It’s Time for Year-End System Replacement Planning!
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The end of year is coming up and your accountant is about to tell you to spend some money. Making any needed business purchases before the end of the year allows them to be deducted from your 2020 taxes.
To be deductible, the Internal Revenue Code simply requires that the business expenses be “ordinary and necessary” and technology definitely falls into those categories.
Additionally, technology purchases can be written off entirely, not just a percentage of them. Section 179 of the U.S. Tax Code allows businesses to deduct the cost of qualifying equipment and/or software that is purchased or finance during the tax year.
There is also a bonus depreciation that can be taken during the first year on new and used equipment.
Equipment/Software Deduction Limits:
· You can deduct up to $1,040,000 of new equipment/software purchases
· You can take 100% bonus depreciation on new/used equipment
So, you can see how now is the perfect time to do an evaluation of your technology needs and invest in your IT infrastructure before the new year.
Smart Ways to Invest In & Upgrade Your Technology
When approaching your year-end system replacement, you want to be strategic to ensure you’re getting the most value for your money.
This includes potentially upgrading your work processes and expanding capabilities rather than just upgrading something to a newer version of what you currently have.
Here are the considerations you want to review when planning your equipment and software purchases.
Review Current Workstation/Laptops for Replacement Needs
First, you’ll want to see which computer workstations and laptops used at your business need to be replaced. Studies show that PCs older than four years can cost more to operate than purchasing a new one.
Look for PCs that are approaching the 4-year mark or those that are older. You also want to look for any that are running an older operating system (such as Windows 7, which no longer receives security patches). These are the types of systems that should be replaced.
Consider Tablet Purchases
Tablets can do more than they used to and are taking over more desktop/laptop market share incrementally each year. Are there some activities where an iPad or other type of tablet would improve flexibility and productivity?
For example, if you have a sign-in for visitors at your front desk, doing this electronically on a tablet with an app such as Microsoft Lists, would be much less time-consuming than a physical paper sign-in sheet.
Review Your Network Infrastructure
How is your wireless network holding up? Many companies find that as they add more devices to their network, the bandwidth allocation gets less reliable, which can lead to dropped VoIP calls or frozen downloads.
Year-end is a perfect time to upgrade your network to improve speed and reliability. Here are two potential options:
· Switch to a Wi-Fi 6 Router: Wi-Fi 6 is now a year old and it’s designed for better multi-device handling and much better network security.
· Upgrade to a Mesh Network: Going from one router to a mesh network can improve signal strength and reliability throughout your office.
Invest in Software Upgrades
Most cloud software tools offer a discount when you pay for your subscription annually. This can then be deducted from your 2020 taxes using the Section 179 guidelines.
Here are some steps you can take to upgrade your software in a way that will directly impact your bottom line through productivity boosts:
· Survey employees about what they like/don’t like about the software they use.
· Work with an IT professional to identify areas for productivity improvements in your workflows.
· Look for time-consuming manual processes that can be automated with the right software.
· Consider all-in-one platforms like Microsoft 365 that give you several tools in one.
Improve Your Cybersecurity Posture
80% of companies have seen an increase in cybersecurity attacks this year. Just one data breach or ransomware attack can leave a small business devastated, and many of them never recover.
Have an IT security audit done this fall to identify areas of vulnerability in your cybersecurity and what equipment or software is needed to address those and strengthen your protections.
Equipment Needed for a Remote Workforce
This year saw the rise of the remote workforce due to the pandemic and resulting stay-at-home orders. While some companies are returning to office work, a majority plan to have more work-from-home employees either part-time or full-time than they did prior to the pandemic.
Look at what’s lacking to fully support your remote team. Would they benefit from having company laptops issued rather than using their own devices, which may not be as powerful or secure? What about VoIP enabled desk sets? Or a VPN subscription for remote connection security?
These are all considerations for investing the future and ensuring your business can continue operating from anywhere no matter what.
Get Help Planning Your Replacement/Upgrade Strategy
You don’t want to make technology purchases just for the sake of a purchase before year end. Work with BrainStomp to identify strategic purchases that can pay for themselves in productivity and security improvements.
Contact us today to plan your year-end technology purchases 260-918-3548 or reach out online.
