Think Ahead to Tax Time for Deductions Today
Section 179 can improve your income tax bottom line
Imagine it’s the middle of April and your taxes are due.
As you look through your receipts and business-related expenses to find a nice deduction for year end, you are dismayed to find that receipts for office supplies and printer ink are all you can locate.
Didn’t you need an upgrade on your software system? Weren’t your office laptops in need of replacing?
Have you ever approached tax day and wondered why you didn’t make needed business investments that could be deducted under Section 179 of the tax code?
What is Section 179?
Section 179 of the tax code allows a business to upgrade needed equipment and deduct the full purchase price of qualifying equipment purchased or financed during the year. This means that buying or leasing equipment NOW before year end, will allow you to deduct the full purchase price on this year’s taxes!
According to the IRS website, this is one of the few government incentives available to small businesses that result in real tax benefits for small business owners. In the past, business owners who bought qualifying equipment had to wait years to write off the full amount of their business expenses through a process called depreciation. With today’s tax code, businesses can benefit with write offs on qualifying equipment in the current tax year.
According to the 2021 tax code, small businesses are eligible to write off qualified purchases up to $1,050,000 this year. There is a $2.62 million spending cap on equipment purchases under Section 179, making this a true small business tax incentive. Additionally, Section 179 offers 100% Bonus Depreciation on both new and used equipment for the entirety of 2021.
What purchases qualify for the Section 179 Deduction?
As required by the tax code, in order to qualify for the Section 179 Deduction, the equipment listed below must be purchased and put into use between January 1 and December 31 of the tax year you are claiming.
- Computer Software
- Equipment (machines, etc.) purchased for business use
- Office Equipment
- Property attached to your building that is not a structural component of the building (i.e.: a printing press, large manufacturing tools and equipment)
- Certain improvements to existing non-residential buildings: fire suppression, alarms and security systems, HVAC, and roofing
- Business Vehicles with a gross vehicle weight in excess of 6,000 lbs.
The above equipment qualifies whether new or used (but must be new to you), and qualifies no matter if it was purchased outright, leased, or financed. This is great news if you are working under budget constraints for your upgrades.
How can Helping Hand benefit you?
Helping Hand IT can help you upgrade your computer network while maximizing your Section 179 savings.
By running server assessments, we can ensure that the equipment you are buying is sized correctly for your applications. Our experts will help you integrate, install and implement all of your equipment and software to ensure a seamless transition.
When is the best time to buy?
Because of the lingering Covid-19 Pandemic, supply chains remain affected. In order to ensure that your equipment arrives on schedule, it is important to act quickly. The IT industry is seeing delays of up to 3-4 weeks on the delivery of certain computers and monitors.
Contact Helping Hand to schedule a free onsite assessment of your needs or call (630) 940-1718 to speak to one of our team members.
We’re moving September 30th to our NEW office location: 40W089 Illinois Route 64, Suite E, Campton Hills, IL 60175. We will remain open during the move to serve our clients!