Have you heard of Section 179?
Section 179 is part of the IRS tax code that’s designed to help small businesses, just like yours. The idea is simple: if your company buys new qualifying equipment and/or software, you can deduct the full purchase price from your net income in the current tax year, rather than depreciate it over several years. For example, if you purchase new computers that cost $50,000 before the end of 2021, Section 179 allows you to deduct the full cost of those computers in 2021 instead of depreciating them over time at say $10,000 annually for five years.
Section 179 was designed to encourage you to invest in your business and it works. You can write off up to $1,050,000 in 2021!
But, there are two issues that you need to be aware of:
- To qualify, the purchase must be made and the items must be put into service by December 31, 2021. If the equipment is not delivered and in use by the end of year, you won’t qualify for this deduction. This leads to the next issue…
- There are major problems with the technology supply chain right now. These problems are causing significant delays in the delivery of hardware. If you don’t get your orders in soon, you may lose out on this valuable “hidden tax relief”.
You have to hurry!
Time is running out to take advantage of Section 179 for 2021
There’s a comprehensive guide with illustrations and information about Section 179 available here. However, please remember that Netconex does not offer accounting or tax services and recommends you talk to your accountant before making decisions related to Section 179.
Unlike some other IT companies, we’re familiar with Section 179 and understand how important it is to act now. We’ve been getting ready for this for months. So, if you have any questions about how you might be able to take advantage of Section 179, schedule a complimentary 30-minute Get Started meeting.