
- Year 7: 8.93%
- Year 8: 4.46%
Each percentage applies to the unadjusted basis, not the remaining balance.2Internal Revenue Service. Publication 946 – How To Depreciate Property A $10,000 desk generates a $1,429 deduction in year one, $2,449 in year two, and so on through year eight. The schedule stretches to an eighth year because the half-year convention treats furniture as placed in service at the midpoint of year one regardless of the actual date.
Half-Year and Mid-Quarter Conventions
The half-year convention is the default. All furniture placed in service during the year is treated as though it started being used on July 1, which is why year one’s deduction is roughly half of what the 200% declining balance rate would otherwise produce.8Internal Revenue Service. Depreciation Frequently Asked Questions
A different rule applies if more than 40% of all personal property you place in service during the year goes into use in the last three months. In that case, you must use the mid-quarter convention, which assigns depreciation based on the quarter the furniture was actually placed in service.8Internal Revenue Service. Depreciation Frequently Asked Questions Loading up on furniture in December can accidentally trigger the mid-quarter convention for everything you bought that year, shrinking the first-year deduction.
Basis and Placed-in-Service Records
The furniture’s depreciable basis is the purchase price plus any costs needed to get it into working condition: delivery charges, assembly fees, and installation costs.2Internal Revenue Service. Publication 946 – How To Depreciate Property Sales tax can be included in the basis if you don’t deduct it separately.
You also need the placed-in-service date, which is the day the furniture was actually ready and available for use, not the order date or the delivery date. That date determines which tax year picks up the depreciation and which convention applies. Furnish an office in stages, and each batch has its own placed-in-service date.
Keep purchase invoices, receipts, and delivery confirmations. If any furniture is used partly for personal purposes, maintain a log supporting the business-use percentage. Retain these records for as long as you own the asset plus three years after you file the return reporting its disposition.
Reporting on Form 4562
Furniture depreciation is reported on Form 4562, Depreciation and Amortization, which is organized by method:5Internal Revenue Service. Instructions for Form 4562
- Part I covers Section 179 expensing, where each item, its cost, and the amount you’re electing to expense is listed
- Part II covers bonus depreciation (the special depreciation allowance), reported on Line 14
- Part III covers standard MACRS depreciation, including placed-in-service date, basis, recovery period, convention, and method
The total from Form 4562 flows to the appropriate income schedule. Sole proprietors report on Schedule C; partnerships and S corporations use Form 1065 or Form 1120-S. The depreciation reduces net business income and, in turn, tax liability for the year.
One detail catches people off guard: Form 4562 is only required in the year you first place property in service, claim Section 179, or claim the special depreciation allowance. In later years, if you’re just continuing standard MACRS on furniture already in service and have no new acquisitions, depreciation goes directly on your business income schedule.
Selling or Disposing of Furniture
Depreciation gives you deductions while you own the furniture, but the IRS reclaims some of that benefit at sale. Under Section 1245, any gain on the sale of depreciable personal property, including furniture, is treated as ordinary income to the extent of the depreciation you previously deducted.9Office of the Law Revision Counsel. 26 USC 1245 – Gain From Dispositions of Certain Depreciable Property
Say you bought a $5,000 conference table, took $5,000 in depreciation over several years (dropping your basis to zero), and then sold it for $1,500. That $1,500 gain is ordinary income, not capital gains, because it falls within the amount of depreciation you claimed.10Internal Revenue Service. Publication 544 – Sales and Other Dispositions of Assets The same recapture rule applies whether you used regular MACRS, Section 179, or bonus depreciation. Any special depreciation allowance or Section 179 deduction counts toward the recapture amount.
If you throw furniture away or donate it, the remaining undepreciated basis becomes a deductible loss in that year, subject to charitable donation rules if donated. Once an asset leaves your business, its depreciation stops. Continuing to depreciate furniture you’ve already disposed of is a common and costly mistake.