Need Some 2021 Tax Deductions? Consider These Technology Upgrades

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With the end of the year only a couple of months away, the window is closing for making any business moves to reduce your tax bill come next April. One area where you can gain multiple deductions is technology upgrades. 

Whether you’re a small business owner or freelancer working online, you can use the deductions laid out in Section 179 of the IRS tax guidelines to find deductions for many office equipment and technology purchases. 

The guideline also includes a temporary bonus depreciation deduction that allows you to deduct 100% of the depreciation for new equipment all at once, rather than waiting for several years. This could effectively double the tax benefit of purchasing new technology before the end of the year.

Types of purchases that qualify under this deduction include:

  • Hardware (computers, servers, routers, etc.)

  • Software (“Off-the-shelf”)

  • Security and alarm systems 

  • Office equipment (printers, copiers, etc.)

  • Communications equipment (VoIP desk phones, headsets, etc.)

If you time your technology purchases before December 31, 2021, then they’ll qualify for those tax credits, and you can get a partial payback in just a few short months come tax time.

What types of upgrades are popular right now? Here are several to consider that will improve your business operations, enhance security, and help you boost productivity.

New Mesh Network Wi-Fi

Optimizing your internet connection is one upgrade that positively impacts multiple processes. It enables your employees with faster connections for doing their work, improves video conferencing reliability, and more.

Mesh networks use multiple router units, called “nodes,” that improve signal strength, speed, and reliability. It can also help you reduce problems with Wi-Fi weak spots or dead zones in your building.

Security Cameras & Alarms

Cloud security systems have made physical security more affordable for small businesses. IP security cameras are portable, easily installed, and can be controlled from a smartphone app.

This is an upgrade that you can not only deduct on your taxes but one that can also decrease property insurance premiums.

Digital Door Access System

Another physical security upgrade that’s popular is moving away from key-controlled doors to a digital access system. This is more efficient and removes the need to have doors re-keyed due to employees that leave unexpectedly or a lost key. 

This type of system also gives you the ability to track who is accessing which office at what times, which can be vital should you have a robbery or an incident of missing equipment.

New Windows 11 PCs

With the release of Windows 11, it’s a perfect time to review your business computers to see which ones may be due for replacement.

If you’re operating a PC older than 4 years, it could be costing you an average of $2,736 annually in maintenance and lost productivity costs.

Identify any PCs that are getting old and those that don’t meet the minimum requirements to upgrade to Windows 11. Place your purchases for new replacement PCs with the updated operating system already installed before the end of the year.

AV Equipment Upgrades for Video Conferencing

Video conferencing has taken on an entirely new level of importance due to the pandemic. It has become the default method of meeting with clients and internal teams working remotely.

If you have a low-quality AV system at your office, it can put a hamper on your video calls and be distracting.

Upgrading your AV equipment can improve meetings, make them more time-efficient, and put your company in a positive light when meeting with clients (e.g., if you have your “act together” when it comes to video calls, it improves your reputation.) 

Remote Team Software & Office Equipment

It’s expected that the number of permanent remote workers will double this year. Many companies are adopting hybrid working environments where employees are working either part or full time from home. 

Remote employees need to be enabled with the right equipment, just as employees working in an office. This means providing things such as:

  • PCs or laptops

  • Headsets

  • Filing cabinets

  • Printers

  • VoIP desk phones,

  • Etc.

Office equipment is one of the items you can deduct on your business taxes, which will both help you enable your remote team to do their best and give you a financial benefit come next year.

It’s a good idea to take a survey of employees to find out what they most need to work productively from home before you make purchases. This ensures you’re not supplying unnecessary equipment and that you are providing the things that your team needs the most to optimize their work.

Get Help Planning Your Year-end Technology Upgrades

BrainStomp can help your business make wise technology upgrade decisions that provide the best impact for your investment dollars.

Schedule a free consultation today! Call 260-918-3548 or reach out online.