8 Technology-Related Questions That Could Reduce Your Tax Bill and Increase Efficiency

8 Technology-Related Questions That Could Reduce Your Tax Bill and Increase Efficiency


By Andy Knutson, CPA

Trying to keep pace with changes in technology can feel like running on a treadmill—you can never stay ahead! But like a good treadmill workout, it’s a worthy effort. Improving your business’s IT infrastructure can lead to improved efficiencies, security, and even employee morale. And it just so happens that year-end is a great time to evaluate your technology needs.

That’s because computer hardware and software is eligible for accelerated tax depreciation, just like a bulldozer or other piece of equipment would be. Under Sec. 179, for instance, the purchase of qualifying equipment could qualify for a deduction of up to $500,000 in the first year of ownership. There’s the 50 percent bonus depreciation break to consider, too.

So before Dec. 31 inches any closer, ask yourself the following technology-related questions:

Do you need to replace any desktops or laptops?

A slow or outdated computer can cause a lot of frustration, not to mention unnecessary costs.

Is it time to add a server or replace an old one?

As you add staff to your team, consider the efficiencies a new server could bring.

What’s the status of your printer or scanner?

If your office is like ours, the printer has required more maintenance than most of the vehicles in the parking lot. Sometimes an upgrade is the only solution. Also, keep in mind that adding a scanner to your office could decrease your printer’s usage and subsequent need for repairs.

Is your battery backup, firewall, etc., meeting your needs?

These highly important items should be thoroughly evaluated. Unfortunately, they are often neglected by growing companies.

Have you outgrown your current accounting software?

Most companies start with QuickBooks, which is great, but as you grow you may require industry-specific software. There are countless options; your CPA can help you weigh the pros and cons of each. Implementing new software at the start of the year is usually preferable, but don’t rush your decision solely for this reason.

Are add-ons available for your current software?

Adding the equipment, inventory, or time-entry module you have been thinking about could help you prepare for next year’s growth.

Security! Is your anti-virus software up to date?

If nothing else, talk to your IT professional to ensure you are protected from cyber crime.

Do you know where your backups are?

Take a close look at your current backup solution, and make sure you have an on- and off-site copy. If you don’t have a backup solution, be thankful you haven’t lost anything yet, and get one implemented right away!

Investing in new technology now instead of putting it off until next year could be the right move for your business. But don’t wait—Dec. 31 will be here before we know it. If you’d like to get started with evaluating your IT needs, give us a call today.

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