Tips for Making Smart Year-End Technology Purchases
It’s not long before this crazy year comes to a close. For businesses, this means it is down to the wire on any investments in equipment or technology infrastructure they want to make that can be used for 2020 tax deductions.
When investing in technology solutions at the end of the year, companies may be able to capture a portion of that expense back when submitting their tax returns. This is done though tax write-offs for things like cost deduction and deduction of depreciation.
In 2020, businesses can deduct as much as $1,040,000 on new or used equipment purchases or software, according to Section 179 of the US Tax Code.
There is also a bonus 100% depreciation deduction for new or used equipment. This allows companies to take all the depreciation credit now instead of having to take smaller percentages over several years.
When it comes to how your Massachusetts business should take your tax deductions, it’s best to speak with your accountant. When it comes to the best technology purchases to make for those deductions, you’ll want the help of an IT pro, like Cleartech Group.
Strategic Planning for Technology Upgrades
There are quite a few different technology-related expenses that qualify under Section 179, which means you can pretty much upgrade any part of your IT infrastructure to make your business more secure and more productive.
Potential technology tax write-offs include:
Software (as long as it’s “off the shelf,” i.e. publicly available)
Office equipment (copiers, printers, sensors, etc.)
When planning tech investments for year-end purchases, you want to consider both your current needs and what you need to stay competitive for the future.
Here are several tips for your upgrade strategy.
Survey Employees About Software
Cloud spend was up in 2019 over the previous year by 50%, but cloud waste was also up, by nearly double.
It seems companies understand the importance of cloud software but aren’t always making the best choices.
Before deciding on a software upgrade, survey your employees. They’re the ones on the front line and can give you a better picture of what is needed and what’s not serving you well.
Ask questions such as:
What are the three most and least helpful cloud apps you use at work?
What cloud application do you wish we had?
What are your biggest workflow challenges to productivity?
Ask What Remote Teams Need
One legacy of the pandemic is going to be companies using more remote employees on a permanent basis. Reasons for this include better productivity, lower costs, and to protect business continuity.
When thinking of IT upgrades to make before the end of the year, look at what remote teams need to be more productive. And look at this as a permanent infrastructure, which will give you a different mindset than you may have had when the lock-down orders first began early in 2020.
Some potential technology investments to consider are:
Team collaboration platforms (like Microsoft Teams)
Business laptops that may help the productivity of employees using personal PCs
Remote team security (cloud security, VPN, etc.)
VoIP enabled desk phones or high-quality headsets
Look at Cybersecurity Needs
Cybersecurity is an ongoing battle. Hackers continue to make their attacks more sophisticated, and IT security companies continually upgrade their protective solutions.
Before you decide on year-end purchases, have a cybersecurity audit done to identify any vulnerabilities in your safeguards that might leave you at risk of a breach.
Cybersecurity purchases to consider include things like:
Device security software
Endpoint management software
Enhanced antivirus with threat protection
Data security software (sensitivity labels, etc.)
Consider Network Optimization
All office productivity, no matter which device is involved, is tied to how fast and reliable your network is.
If you have a problematic wireless network that lags at times or doesn’t deliver the same signal strength to all areas of your building, it can be holding everyone back from being as efficient as they could be.
Look at network improvements you can make that will enhance your overall internet speed, reach, and reliability. Some potential upgrades are:
Switching from a single router to a mesh network
Upgrading to a Wi-Fi 6 router
Updating infrastructure to use ethernet connections where possible
Replace Outdated Computers
If you have any computers in operation at your business that are older than 4-years old, they may be costing you more in maintenance and downtime costs than the price of a replacement.
Take an inventory of your hardware and replace any equipment that’s no longer performing well and continually has issues. This will improve productivity and reduce your risk of that device causing a data breach.
Get Help Planning Your Year-End Technology Purchases
Cleartech Group can help your business make the best strategic decisions for year-end IT purchases for security and productivity.
Contact us today to schedule a consultation! Call us to chat at 978-466-1938 or reach out online.