Did you know your business can deduct up to $1,000,000 spent on most IT equipment and software purchases before the end of the year? If you have not done so already, now is a great time to consider taking advantage of the Section 179 tax deduction — a special federal IRS law that allows businesses to deduct all or part of the purchase price of certain qualifying business equipment. This tax deduction is a great opportunity to put substantial dollars back in your pocket for 2018!
"...as soon as the new year starts, Section 179 is over for 2018..."
The Section 179 tax deduction is a very effective tax deduction for small and medium businesses and can really make a difference to your bottom line at the end of the year. Full disclosure, we are not tax experts and recommend checking with your accounting and finance people first before making any major purchases. But from our understanding, all businesses that purchase, finance, and/or lease less than $2,500,000 in new or used business equipment during the 2018 tax year should qualify for the deduction.
How Does it Work?
The process is simple, as long as IT equipment and “off-the-shelf” software is acquired by purchase and for business use, it should qualify for the Section 179 deduction. The only additional stipulation is that the equipment/software must be purchased and put into service by 11:59 PM, 12/31/2018. So, as soon as the new year starts, Section 179 is over for 2018.
What Qualifies for a Deduction?
- Equipment purchased for business use
- Tangible personal property used in business
- Computers and related equipment
- “Off-the-shelf” computer software
- Office furniture and certain fixtures
Is There a Limit?
The 2018 deduction limit is $1,000,000, which is a large increase from last year (2017 deduction limit was only $500,000). It means your businesses can deduct the full cost of equipment from their 2018 taxes, up to $1,000,000 with a "total equipment purchased for the year" threshold of $2,500,000.
The Section 179 tax deduction is also a great opportunity to get a head start on the upcoming Windows 7 and Server 2008 end of life. Microsoft announced the official end of all support, patches, and updates for both the Windows 7, Server 2008, and Server 2008 R2 operating systems for January 14, 2020 (including paid support and security updates).
Please read our post here to learn more about recommendations on how to refresh your unsupported systems. Having these machines and operating systems running in your environment passed the end of life expiration will put your data at risk and make your business less secure. Take advantage of Section 179, and whatever leftover budget you may have, to save BIG.
Want to Learn More?
To learn more, visit section179.org, a free resource to answer questions related to the Section179 Tax Deduction, here: www.section179.org/section_179_deduction.html
There is also a helpful, and free, Section 179 calculator to see how much you can save in real dollars, here: http://www.section179.org/section_179_calculator.php
THEN contact us and we can help you take advantage of Section 179 before the 12/31 deadline -- we offer free consultations and quotes!
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