Buying new tech items now could bring end-of-year tax benefits
By Tom Bull
There is less than a month left before 2023 is in the history books and we begin a new year. If you want to make any moves that will decrease your tax burden for this year, you don’t have much time left, as Dec. 31 is the cutoff. One thing that you can do to positively impact your business taxes is to purchase new technology.
Section 179 of the Internal Revenue Code allows businesses to deduct certain depreciable business expenses. Companies can take a maximum deduction of up to $1,050,000 for 2023. Many types of technology items fall under this deduction rule. They include computers, business phones, off-the-shelf software and more.
The 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 You can deduct the cost and 80% of the depreciation, plus you’ll be improving productivity by replacing an outdated system. You can deduct both brand new and refurbished (but new to you) devices.
Communication Hardware
Communication technology is also a category of equipment to consider. So, if you need a new phone system, now is a great time to convert to high-tech VoIP phone systems which offer loads of benefits for local and especially remote workers. If you are already 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
If you’ve been running an older version of Microsoft Office or QuickBooks, then it might be a perfect time to upgrade so you can recoup some of the expenses.
Office Equipment
Office equipment is a general category 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 getting your remote team are printers, scanners, ergonomic office chairs, Wi-Fi 6 routers (much better security than Wi-Fi 5), better webcams and more.
Audio-Visual Equipment
Video meetings have taken center stage since the pandemic, but many companies are still suffering from frozen pictures and audio that fades in and out during calls.
If you don’t have an optimized A/V set up for your meetings, it can make potential customers wary 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, rather than problematic call reception, can take center stage.
Tom Bull has been in the computer and technology field since 1981. He spent 25 years working with small businesses to manage their technology before starting Two River Computer in Fair Haven in 2006.
This article originally appeared in the November 23 – 29, 2023 print edition of The Two River Times.
