Year-end tech tax deductions can improve business

The purpose of Section 179 of the IRS tax code is to motivate the US economy and your business to move in a positive direction. Businesses no longer see technology as a cost. Instead, IT has become critical to the success of your business. The tremendous growth in the IT budget in 2022 is due to changes in business operations (how we do business), supporting an increasingly remote workforce and increasing business revenue.

The need to upgrade your outdated IT infrastructure is paramount with increased security concerns. IT projects are increasingly high on the agenda heading into 2023. These factors should dictate your year-end shopping as you plan to do more with less and maximize efficiency. This includes real estate such as security cameras and surveillance systems, cell phones and telephone systems.

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One thing you need to consider, if you haven’t already, is the end of life of the technology. In previous reports, I have indicated the need to update older Microsoft operating systems, namely Windows Server 2012 and Windows 8. The end of extended support for these products is fast approaching. You should update these systems now to avoid security and compliance issues. This is also a great time to replace out-of-the-box software, including older versions of Outlook on your server.

Replacing older, more problematic desktops and laptops is a good decision before the end of the year. Any Windows 10 computers that are not specified for upgrading to Windows 11 should also be replaced. Deduct the cost to you of new and 100% of depreciation. You can deduct both new equipment and refurbished equipment if it is “new to you”.

Many companies are keeping their office workers remote, even after the pandemic. The reasons vary from cost and space savings to improving employee morale and productivity. Again, any software that helps improve remote employee communication should be considered now. Consider Microsoft 365 Teams or SharePoint and remotely managed software to provide security and support for offsite devices.

Best in class video meetings dictate the need for upgrades to video conferencing systems and upgrades to your webcam, microphone and displays. (See IT Insight re The Owl October 21, 2022). This investment is also tax deductible.

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Cybersecurity updates and protection against vulnerabilities (phishing, ransomware, etc.) and a complete IT assessment are currently in order. You can address these shortcomings now by purchasing hardware and software. What is your Business Continuity Plan? Data backup and recovery, firewall and threat detection, redundant systems such as offsite cloud replication are all part of your IT expenses along with the technical hours and services needed to implement them.

Your managed service provider’s IT experts, such as PCGiT, can provide you with a smart strategy for year-end IT purchases and upgrades that will result in improved security, efficiency, and productivity. Keep your business ahead of the game in 2023. Your tax deductions await!

JoAnn Hodgdon is vice president and co-founder of Portsmouth Computer Group (PCGiT) with her husband David. For 25 years, PCGiT has provided customers with comprehensive managed IT services, business continuity, security, cloud computing, and mission-critical vCIO services. You can reach her at [email protected] or via www.pcgit.com.

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