Section 179 Deduction for Technology Purchases
Nothing makes you love being an American more than paying taxes right? Wait….you don’t feel the same way? Than this post is just for you. A timely reminder around tax time of some awesome tax advantages there are for companies that invest in their technology.
So what is the section 179 deduction? Business equipment purchases have historically been allowed to be depreciated over time. Essentially you could write off a certain percentage of the cost of that equipment each year until it was fully depreciated. What the section 179 deduction does is allow you to write off the entire purchase price of that equipment up front in a single year. It’s a great tax benefit meant to incentivize businesses to invest in themselves and they equipment they need to do their jobs.
The limit for the Section 179 Deduction is one million dollars. It is good on new or used equipment including computers, software, servers, etc. It must be purchased or financed between Jan 1, and Dec 31 of 2019. There is a spending cap of 2.5 million dollars. That is the maximum amount that can be spent on equipment before the section 179 deduction begins to be reduced on a dollar for dollar basis. Bonus depreciation is generally taken after the section 179 spending cap is reached. In 2019 bonus depreciation is being offered at 100%.
What does this mean for us?
Well it means that you can stop putting off buying those new computers and servers you need and start reaping the benefits of a more productive network. It means you can buy the software you’ve been needing to improve your workflows. It means that you can pay less taxes! These tax benefits are available even if you lease the equipment. So there’s even a possibility of getting the deduction even if you don’t spend the money up front.
I’m not an accountant. I don’t have any qualifications to give anyone tax advice. This post was meant solely to get the word out to small business owners that there are some awesome tax benefits that apply to the world of technology purchases. Please seek the advice of an actual tax professional and check out some of the great resources they have online.
Many businesses seem to put off technology purchases because of the cost. However, they don’t see the vast opportunity cost associated with doing so. Slow systems, lost productivity, lack luster network security all carry significant costs. They can damage your brand and your relationships with clients. Section 179 allows business owners to get some great tax benefits that will allow them to keep their technology up to date and their business moving forward.
i.t.NOW stands ready to help. With an entire team of project professionals that can tackle all the hairiest IT jobs, and some great options for equipment leases available we can help you get your network up to snuff. Contact us today for your next technology project!