Technology can make life easier, yet when your tech begins to fail, it can hold you back. In fact, it creates new troubles and often costs you more money in downtime and lack of productivity than it would cost to purchase new equipment. Here’s the good news: the U.S. government understands this desire to save money by upgrading your equipment less often, and they’re combating it with Section 179.
What’s the Section 179 tax deduction?
Instead of waiting for your equipment to stop working, Section 179 provides an opportunity to deduct qualifying equipment or software purchased or leased during the year. In addition to purchases like commercial use vehicles and improvements to nonresidential property, this includes:
- Business equipment that you purchase, finance or lease
- Software with a non-exclusive license that has not been substantially modified
- Office equipment like servers and printers, routers, network switches, and network security appliances
The maximum Section 179 deduction for 2023 is $1,160,000. This means that qualifying U.S. companies may be able to deduct the purchase price of qualified equipment purchases, up to the limit of $1,160,000. In addition, the “total equipment purchase” limit is $2,890,000. The deduction may include both new and used qualified equipment.
In addition, businesses may be able to take advantage of 80% bonus depreciation on both new and used equipment for 2023. Remember to keep supply chain issues and delivery times in mind when making your Section 179 purchases for 2023, as equipment must be purchased and put into service by midnight 12/31/23.
This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, tax, legal or accounting advice. You should consult your own tax, legal and accounting advisors before engaging in any transaction.
Not sure if you need an upgrade?
It depends on your usage, but Sourcepass recommends replacing computers as often as every three years as manufacturers release new architectures with improved performance. For other hardware, such as printers and switches, Sourcepass recommends replacement every three to five years. If you notice a significant decline in performance or if downtime is hindering your workflow, it may be time for new equipment.
After speaking to your CPA/Accountant about the Section 179 tax deduction, reach out to your Strategic Advisor at Sourcepass at (877) 678-8080 so that we can help recommend the best technology for your business needs.