Besides being the beginning of the holiday season, October is the time many business owners are looking ahead to things they can do by the end of the year to positively impact their tax bill.
You still have several weeks to make any IT upgrades that can improve your business and give you a few more deductions at the same time. Section 179 of the tax rules lays out different business purchases that can be deducted and that qualify for a bonus 100% depreciation credit.
This bonus depreciation has been in place for a couple of years now and it boosts the tax incentive of making purchases for your business at the end of the year. Not only can you deduct the cost of the equipment, hardware, etc., you can also take 100% of the depreciation upfront.
What Type of Technology Purchases Qualify for Tax Credits?
Several different types of purchases can qualify for the deductions and that can also improve your IT infrastructure.
Purchases of both new and used equipment qualify, as long as the used equipment is new to you and was purchased within the proper tax year.
A quick overview of the categories:
- Hardware: This would be computers, servers, network equipment, and other physical devices or technology components
- Software: Off-the-shelf software (not custom-built) qualifies for deductions
- Office Equipment: This can include things like copy machines, headsets, VoIP desk phones, and more.
- Security Systems: Security systems that you use throughout your building also qualify for deductions.
- Communications equipment: Any hardware or other physical equipment (cabling, etc.) used to facilitate communications
- Other non-technology items: You’ll also find that you can take deductions and depreciation on non-technology items like company vehicles and other types of equipment
When planning your year-end IT upgrades, you want to look at purchases that will enhance your business, fill an IT security need, or provide a payback in productivity.
Here are some of the popular upgrades that many businesses are making.
Cloud Security Cameras
Cloud security cameras are easy to install and easy to use. These systems are also very affordable to small businesses. They’re designed to allow you to scale the system for your needs with additional cameras or intercom systems.
Adding a new security system may also decrease premiums for any property insurance that you have, furthering the financial benefit.
Digital Door Access Systems
Using keys and locks for your doors is becoming outdated. It’s costly to have to continue to get keys remade and change locks when someone quits unexpectedly. Using a digital access system means no more keys to keep up with. You can also change entry codes virtually any time you want.
An added benefit to installing a keyless access system is that you get a log of all user access to your building or any sensitive rooms (like an equipment supply room).
Video meetings have become the standard way to interact during the pandemic. If your video or audio is of poor quality that reflects badly on your business when you’re meeting with a prospective client.
Investing in better A/V technology can improve your online meeting experience and the quality of your meetings, along with the impression that you make on clients.
Hardware to Enable Your Remote Team
Remote teams are no longer an anomaly, they’re part of the normal fabric of most organizations. 80% of surveyed business leaders stated that they plan to allow employees to work remotely post-pandemic either part or full time.
In order for your work-from-home employees to be just as productive (or more productive) than when at the office, they need to have the same types of equipment.
Investing in hardware and office equipment for your remote team can ensure they’re fully enabled to do their best.
Windows 11 Computers
With Windows 11 just released and currently rolling out, it’s the perfect time to review your computers and replace any that are too old to upgrade to the new operating system.
New PCs with Windows 11 already loaded are available now and can offer a tax break early next year on your 2021 taxes.
If your company prefers using on-premises software that you run from your own server, it’s a great time to upgrade. Software purchases are also deductible under the Section 179 guidelines.
This can include email software or on-premises versions of Microsoft Office. Any “off the shelf” publicly available software qualifies.
Get Help Updating Your IT Environment from Texas I.T. Pros
Don’t purchase new IT without expert help. Texas I.T. Pros can work with your Denton or Wise County business to review your current setup, budget, and goals for the future to help you make the best upgrade decisions.
Contact us today to learn more! Call 940-239-6500 or reach out online.