With 2021 going out surprisingly strong, owners of expanding businesses welcome the news of generous year-end tax deductions. With Section 179 2021 offering significant tax relief, small businesses can end the year with an investment in modernized technology to continue the growth in 2022. But, due to potential supply chain shortages, you should order now to complete the transaction before year end.
Section 179 2021 Increased Deduction Limits
The Tax Cuts and Jobs Act, which took effect in 2018, introduced some eye-popping adjustments to Section 179. Combined with bonus depreciation, they put more money into your business investment budget. These changes include the following:
- Deduction limit doubled – For new and used equipment purchased and put into use before the end of the year, the total amount you can deduct was increased to $1 million. This also applies to off-the-shelf software. The deduction limit adjusts annually for inflation, making the 2021 limit $1,050,000.
- Spending cap now $2,620,000 – Once the total amount of equipment purchased exceeds $2,620,000 the deduction begins to phase out. That is, if you spend between $1,050,000 and $2,620,000 you take the full $1,050,000 deduction. After $2,620,000, your tax write-off begins to decrease by one dollar for every extra dollar spent.
- Bonus depreciation 100 percent for 2021 – Surprisingly, bonus depreciation is not offered every year. In 2021, bonus depreciation is available at 100%. It works like this. Once you reach the deduction limit, you can elect to take bonus depreciation on remaining items.
That means that you take the full depreciation in the first year, instead of spreading it out over several years. While bonus depreciation only applied to new equipment in the past, it now also applies to used equipment.
For example, a business takes advantage of the opportunity to replace aging computers and install modern video conferencing technology. With qualifying expenses totaling $1.25 million, the business qualifies for the $1,050,000 deduction. It then takes the bonus depreciation for the remaining $200,000. In the current 21% percent small business tax rate for corporations, the investment gains $262,500 in tax write-offs.
Section 179 2021 Items to Add to Your Tax Savings List
With the December 31 deadline fast approaching and the current supply chain shortages, now is the time to start making strategic technology investments. For instance, you might upgrade remote worker productivity and cybersecurity to grow faster and protect business data. Or you can take the opportunity to reconfigure some areas for hybrid workspace.
- The Yealink UVC30 camera and/or the CP700/CP900 speakerphone make working from home easier and more productive.
- The Yealink VC210 video collaboration bar, the VP59 video phone and the UH36 USB headset each provide all the features needed to join an individual or group meeting.
- Four different sets of Microsoft Teams Room (MTR) devices allow users to meet various remote meeting requirements and overcome business travel restrictions.
- And the Yealink VC210 collaboration bar allows doctors to interact with their patients remotely, improving efficiency, saving time/money on non-urgent diagnoses.
Updated Remote Worker Security – Designed to protect business users where they connect—in the small office/home office—the Firebox® T15 is one of the best SMB firewalls for the remote workforce. Firebox T15 is a cost-effective security powerhouse with advanced cybersecurity and easy network management tools.
Desktop Computers – Opt for high power in a small package with the HP Z2 Mini G5. Alternatively, architects and other creative professionals will power their dreams with the all-in-one Microsoft Surface Studio 2.
Business Laptops – Consider the lightweight yet powerful HP EliteBook x360. Or choose the graphics capabilities and performance of the Microsoft Surface Book 3.
Optimize the Tools to Power Growth with Expert Advice
Count on the modern technology expertise at eMazzanti to maximize the tax savings available from Section 179 2021. They’ll guide you through the hardware and software options available and help to forecast your future technology needs.
With twenty years’ experience supporting customers through crises a variety of crises, eMazzanti’s business technology experts anticipate bumps in the road. Having a strong balance sheet, they have stockpiled in-demand hardware to provide excellent service for customers. With an inventory of printing supplies, laptops, desktop computers and more, they can provide same-day delivery to many clients.
For more information and availability, contact one of our Section 179 technology specialists today to begin the process.