Take Advantage of this Tax write-off for IT Equipment

The Section 179 of the Internal Revenue Code is a tax provision that allows businesses to deduct the full cost of qualifying purchases from their taxable income in the year the items are put into service. Section 179 can be used as a tax deduction for certain types of IT equipment, like computers, hardware & software, as well as networking equipment may qualify for this deduction.

The tax break allows you to deduct the cost of these items as a business expense, which can offset the amount of taxable income that your business earns. To qualify for the Section 179 tax write-off, you must buy the equipment new and use it for your business at least 50% of the time. That means you can deduct the cost of it in the year that you buy it. If you then use it in your business for 50% or more of the time in that year, you can also deduct the cost of buying it in an earlier year.

In 2023 (taxes filed in 2024), the maximum Section 179 deduction is $1,160,000. This deduction is available when you purchase certain IT-related items for business use, which is a big benefit for small businesses! However, in order to take the full deduction, you must purchase your IT equipment before 2024.

Types of IT equipment that may qualify for the Section 179 tax write off include:
1. Computer hardware (desktop computers, laptops, and servers)
2. Computer software (including operating systems, application software, and web development tools)
3. Telecommunications equipment (including routers, switches, and data cables)
4. Other business equipment (including printers, scanners, and photocopiers)
5. Network and security equipment
6. Office furniture and accessories
7. IT training for end users

Don't let your tax savings go to waste!

Starting in 2023, other immediate deductibility provisions are being phased out, making Section 179 increasingly important for tax deductions related to business purchases. This deduction applies to business equipment like computers, machinery, and some vehicles. It doesn't generally cover real estate. However, it is important to note that the IRS has strict guidelines on what types of equipment are eligible for the Section 179 tax write off. You must make sure that the IT equipment you are investing in is used for business purposes. If you are unsure whether your equipment is eligible, it is best to consult with a tax professional.