Being a small business and technology company, the team at TechSeven has spent long hours studying Section 179 to better understand how to save our business money and how to help our partners do the same. Section 179 of the federal tax code was designed specifically to help spur the growth of small businesses by encouraging us to invest in ourselves! At TechSeven Partners, we take advantage of this tax break every year to help propel us towards our goals.
We are encouraging all of our current and prospective partners to take inventory of your business technology needs and take any necessary action now. We can work with you to put solutions in place that will have your business ready to take on 2016!
Section 179 Overview
Here is an example of how Section 179 can work FOR You:
Let’s say your business buys $20,000 of technology equipment during the course of 2015. Traditionally, when you make that purchase, you are able to write that off little bits at a time through depreciation. By doing it this traditional way, you would eventually get to write off the entire purchase price, but it may take multiple years to do so. This is where Section 179 steps in.
Instead of writing it off under depreciation, Section 179 encourages businesses to make qualified business purchases by allowing them to write off the entire cost up to $25,000 on their 2015 tax return. The result for a small business taking advantage of this tax incentive is a reduced tax liability and a positive investment into the future of their business.
What Tech falls under Section 179?
Here are just a few of the many examples of technology that may fall under Section 179:
- Hardware such as workstations, laptops, tablets, and phones
- Network security appliances & routers
- Server improvements, scanners, and printers
- Non-exclusive software that is not cloud based (off-the-shelf software)
Advice from One Small Business to Another
Section 179 can be a great way to reduce your tax burden and use those dollars to invest back into your business. Here are a few best-practices we put into place every year to ensure we understand and fully maximize this deduction.
A Few More Particulars on Section 179
- The amount of the deduction for Section 179 for 2015 may change. We witnessed this first-hand last year as write-off limits increased to $500,000 for 2014 returns. TechSeven is monitoring closely what Congress does with extender bills that could increase the 2015 limits. We encourage you to do the same!
- You can write off equipment that you buy or lease, but for leasing situations it must be a capital lease. A regular operating lease without a small buyout option does not qualify.
- Qualifying Section 179 Property can be expensed up to the maximum of $25,000. However if you have made Section 179 Property Purchases over $200,000 for 2015 then the $25,000 is reduced dollar for dollar for everything over $200,000.
Don’t forget about Software!
Many businesses overlook that software can be included in your Section 179 write-offs. With that said, there are a few requirements the software must meet to qualify:
- Your business must use it for an income-producing activity.
- It needs to be available for general purchase and not be an exclusive license for your business.
- It must have a determinable useful life.
Talk to your CPA
While we at TechSeven spend a great deal of time investigating and staying up-to-date with Section 179, we are not tax advisers. We strongly encourage you to connect with your tax advisor now to discuss this deduction and how it can work with your business.
Why TechSeven for your Section 179 Tax Breaks
At TechSeven, we treat our clients the same way we like to be treated. We understand the importance of reliability, simplicity, and professionalism. With all of our partners we strive to provide solutions that utilize the highest quality technology available, and we implement that technology in a clean, user-friendly, and manageable fashion.
Get in touch with TechSeven before December 31st and allow us to use our knowledge of Section 179 and our IT expertise to help your business! Reach out now and learn how to:
- Save money on technology
- Improve Efficiencies for your business
- Secure your business and it’s sensitive data
Areas of Importance to Consider for 2016 and your Small Business
1. Hardware – Computer workstations, Printers, Scanners, Routers, and others hardware needs are great to consider. We strive for innovative and efficient solutions for every SMB partner’s hardware needs.
2. Data Security – as a small business, protecting your client’s data is a high priority. TechSeven prides itself on providing reliable and secure solutions.
3. Audio/Video – Meeting room media solutions, TV screens, distributed audio, and other A/V needs are great to think about for 2016. We love providing solutions to improve the functionality of your office’s audio and video needs.
If we haven’t mentioned it here, not to worry. We promise to find just about any Small Business IT Solution that your business may need! So please, don’t hesitate to call us as 2016 approaches! Grab some additional technology tax write-offs and make sure your small business kicks off the new year right!