What expense category does Figma fall under?

Wondering how to categorize your Figma expenses? Figma is a key design tool for many businesses. Let's break down where Figma fits in your expense categories and why getting it right matters.

Classifying Figma expenses

When you're categorizing Figma expenses, it's important to place them correctly for clear financial records. Here are key ways to classify Figma:

• Software expenses: Figma is a software tool, so it naturally falls under software expenses.
• Design and prototyping software: Within software, you can categorize Figma under design and prototyping software, reflecting its primary use.
• Software & web services: Since Figma is subscription-based, you might also classify it under software & web services.

Examples of Figma expenses

Figma expenses can arise in various scenarios within your business. Here are some examples:

• Team subscriptions: Paying for Figma's professional or organizational plans to enable team collaboration.
• Plugin purchases: Buying premium plugins or integrations to enhance Figma's functionality.
• Training costs: Investing in workshops or courses to train your team on using Figma effectively.
• Asset purchases: Buying design templates or UI kits from Figma's community.

For instance, if your design team uses Figma's Professional plan at $12 per editor per month, this recurring subscription cost should be categorized under software or design software expenses.

Tax implications of Figma expenses

When it comes to taxes, properly categorizing Figma expenses can impact your deductions. Here are some key points:

• Deductible business expense: Figma subscriptions are typically considered ordinary and necessary business expenses, which may be deductible.
• Capital expenses: If you pay upfront for a multi-year Figma subscription or purchase Figma plugins that have a useful life of more than one year, these costs may be considered capital expenses that need to be amortized over the asset's useful life for tax purposes.

Keeping accurate records of your software subscriptions helps in claiming appropriate deductions. Tax laws can vary, so it's wise to consult with an accountant to ensure you're handling software expenses correctly. Recording Figma expenses accurately not only keeps your books in order but can also maximize your tax benefits.

Let Ramp automate your expense process

Managing and categorizing expenses like Figma doesn't have to be a hassle. Ramp automates the expense process, helping you track software subscriptions effortlessly. With features like automatic categorization and real-time expense tracking, Ramp lets you maintain accurate financial records while you focus on what you do best.