2020 Tax Incentives for Business Technology Purchases
You can take advantage of the 2020 tax incentives and make your technology purchases more affordable. Do you know these incentives? Discover them now and learn how you can apply them to your technology purchases.
Organizations today need to invest in the latest technologies that offer solutions and drive growth. The right undertakings can help you meet your objectives, provide a competitive edge, and improve your operational efficiency.
Investing in business technology can be expensive. Do you have resources for all your technology purchases?
The 2020 tax incentives for business infrastructure purchases can offer some savings on technology investments. They can reduce the costs of your acquisitions, freeing your resources for crucial areas.
Clients often ask HRCT what the tax incentives for business technology purchases are and how they can exploit these opportunities to lower their overall spending. HRCT provides reliable IT services and support. This article will help you discover the 2020 tax incentives for business technology purchases.
What Are the Top 2020 Tax Incentives for Business Technology Purchases?
These incentives apply for hardware or software purchases that organizations make. Maximize the following tax incentives to make your purchases affordable (These incentives does not cover tax periods beyond 2022):
- The Monetary Limits: Organizations that buy eligible infrastructure worth up to $2,590,000 can deduct up to $1,040,000 from the taxable sum starting from the 2020 tax period.
- Sec. 179 Deduction Threshold: The incentive reduces for purchases worth over $2,590,000.
- Bonus Depreciation: This incentive kicks in once you surpass Sec. 179 limit. Buyers can deduct a substantial amount of the investment’s cost in the first year instead of spreading the depreciation cost over many years. Depreciate 100% of the asset if you purchased it for over $2,590,000.
To illustrate exactly how these incentives work, let’s take a look at the example calculation below:
Equipment Purchases: $100,000
First Year Write Off: $100,000
($1,040,000 = maximum in 2020)
Normal First Year Depreciation: $0
(20% in each of 5 years on remaining amount)
Total First Year Deduction: $100,000
($100,000 + 0)
Cash Saving $35,000
($100,000 × 35% tax rate)
Equipment Cost After Tax: $65,000
(Assuming a 35% tax bracket)
Where Do the 2020 Business Technology Tax Incentives Apply?
According to Section 179, you can deduct the cost of any tangible personal property (new or used) that you purchase for your business, provided the IRS has determined the property will last longer than a year.
Examples of tangible personal property include:
- Door access control systems.
- Computer software.
- Computers, firewalls, servers.
- Phone systems.
- Video surveillance systems.
How Can You Leverage These Incentives to Buy Technology Infrastructure?
You may take advantage of Sec. 179 of the IRS tax code to reduce your IT investment costs. Technology purchases worth up to $1,040,000 may not meet the taxable threshold, as the deduction exists. Bonus depreciation is also available for purchases over $2,590,000 that qualify. You will need to buy the equipment and have it in service by the end of a calendar year to enjoy these incentives.
How Can HRCT Help You Enjoy These Incentives?
We can help you ensure your purchases qualify for these incentives. Our professionals will analyze your purchase and advise you on the best way to enjoy these incentives. We have experience with the IRS tax code to help you save on your hardware and software purchases.
HRCT provides business IT solutions, including cybersecurity, managed IT, cloud technologies, and telephone systems. We offer expert, customized, and affordable services that will help you achieve your objectives.
Contact us today and let us help you enjoy tax incentives for your IT purchases. – Change to technology
Are you ready to speak with us? Contact us via phone at (757) 399-3350 or our toll-free number (800) 319-1878. You can also email us at sales@hrct.net, and we will help you enjoy tax incentives for your technology purchases.