(5-Minute Read)
As 2023 draws to a close, it’s time to start thinking about the new year ahead.
New plans, new goals, and… Taxes?
For many companies, the more profit you make, the higher your tax bill will be. But there’s a way to reduce your taxes while improving your business at the same time. Which makes December the right month to act – you’ll want to make those improvements by the end of the year.
Let’s explore the Section 179 deduction, and how it can help your business.
What is a Section 179 Deduction?
As a small business owner, the amount of taxable income you bring in can weigh heavily on your financial bottom line. Fortunately, there’s a tax code provision that can help reduce your taxes. It’s called the Section 179 deduction.
Essentially, this deduction allows small businesses to write off the full cost of qualifying items placed in service during the tax year. This can include equipment, vehicles, and even software.
By taking advantage of the Section 179 deduction, you could potentially lower your taxable income while getting new equipment to upgrade your company.
What Items Qualify for Deduction?
One advantage of the Section 179 tax deduction: It covers a wide range of items. Many things can qualify under the right circumstances. (Of course, it’s important to note that these items must be used for your business during their first year of service.)
Here are some examples of eligible items:
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- Office equipment
- Furniture
- Computers and software
- Vehicles (note: there are some restrictions)
- Building enhancements like upgraded roofs, advanced security systems, and efficient HVAC
An Incentive for Growth
For local business owners, there’s always a balancing act between investing in the growth of your company and maintaining profitability. And this is exactly why the Section 179 deduction exists – it provides a helpful incentive for using some of your profits to grow your business.
But what are some helpful things you can invest in to grow your business?
New Computers
“If it ain’t broke, don’t fix it!”
That’s a pretty common saying, but it doesn’t really hold true when it comes to technology. Old computers might not necessarily be broken, but they’re not really doing the best job either.
Old PCs take longer to turn on and off. They have a tough time when it comes to multitasking. They consume more power. And they have slower processors, which means more time wasted as they try to catch up. When it comes to modern, resource-hungry software, old PCs simply can’t compete with the speed and performance of newer models.
If you choose to use the tax deduction to update your computers, you’ll be helping your team members work more efficiently than ever. Newer, faster PCs can increase your team’s output, giving them the horsepower to tackle more complex tasks and handle heavy workloads with ease.
Other benefits of updating your computers include:
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- Faster processors
- Stable, more reliable operating systems
- Improved security
- Increased memory and storage space
Cybersecurity
Nowadays, even local businesses are relying more and more on technology to manage their operations. Whether it’s processing transactions, storing sensitive data, or communicating with customers, there’s no avoiding the fact that technology is key to success.
However, with increased use also comes increased vulnerability. Cyber threats are becoming more advanced every day, and it’s no longer enough to simply cross your fingers and hope for the best.
Every business, regardless of its size, should invest in cyber security measures to protect its assets and reputation. Anti-virus software is a one option. Not only can it help prevent data breaches and cyber-attacks, but it can also increase overall productivity by keeping your system running smoothly and efficiently.
You also need to regularly update your operating systems, web browsers, and other applications. These updates patch up any holes in your security that hackers might exploit. So, make sure to pay close attention to software updates, and keep them current.
A Phone System
Another option for upgrading your business: Installing a new phone system. By doing so, you can improve communications both internally and externally, making it easier for employees to collaborate, and for customers to reach you. Not to mention that new phone systems come with new features and technologies that could also save you money in the long run,
With advanced features like an Auto Attendant, which acts as your virtual receptionist, there’s no need to worry about missing calls or losing potential business. This feature can greet callers with a pre-recorded message (highlighting office hours or important updates) and help them navigate to the department they need, ensuring that they’re directed to the right person quickly and easily.
A phone system also makes it easy to add a Message on Hold. When customers call your business and are placed on hold, they’ll hear a recorded greeting that can be used to inform them about your business, promote your products or services, provide helpful information, or just thank them for their call. This can help to improve customer service and ease the wait time for customers, making them feel valued and appreciated.
Modern Solutions for Modern Businesses
By taking advantage of a helpful tax benefit like Section 179, you can invest in the kind of growth that helps your business reach the next level of success. We urge you to reach out to your accountant to get further details on this end-of-year tax strategy before making any decisions.
When done right, spending money on company upgrades can provide long term value – if you’re looking for a reliable partner to help you elevate your local business, contact Smart Link Solutions. We will come out for a no-cost evaluation for your company.
Since we began in 1994, we’ve dedicated ourselves to a customer-first approach. This has allowed us to evolve and expand our services, offering a comprehensive suite of solutions to meet the evolving needs of today’s businesses.
Even as the business world shifts and changes around us, our team at Smart Link Solutions uses innovative thinking and cutting-edge methods to help you stay ahead of the curve.
What to know more? Contact us today!