For many businesses, tax season can be the most stressful time of the year. Fortunately, there are technology tax deductions out there, including Section 179. Not only can this deduction help businesses save on expenses — it can also help them grow.
The Section 179 tax deduction allows all businesses to deduct the full purchase price of qualifying equipment or software bought, financed or leased during the tax year from their gross income. This deduction helps ease tax burdens (especially for small businesses) and encourages companies to remain competitive in their market by buying the new technology they need.
Let’s explore how you can take advantage of Section 179 for the remainder of the year.
1. What Products Qualify?
Luckily, most tangible goods used by American businesses qualify for technology tax deductions. These include:
- Purchased, financed or leased equipment
- Workstations, laptops, tablets or smartphones
- Servers, printers, routers and network security appliances
- Off-the-shelf software
There’s no need to put off buying new equipment for your office until the end of the year. Instead, you can make the necessary investment at any point and still reap the benefits provided by the U.S. government.
2. Are There Any Limitations?
Section 179 does come with a few limitations. The first is that qualifying equipment and software must have been purchased, financed or leased between January 1st, 2022, to December 31st, 2022.
Secondly, the items must be used for business purposes more than 50% of the time. To determine the monetary amount eligible for technology tax deductions, simply multiply the cost of the qualifying product by the percentage of business use.
Lastly, the amount you can deduct for 2022 stands at $1,080,000. This also limits the total amount of equipment purchased to $2,700,000 in order to qualify. After this limit, the amount phases out dollar for dollar, or the deductible amount begins to decrease.
3. How Can You Get Started?
Once you know which products you can deduct within your limit, you can start the deduction process. When you do your taxes, you will use Part 1 of Form 4562 to claim your deduction. On this form, you’ll list the qualifying products and their costs up to the deduction limit.
Take the Next Step
With technology tax deductions like Section 179, your business can feel more confident that the new technology you invest in maximizes your costs. And, by using the most cutting-edge technology, you can transform your business operations to be more efficient, productive and in line with the modern work experience.
If you’re interested in learning more about what technology your business could benefit from and help you qualify for year-end savings, consult our IT experts. We can help ensure you don’t miss out on savings and leverage the best equipment out there.
If you want to learn more about IT tools and strategies, check out additional blogs in our resources section.
The information provided in this blog is for educational purposes only. Consult your tax professional for information on how Section 179 may relate to your business.
Cyber Awareness Month 2022
October marks the start of Cybersecurity Awareness Month 2022, which is designed to help businesses protect themselves from online threats and bring overall awareness to cybersecurity. This month is dedicated to creating tools and resources that businesses can utilize to provide tips and training to better inform their customers and employees. What started in 2004, and continues now to build momentum, Cybersecurity Awareness Month portrays an over-arching theme of focusing ultimately on the “people” part of cybersecurity.
Focusing on the human nature side of cybersecurity ensures that all individuals and organizations make the right decisions when it comes to being safe online. There are many ways that you can keep your data protected. Check out these four best practices that you can leverage to improve your cyber awareness.
Enable Multi-Factor Authentication (MFA)
Also known as two-factor authentication, MFA is a security measure that has become more common amongst businesses. When initiated, MFA will prompt a user to utilize two security features that can prove their identity. This feature can make it twice as hard for cybercriminals to access sensitive data.
MFA can include:
• A biometric identifier like a fingerprint or facial recognition.
• An extra pin that is prompted for entry after a password.
• A security question set up by the user.
• A code that is either texted or emailed to the user.
• When in doubt, if available, use MFA everywhere to secure your network.
Strengthen Your Passwords
Passwords are the digital keys to your cyber-house and are critical to protecting your online security. The truth is passwords are your first line of defense against cyberattacks.
• When creating passwords, it’s key to keep these three tips in mind:
• Make them long: Each password should be about 12 characters long.
• Make them unique: Never reuse passwords, nor should they look alike.
• Make them complex: You should use a combination of uppercase letters, lowercase letters, numbers and special characters.
• If your password is long, unique and complex you won’t need to change it, unless you are notified that an unauthorized person has accessed it, or your password was compromised in a data breach.
Don’t Click Suspicious Links
Hackers use scams like phishing attacks to send bad links via emails to try and extract sensitive data from unsuspecting individuals. A phishing scam can even install malware on computer systems. When in doubt, if it looks “phishy,” don’t click on it.
Update Your Software
Always keep your software up to date when updates are available. These updates can generally provide general fixes and new patches to protect your business against cybercriminals. If you have the chance to automate your updates, don’t hesitate to do so. By updating your software, you can ensure that you are one step ahead of hackers.
How We Can Help
Everyone can make a difference during Cybersecurity Awareness Month 2022 by getting involved and learning best practices. If you’re unsure where your cybersecurity stands or could use additional training to help better prepare your staff, contact us. Here at Nitor, we can get your cybersecurity strategy in place with an effective risk evaluation.
If you want to learn more about cybersecurity awareness and training, check out additional blogs in our resources section.