Tax Deductions for Leased Office Spaces: What Small Business Owners Should Know

Leasing an office space is a major investment for small business owners, but the good news is that many of the associated costs can be deducted at tax time. Understanding which expenses qualify and how to properly track them can lead to significant savings — and ensure you're not leaving money on the table. 

1. Office Rent 

One of the most straightforward deductions is your monthly office rent. As long as the space is used exclusively for business purposes, you can deduct the full amount of rent you pay each month. Be sure to keep a copy of your lease agreement and all rent receipts or payment confirmations. 

2. Utilities and Maintenance 

Utilities like electricity, water, heating, and even internet access are typically deductible when they're tied to your leased office. Cleaning services, garbage removal, and general maintenance can also count. These operational costs are necessary for running your business, so don’t overlook them. 

3. Office Supplies and Furniture 

Items such as pens, paper, printer ink, and other consumables are fully deductible as office supplies. Larger purchases like desks, chairs, and filing cabinets may need to be depreciated over time, depending on their cost and useful life — but they’re still valuable deductions. 

4. Shared Office Expenses 

If you're leasing space in a shared or coworking environment, your fees often cover multiple services such as receptionist support, boardroom use, and Wi-Fi access. These bundled costs are usually deductible, but it’s important to break them down and document what services are included. 

5. Improvements and Customization 

While major structural renovations usually aren’t deductible for leased spaces, smaller upgrades — such as painting, lighting, or adding shelves — may qualify as a business expense or be depreciated over time. Always check with your accountant on how to classify these types of improvements. 

6. Insurance 

If you carry commercial property insurance or general liability insurance for your leased space, those premiums are also deductible. Insurance is considered an essential business expense to protect your company and assets. 

7. Professional Services 

Hiring a tax professional or bookkeeper to help manage your office-related expenses may seem like an added cost, but their services are tax-deductible as well. Plus, they can help you maximize your return and avoid costly errors. 

Final Tip: Keep Detailed Records 

To claim these deductions confidently, you’ll need thorough records. Save all receipts, contracts, and statements related to your lease and office operations. A well-organized digital or physical filing system will make tax season much less stressful — and more rewarding.