Is a Security System Tax Deductible?

Quick Answer: ✅ Yes — a security system for your business location (or home office) is deductible. The monitoring service is expensed annually. The equipment may be expensed immediately via Section 179 or depreciated.

The Short Answer

If you install a security system — cameras, alarms, access control, monitoring service — at your business location, it's a deductible business expense. Monthly monitoring fees are fully deductible in the year paid. The hardware (cameras, control panels, sensors) can usually be expensed immediately under Section 179 or the de minimis safe harbor. Home office users can deduct a proportional share based on their home office percentage.

IRS Rules for Deducting a Security System

The IRS allows security system deductions as ordinary and necessary business expenses:

1. Business location — A security system at your office, warehouse, retail store, or other business property is fully deductible.
2. Home office — If you have a qualifying home office, you can deduct the business-use percentage of a home security system. If your home office is 15% of your home, you deduct 15% of the security costs.
3. Equipment vs. service — Monthly monitoring fees are current expenses (deductible when paid). Equipment purchases may be expensed under Section 179 or depreciated over its useful life.

Source: IRS Publication 535 — Business Expenses; IRS Publication 946 — Depreciating Property

What Security Costs Are Deductible?

✅ Deductible:

• Monthly/annual alarm monitoring service
• Security camera systems (purchase and installation)
• Alarm systems and motion sensors
• Access control systems (keycard, keypad)
• Security lighting
• Safe or vault (for business assets)
• Guard service fees
• Video doorbell (Ring, Nest) for business use
• Cybersecurity software and services (firewalls, antivirus, VPN)

❌ Not Deductible:

• Personal home security with no home office (entirely personal)
• Security system for a personal vehicle (unless the vehicle is exclusively business-use)

How Much Can You Deduct?

Monitoring services: 100% deductible (business location) or pro-rated (home office).

Equipment: Fully deductible in year one via Section 179, or depreciated over 5-7 years.

Example (business location):

Example (home office, 12% of home):

How to Categorize in QuickBooks

• QBO Category: "Security Expense" or "Office Expenses" (monitoring service); "Equipment" or "Fixed Assets" (hardware)
• Schedule C Line: Line 18 — Office Expense (monitoring) or Line 13 — Depreciation/Section 179 (equipment)
• Tip: Keep monitoring fees and equipment purchases in separate sub-categories. Monitoring is a straightforward annual expense; equipment may need depreciation schedules.

Common Mistakes to Avoid

1. Forgetting the home office proration — If your security system covers your whole house, you can only deduct the home office percentage. Don't deduct 100%.
2. Depreciating when you could expense — Equipment under $2,500 qualifies for the de minimis safe harbor (expense immediately). Over $2,500? Use Section 179 to expense it in year one.
3. Missing cybersecurity deductions — Antivirus, VPN subscriptions, password managers, and firewall hardware for business are deductible too. Don't think of "security" as only physical.
4. Not deducting installation labor — The cost of having the system professionally installed is deductible, either as part of the asset (depreciated) or as a current expense.

Record-Keeping Requirements

• Purchase receipts for equipment and installation
• Monthly monitoring invoices or annual statements
• Home office square footage calculation (if deducting proportionally)
• Section 179 election documentation (your CPA handles this at tax time)

Who Can Deduct a Security System?

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