The purpose of Section 179 of the IRS tax code is to stimulate the US economy and your business in a positive direction. Businesses no longer see technology as a cost. Instead, IT has become the key to your business success. Huge growth in IT budgets in 2022 is due to changes in business operations (how do we Do business), supporting an increasingly remote workforce, and increasing business revenue.
As security concerns increase, the need to upgrade outdated IT infrastructure is critical. IT projects are getting higher priority as we move into 2023. These factors should determine your year-end purchases 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 have to consider, if you haven’t already, is the obsolescence of technology. In previous reports, I have stated that older Microsoft operating systems, Windows Server 2012 and Windows 8, need to be updated. Extended support for these products is ending soon. You now need to update these systems to avoid security and compliance issues. This is also a good time to replace off-the-shelf software, including older versions of Outlook on the server.
Replacing older and more problematic desktops and laptops before the end of the year is a good move. Any Windows 10 computers not designated for upgrade to Windows 11 should also be replaced. Deduct new expenses and 100% depreciation expense. If it’s “new”, you can deduct brand new hardware as well as refurbished hardware.
Many companies are retaining their remote office workers, even after the pandemic. The reasons vary, from saving cost and space to improving employee morale and productivity. Likewise, it’s time to consider any software that helps improve employee remote communication. Consider using Microsoft 365 Teams or SharePoint and remote hosting software to secure and support external devices.
Best-in-class video conferencing dictates the need to upgrade your video conferencing system as well as upgrade your webcam, microphone and screen. (See IT Insight re The Owl October 21, 2022). This investment is also tax-free.
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Cybersecurity updates and vulnerability protection (phishing, ransomware, etc.) and a full IT assessment are currently underway. You can address these drawbacks now by purchasing hardware and software. What is your business continuity plan? Redundant systems such as backup and data recovery, firewall and threat detection, offsite cloud replication are all part of your IT spending, along with the technical time and services required to implement them.
The IT experts at your managed service provider, such as PCGiT, can provide you with a smart strategy for year-end IT purchases and upgrades to improve security, efficiency, and productivity. Keep your business ahead in 2023. Your tax relief awaits you!
JoAnn Hodgdon is the Vice President and Co-Founder of Portsmouth Computer Group (PCGiT) and her husband is David. For 25 years, PCGiT has been providing its clients with comprehensive managed IT services, business continuity, security, cloud computing and strategic vCIO services. You can contact her at firstname.lastname@example.org or at www.pcgit.com.