Taking Advantage of Section 179
An awesome incentive designed to help businesses grow with a huge tax break on current, up-to-date equipment that’s purchased or financed during the year.
Section 179 is an incredibly helpful tax code that allows you to deduct the full purchase price of equipment or software that qualifies. Essentially, you can deduct the full purchase price from your gross income rather than capitalizing and depreciating the asset over the item’s useful life. This is particularly helpful for businesses that want to grow but can’t afford to invest in their business without impacting their bottom line. You get a huge tax break that enables you to stay current with the latest technologies. Here’s a quick breakdown:
- Deduction limit: The deduction limit is $1,000,000 for new or used equipment that is purchased before December 31, 2019 at midnight.
- Spending cap: The spending cap is $2,500,000 that can be spent before the deduction can be granted to you.
- Bonus depreciation: The bonus depreciation of 100% can be taken after the spending cap is reached.
Your technology partner should be talking to you about using this awesome incentive to keep your infrastructure up-to-date. Otherwise, you run the risk of operating with old, outdated technology that can leave you struggling with:
- Malware infections and/or viruses on the network
- Slow, lagging performance on computers and other devices
- Non-compliance violations that result in huge fines
As long as the equipment you’re purchasing or leasing qualifies, you’re able to use the deduction. You might choose to upgrade the following:
- Off-the-shelf software
- Equipment, such as machinery, for business use
- Office furniture
- Property for the building that’s not structural
- And much more
Naturally, we recommend getting a head start on some technologies that are coming up to their end-of-life or end-of-support deadlines. You must make your investment before December 31, 2019 at midnight to qualify.
What technologies should be upgraded before the end of the year?
There are two main technologies we strongly urge you to upgrade before the end of the year. If you don’t act fast, you may struggle to get them upgraded in time to take advantage of Section 179. Why? Because IT companies all across the country are booking up fast with projects to upgrade from the following:
- Windows 7: This popular operating system will reach its end-of-support date on January 14, 2020. This means Microsoft will stop releasing any sort of bug fixes or security patches to keep the operating system safe against unauthorized access. You will also likely experience compatibility issues with your legacy applications. Take a quick review of the computers within your environment and make sure they support an upgrade to Windows 10. If they don’t, you may have to purchase new computers.
- Windows Server 2008 R2: Windows Server hasn’t had mainstream support since January 13, 2015. Now, Microsoft is ending support altogether on January 14, 2020. Similar to Windows 7, Microsoft will no longer release any sort of bug fixes or security patches to keep the system safe against cybercrime. You may also experience incompatibility issues with other systems and applications. All three available editions, including Enterprise, Datacenter, and Standard, will be unsupported after the deadline.
Let’s talk about helping you upgrade as soon as possible. We’re the preferred choice for Norfolk IT support. Call (757) 255-8952.
Like this article? Check out the following blogs to learn more: