Did you know that in 2020, there is a bonus 100% depreciation deduction? What about the fact that you can deduct both hardware and software purchases, up to $1,040,000 (a limit increase from last year)?

For many, the end of 2020 couldn’t come fast enough. For business owners discussing tax strategies with their accountants, there is still a little time left to make smart year-end technology purchases that you can use as tax write-offs in just a few short months.

Upgrading your technology solutions gives you the perfect opportunity to start 2021 off as productively as possible. You can also put things in place that you may have been meaning to implement but haven’t had a chance yet. Such as, security software for remote workers or a new server to replace one that’s past its prime.

If you’re wondering how to position technology purchases for your Tucson business for 2020 tax deductions, we’ll go through what can be deducted and a strategy for making the best upgrade choices.

Technology Deductions Under Section 179 (Form 4562)

It’s important to understand the different types of technology purchases that you can deduct per Section 179 of Form 4562. You’ll want to discuss how to position your deductions with your accountant and the best purchases to make with an IT professional, like ECN IT Solutions.

Here are the different categories of technology that are deductible under Section 179.

Computers/Servers

You can deduct the cost to buy or finance servers, desktops and laptops, which gives you the opportunity to upgrade those which may be past their prime.

Off-the-Shelf Software

Software purchases are also deductible as long as the software is not custom made for your company and is publicly available.

Office Equipment

You can also deduct office equipment, which includes anything from a new mesh network system to a copier/printer.

Security Cameras

You can deduct equipment that is attached to a building, which includes security camera systems.

Cellular Technology

Smartphones and cellular technology are another category of potential equipment purchases that you can deduct. This would include both phones and tablets.

How to Choose the Best Year-End Technology Buys

You want to be strategic about any year-end purchases and not just rush to buy something before December 31st, so you can use it as a tax write-off.

Here are several areas of technology upgrades to consider when deciding how to allocate your budget.

Cybersecurity Improvements

There’s been a seven-fold increase so far in 2020 in the number of ransomware attacks, compared last year. Getting hit with a malware infection or a data breach can be devastating, and events like that cause many companies to close.

It’s a good idea to have a cybersecurity assessment done by an IT professional so you’ll know any areas of vulnerability and can plan to address those while planning year-end IT investments.

Remote Worker Productivity & Security

Many Tucson businesses now have remote workers when they started the year off without any. One long-lasting legacy of the pandemic is the fact that more employees will be working from home on a permanent basis.

Look at technology that remote workers may need to stay secure, such as remote IT managed services or a business VPN.

You also want to consider cloud communication and productivity tools, like VoIP and platforms like Microsoft Teams.

Look at Immediate Computer Needs

A study released by Microsoft found that keeping business computers in operation too long (past 4 years) was costing companies $2,736 annually per each device.

If you have older computers, you can cut your losses and get a tax deduction as well by making those upgrades before the end of the year.

Older computers are found to have issues with:

  • More downtime
  • Higher cybersecurity risk
  • Loss of productivity
  • Higher rate of data loss

Network Improvements

Your office wireless network is the heart of all online activities. It doesn’t matter how fancy the cloud software you use is, if your network drops data packets and has limited reach, your office productivity suffers.

Investigate network improvements you can make that will have a far-reaching impact on efficiency and productivity. A faster network speeds up just about everything in your office.

Consider improvements such as:

  • Upgrading your router to a Wi-Fi 6/WPA3 device
  • 5G enabled equipment
  • Use of a mesh network to improve multi-device handling
  • Extending Wi-Fi in other areas of your business (courtyard, warehouse, etc.)
  • Use of ethernet connections where possible
  • Using Quality of Service to prioritize bandwidth use

Get Help from ECN IT Solutions to Plan Smart Tech Upgrades

We’ll help your Tucson business with a strategic and cost-efficient plan for year-end technology upgrades that will make a big difference in your bottom line.

We’re here and ready to discuss your year-end technology strategy! Reach out at 520-355-7553 or through our website.