3 Surprising Financial Benefits Of Having A Virtual Office
As the world rapidly moves towards a virtual model of working post-pandemic, the role of virtual offices will continue to become more prominent. Around the U.S. commercial office space remains largely uninhabited as many companies continue to stick to a remote-first work model. On the other hand, more businesses are realizing the need to provide a common workspace for employees that ticks the right balance between a virtual and physical office space. This in turn has led to an increase in demand for virtual offices. With soaring popularity and predictions for more hybrid workplaces, virtual offices seem to be on the tongue of most CEOs right now. However, virtual offices do more than provide the benefits of an in-office environment. They can also bring some surprising financial benefits- for the employee and the employees.
For Everyone: Enjoy The Tax Write-Offs That A Virtual Office Provides
Virtual office users are allowed to deduct the monthly cost of a virtual office as part of their expenses on their tax returns. This can be particularly useful as we move towards a hybrid workplace, where employees are splitting their time between working from home and working from a remote office. Your office costs for the year (and overall costs) decline and saves you money on your business taxes.
Employees can enjoy the tax benefits of virtual offices too. The cost of traveling to and from virtual office locations for meetings can qualify as business travel costs, which are an allowable deductible expense.
However, keep in mind that it does need to satisfy the IRS’s criteria for deductible expenses. This includes being “away from home” and necessary or reasonable. Capitalizing on tariff write-offs for micro-enterprises like these can be beneficial for smaller businesses and their employees, as it keeps their overheads and tax obligations down, while also passing those benefits onto its employees. As a bonus, it still allows you to claim home office expenses as a deductible on your tax return as long as you pro-rate it according to the time and square footage used.
For The Business: The Perks Of A Physical Office Without The Office Overheads
For a business, keeping its overheads costs under control is key to seeing a suitable return at the end of the year. For many businesses, the cost of commercial space often accounts for a sizable portion of their annual overheads budget. While there are many arguments for going fully remote, there are also valid reasons you may want to maintain a physical office location. For instance, having a virtual office for your business allows workers to telecommute from home while also reducing the initial investment.
Virtual offices may also work out cheaper in other areas. Virtual service providers also offer services like virtual receptionists, meeting spaces, and business support tools including video conferencing equipment or office supplies when you need them.
For The Employee: Reduced Commuting Costs Means Better Disposable Salary
Another often undiscussed financial benefit of virtual offices is the reduced costs it can result in for employees. Virtual offices allow workers to work from a location more convenient to them. In some cases, this is often closer to their home or away from high-cost areas like downtown cities. It also allows employees to work from a virtual office when needed, and adopt remote working for the rest of the time. This cuts down on their transport costs and leaves them with more of their wages at the end of the month. The knock-on effect of this can be wide-ranging for a business’ employees. For instance, it could help employees save more money, achieve higher rates of homeownership, or move to lower-cost cities.
So can moving to a virtual office leave you better off financially? Absolutely- if it’s the right fit for your business. Once it is well suited, it can help you gain the benefits of a local presence without the accompanying costs.