As the year comes to a close, you might be turning your attention your budget – namely, how you can invest more money into your business and pay less money to Uncle Sam in the process.
There are a few ways you can do this.
One of the easiest is to leverage section 179, which allows for tax deductions on the purchase of new or used equipment and off-the-shelf software, with a deduction cap of $500,000 for 2017 (on purchases of $2,000,000 or less). There are several technology projects that would fit into the scope of this deduction, each offering you opportunities to create a simpler, cleaner computing environment for 2018.
Of course, even if there are projects that don’t fit this scope, any expenditure decreases your profits and therefore, your tax liability. And there is still plenty of time to make investments for 2017 as some deductions can be made for 2017 projects that are paid up to 60 days after the year end, depending on advice from your tax accountant. Still, many businesses hesitate to make investments at the end of the year because they’re concerned about disrupting end of year accounting, or because they’ll have minimal staff and are concerned about things going awry.
The holidays are actually the ideal time for technology upgrades and investments, because there is less demand on the IT environment from employees and, typically, from client activity. Plus, at the end of the year you have a predictable profit for the year. So, what better time to invest in the coming year?
This is the time to invest in something exciting that will bring great benefits to your business for the next year. Here are some options:
- Shift to an operational expense model: Take capital investments out of the picture and move your organization to an operational expense model. One way to do that is by moving from premise-based to cloud-based. This is a perfect holiday project that Applied Tech can help you with, and it can be done within 30 days.
- Capital investments: What major expenses have you been putting off? Are there any equipment purchases that fall under the section 179 rule? What about upgrading operating systems?
- Intelligence projects: Is there software that could give you more business intelligence that provides your business with a competitive advantage? End of year is perfect for this, because it allows you to start fresh and compare years cleanly.
- Cloud migrations: Moving your email systems, CRM or document management solutions to the cloud allows you to reduce on-premises IT management, simplifying your operations.
End of year is the time to clean house, simplify your operations and make your IT environment easier to manage. With tax deductions and credits, and the downtime that comes at the end of the year, it’s the perfect opportunity to invest in your business and get 2018 off to a great start.
What projects would help you maximize your deductions? Contact us at (608)729-1300 or sign up below to have a conversation.
