Timely Tax Benefits For Your Business IT Infrastructure (Section 179)
Helping businesses understand and take advantage of opportunities like Section 179 is part of the TotalCare SWAT Systems clients receive. It is one of the ways we work with our clients to help their entire business in addition to supporting IT needs.
Now is the perfect time to consider purchasing hosted phone systems, IT hardware and cyber security equipment or other business IT infrastructure needs. That’s because you will be able to write off the entire cost with the IRS Section 179 deduction.
There are limits, but for most small businesses, up to $1,040,000 worth of qualifying equipment can be written off on their 2020 tax returns.
IT Hardware and Cyber Security Equipment to Consider
- Office equipment, including hosted or VOIP phone systems
- Computers, servers and other hardware
- Software if it is:
- “Off the shelf” (not substantially modified)
- For income-producing activity
- Usable for more than one year
- Available to the general public
- Subject to a non-exclusive license
- NOTE that custom code, databases and websites do not qualify
Items must be for business use and purchased between January 1 and December 31 of the tax year to qualify.
Section 179 vs Bonus Depreciation
The difference between the two is new vs. new to you equipment. With Bonus Depreciation you cannot write off new purchases of used equipment (“new to you”). You can with Section 179. Also, Section 179 allows you to write off the entire cost in the year that you purchased it rather than depreciating it over several years.
Start Now and Have Time to Make Decisions
Section 179 can change each year/mid-year without notice so it’s best to take advantage of this tax code while it’s available. It’s a great opportunity for small businesses to maximize their purchasing power.
Purchases need to be made BEFORE December 31 to qualify. So, give yourself time to consider all your options when making purchases. Start planning now.
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