There is less than a month left before 2021 is in the history books and we begin a new year. Many business owners are all too aware that tax season is right around the corner. The most successful business owners in the world are experts at delegating work to the right professionals at the right time—so try to learn from them. Just because you can do your accounting doesn’t mean you should. You should consider hiring a small business accountant before the data collection and analysis process becomes overwhelming
If you want to make any moves that will decrease your tax burden for this year, you don’t have much time left, as December 31st is the cut-off. One thing that you can do to positively impact your business taxes is to purchase new technology or seek out help from a reputable service like Acclime Thailand before the end of the year.
Section 179 of the tax code allows businesses to deduct certain depreciable business expenses. Companies can take a maximum deduction of up to $1,050,000 and a value of the property purchased up to $2,620,000 for 2021.
There also continues this year to be a 100% bonus depreciation deduction, which allows you to deduct the entire depreciation amount for a new purchase in the same tax year you expense the item.
This bonus means that you can recoup a bigger percentage of your technology upgrade cost in a few short months when you do your 2021 taxes.
Many types of technology categories fall under this deduction rule, including business phone technology, off-the-shelf software, and more.
Technology Deductions You Can Use
Following are the main technology categories that fall under the 179 deduction and ideas for upgrades you can make in each one to improve productivity, lower costs, and save time.
New or Refurbished Computers
If you have some computers that are getting older and more problematic, then replacing them before the end of the year can be a smart move. You can deduct the cost and 100% of the depreciation, plus you’ll be improving productivity by replacing an outdated system.
Generally, computers last approximately 1 year per $200 you spend. So, if you spent $800 on a business PC, then after 4-years, it should be replaced.
If you have any Windows 10 computers that do not have the required specifications to upgrade to Windows 11, they are also prime candidates for replacement.
You can deduct both brand new and refurbished (but new to you) devices.
Communication Hardware
Communication technology is also a category of equipment that can be deducted from your business taxes. So, if you are using a VoIP phone system, then you may want to consider equipment purchases like:
- Professional headsets for your employees
- VoIP-enabled desk phones
- VoIP conference room devices
Off-the-Shelf Software
Software that you purchase is also deductible, as long as it’s off-the-shelf, meaning it’s publicly available and not custom-made.
If you’ve been running an older version of Outlook on your server, then it might be a perfect time to upgrade so you can recoup some of the expense in a few short weeks or months, depending on when you file your taxes.
Security Systems
Cloud-based IP security cameras and keyless digital door locks are both popular security technologies. They reduce risk and make it easier for you to secure your building and keep an eye on things from your smartphone when you’re away.
Digital door locks remove the cost and hassle of having to keep up with physical keys or getting doors rekeyed when an employee leaves unexpectedly. Business owners also have a log of which people access which doors and at what time.
Office Equipment
Office equipment is a general category that is also included in Section 179 business deductions. If you have a remote team, you can make purchases now that will improve their productivity by ensuring they have the office equipment they need to do their work effectively.
Some potential office equipment purchases you might consider to enable your remote team are printers for sale such as uv flatbed printers, ergonomic office chairs, Wi-Fi 6 router (much better security than Wi-Fi 5), filing cabinet, video camera, and mouse/keyboard.
Marketing Equipment
In the modern business landscape, the utilization of appropriate marketing equipment holds immense significance in establishing a strong market presence. A high-quality camera and video equipment are essential for creating captivating visual content that resonates with the target audience. A reliable laptop or computer serves as the cornerstone for designing graphics, managing social media, and executing various marketing tasks. Graphic design software enables the creation of compelling visuals that reinforce brand identity.
Projectors and screens are invaluable tools for delivering impactful presentations and seminars. Trade show displays and custom digital signs for retail stores contribute to a brand’s visibility. Furthermore, audio equipment ensures the delivery of high-quality sound in podcasts and webinars. Mobile devices, content creation tools, data analytics platforms, and specialized equipment like VR or AR setups each play a role in shaping a comprehensive marketing toolkit tailored to a business’s unique needs and goals.
Audio-Visual Equipment
Video meetings have taken center stage due to the pandemic, but many companies are still suffering from frozen pictures and audio that weaves in and out during calls.
If you don’t have an optimized A/V set up for your meetings, it can make you look bad to potential customers, and also cost your team precious time because things have to be repeated due to spotty quality.
An investment in your audio-visual equipment is also tax-deductible. Beyond that, it ensures you have smooth meetings where the main points discussed can take center stage rather than problematic call reception.
Think about upgrading your microphone, webcam, sound, and other A/V components for better online meetings.
