When making business decisions, you often will weigh several options before making an investment of nominal value. One of those considerations is often tax related. It is no different when deciding on office technology for your workplace. One way to take advantage of tax advantages through office technology purchases is through the Section 179 deduction.
What is it?
Section 179 is a deduction the IRS allows businesses, through IRS form 4562, to acquire business-use assets that include equipment and off the shelf (not custom developed) software and deduct the entire cost in a single year. The full expense is recorded for the year the assets were put into service and replaces the standard depreciation schedule of the asset(s).
How it can save you money.
The Section 179 total is taken off of your income for the given year and therefore reduces the costs of the assets you acquire in relation to your tax bracket. So, let’s take the small business tax rate for C-Corporations in 2020, 21 percent, to examine potential savings from using Section 179. If the cost of your assets is $25,000 you would essentially only be paying $19,750 due to saving $5,250 by the cost being taken from your income for that year. The limit for the deduction is a whopping $1,040,000 for 2020.
What about leasing?
You can take advantage of leasing and financing options through Section 179, there will just need to be an expectation of ownership taking place at the end of the specified term. When using leasing or financing with Section 179 the entire cost of the agreement is included for the year the assets were put to work in, not just the monthly payments in that year.
What office technology it can include.
Any piece of office equipment or computer is eligible whether new or used, it just has to be new to your organization. Typically, in terms of software, it needs to be off-the-shelf and not written/highly customized for your organization, have a useful life that can be determined and exceeds one year, and contribute to income-producing activity for your business, to be applicable to Section 179. It is always a good idea to check with your tax professional to ensure the proper requirements are adhered to before making decisions regarding influential tax outcomes for your organization.
At Copiers Plus, we always seek to find intuitive ways to bring our clients affordable options to modernize their workplace in terms of office technology. If you would like to learn more about how your organization can take advantage of Section 179 and improve productivity and security protocols across all departments, give us a call at 800-648-7081 or visit us online to schedule a complimentary analysis with one of our representatives. Don’t miss out on the savings 2020 can bring!
Drew Smith currently serves as Director of Communications for Copiers Plus. The company specializes in modernizing office equipment and increasing efficiencies in workplace communications throughout the state of North Carolina. To learn more about how Copiers Plus is providing their customers with innovative document solutions and enhanced printing transparency, visit www.copiers-plus.com. Drew would love to hear from you at [email protected].
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