Tax Cuts you SHOULD be taking advantage of, but aren’t
Save more than a few bucks with this simple method.
Tax season is quickly approaching, and we all know how stressful it can be. Keeping up with new and evolving tax laws is challenging, and can affect your business in big ways.
In fact, the Tax Cuts and Jobs Act passed in December of 2017 (effective January 2018) fits that description nicely. It enabled large companies to receive a significant tax cut by 25 to 35 percent, and gave small businesses the potential to claim a 20 percent deduction as well. This was made possible due to the improvements made to Section 179 of the IRS code — let’s break it down.
Section 179: Where the Money Comes From
This section of the IRS code allows businesses to take a depreciation deduction on essential equipment and assets in one year, as opposed to depreciating them over time (up to 5 years for hardware). It’s a lot simpler to deduct the full cost of a piece of equipment at once, wouldn’t you say? By writing off entire purchases in the first year, it will reduce your net income, which will reduce your income taxes. Qualifying equipment includes new and used computers, network equipment, and off-the-shelf software.
Starting in 2018, Section 179 deduction doubled from $500,000 to $1 million. Normally, companies would have a limited amount to spend on equipment if they were to qualify for the $1 million or $2.5 million deduction, but the new law allows bonus depreciation to come in handy. Bonus depreciation has been increased to 100% for equipment from as far back as September 27, 2017, and on future assets all the way to December of 2022. Bonus depreciation has no spending limit — companies can still write off a huge portion of the cost of their equipment.
Growing and established businesses alike can benefit from this law, and can use the savings to continue to expand and improve. To get started, first make sure that the equipment that your company purchases is the kind that qualifies for a Section 179 deduction. Next, make sure that your records are current and complete, including the date of purchase, the cost of the purchase, and when the equipment was put into use. Finally, calculate the total cost of all the equipment (not exceeding 2.5 million) and take the 179 deduction. Make sure that all of the IRS information is reviewed thoroughly to avoid having errors on your report.
How Domain Helps
Domain Computer Services can not only assist with IT solutions but we can also provide your business with equipment to keep it up and running. We supply and install phone systems, office printers, and even offer deals on top-quality computers — and with our network monitoring and other managed services, we’ll even have a list of all devices on your network ready-made for you. With Domain, you have everything you need to take full advantage of the Section 179 tax cuts!
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