When new employees join your business, are they saddled with hand-me-down technology that’s seen better days? If you’ve tried to save money by stretching your computer capabilities over the course of a decade – only to be stuck when a computer “unexpectedly” stops working – Section 179 can help you break the cycle.
We see technology as a way to make life easier, yet when your tech begins to fail, it no longer serves its purpose. In fact, it creates new troubles and costs you more money in downtime and lack of productivity than it would cost to purchase shiny new equipment. Here’s the good news: the U.S. government understands this desire to save money by upgrading your equipment less often, and they’re combating it with Section 179.
What’s the Section 179 tax deduction?
Well, instead of waiting for your equipment to conk out on you, Section 179 lets you deduct the full price of any qualifying equipment or software purchased or leased during the year. In addition to purchases like commercial use vehicles and improvements to nonresidential property, this includes:
- Business equipment that you purchase, finance or lease
- Software with a non-exclusive license that has not been substantially modified
- Office equipment like servers and printers, routers, network switches and network security appliances
Now, there’s no reason to put off upgrading your technology when you can write off the full amount. Businesses that buy, finance or lease less than $2.5 million in new or used businesses equipment qualify. After you reach the $2.5 million cap, the deduction decreases on a dollar for dollar basis up to $3.5 million. Just make sure that you put the equipment and software into use by December 31, 2018. For questions about your eligibility, consult with your accountant.
Not sure if you need an upgrade?
It depends on your usage, but a guide is five to seven years for computers, three to five years for hardware (like industrial printers and switches), and six to 10 years for other qualifying items like vehicles and furniture. If you notice a significant decline in performance or if downtime is hindering your workflow, it’s probably time for new equipment.
Section 179 allows you to stay competitive in the market and support your customers effectively with up-to-date tech. Are you ready to take your technology to the next level? Contact us today to talk about the best options for your business.Tags: irs section 179 deduction, section 179 expense, section 179 qualifying vehicles, section 179 tax benefits