Many people – business owners included – may not be aware of the many ways computer upgrades can save them money. There is the increased connectivity and productivity with the subsequent bottom-line benefit; there is the security benefit, which ends up blocking many more cyber threats and potential costly data breaches; and there is the tax deduction companies can take for their computer upgrades, which gives them a sizeable rebate on monies invested in upgrading their computer network.
Section 179 Computer Upgrade Deduction
Specifically, under Section 179 of the US tax code, you can claim up to $500,000 in deductions for computer upgrades. To quote from the Section179.org website:
- Section 179 Deduction: Until further notice, Section 179 is permanent at the $500,000 level. Businesses exceeding a total of $2 million of purchases in qualifying equipment have the Section 179 deduction phase-out dollar-for-dollar and completely eliminated above $2.5 million. Additionally, the Section 179 cap will be indexed to inflation in $10,000 increments in future years.
- A 50% Bonus Depreciation will be extended through 2019. Businesses of all sizes will be able to depreciate 50 percent of the cost of equipment acquired and put in service during 2015, 2016 and 2017. Then bonus depreciation will phase down to 40 percent in 2018 and 30 percent in 2019.
IMPORTANT: Section 179 for Current 2016 Tax Year
Section 179 can provide you with significant tax relief for this 2016 tax year, but equipment and software must be financed and in place by midnight December 31, 2016. Use this 2016 Section 179 Calculator to see how much the Section 179 tax deduction can save your company.
Section 179 FAQ
There are FAQs on the Section 179 page (found at the first link) followed by answers that go into pertinent specifics, all of which pertain to business owners who want to do some serious investing in computer upgrades but aren’t quite sure of the tax rules and regulations. Perhaps the most important question of them for most people may be, “What is the deadline for claiming deductions?” The answer to which is: Section 179 for 2016 expires at midnight, 12/31/2016. If you wish to deduct the full price of your equipment from your 2016 taxes and take advantage of the new higher deduction limits, it must be purchased and put into service by then.
Many businesses are finding Section 179 Qualified Financing to be an attractive option in 2016, especially since the year-end increases don’t leave much time for action. Apply today to increase your chances of qualifying in time for the Dec. 31 deadline.
Have Questions About Computer Upgrade Benefits?
If you need further questions answered about how computer upgrades can save you and your enterprise money, please talk to a specialist at Radius Executive IT Solutions, which is a proven leader in IT consulting and computer services. Call (978) 528-0110, or send us an email at email@example.com, and we will respond to your concerns right away.