Deduct the full value of your new hardware under section 179
You don’t catch a lot of breaks as a small business owner, but here’s a sweet deal you can take advantage of under the new tax law. When you purchase new business computers and other equipment, you can write off the full amount for the hardware under section 179 of the IRS code.
That means that instead of deducting a portion of your hardware’s value every year as it loses value, you can deduct the full purchase price from your gross income on your 2018 tax return.
Section 179 was created to give small businesses a boost and the ability to invest in themselves. But this section can (and does) change without notice, so if you’re looking to maximize your hardware budget, make your purchases and put them into use before Dec. 31.
Here’s what qualifies under section 179
Small businesses can write off up to $1 million in qualifying equipment. This includes:
- Computers
- “Off-the-shelf” computer software that is not custom designed and is available to the general public
- Business equipment and machines
- Businesses vehicles (with restrictions)
- Office furniture
- Some building improvements
It’s important to note that you can actually write off items that you purchase as used, as long as they’re new to your business in the 2018 year. Leased and financed items also qualify, so this is a great time to invest in your small business.
Here’s how to take a section 179 deduction
We recommend making a list of the purchases you want to make and discussing it with your tax professional beforehand so there are no surprises.
Then purchase your equipment and keep the receipts. You’ll need to begin using it before the end of 2018, so don’t leave it in the box! Make a note of the date you started using it, and any additional costs like shipping or installation. Here’s a good guide to proper documentation.
When you’re ready to file your business taxes, give your receipts and documentation to your tax professional so they can add up everything that qualifies under section 179.
Get a great deal on the best hardware for your business
Varay’s valuable partnerships with top hardware companies can save you money on your end-of-the-year purchases.
Contact us today to get the hardware you need.
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