There’s a great tax benefit out there for anyone looking to upgrade their businesses IT infrastructure, but if you wait too long to make your purchases, you could miss out. Section 179 tax benefits only apply to equipment both purchased AND put into service this year. With supply issues we’re seeing and delivery time taking up to eight weeks, purchases need to be made now to qualify for this valuable tax benefit.
While Section 179 has been available for many years, there is always a risk that the tax benefit will change or be ended. So, waiting until 2022 for that year’s tax benefit carries some risk.
Here’s the nitty gritty of Section 179:
- The purchases must be made before December 31, 2021 AND put into service by that time.
- The limit is $1,050,000; $10,000 more than it was in 2020.
- Included in this benefit are:
- Office equipment, including hosted or VOIP phone systems.
- Computers, servers and other hardware.
- “Off the shelf” software (not substantially modified).
The caveats are that the purchases must be:
- For income-producing activity.
- Usable for more than one year.
- Available to the general public.
- Subject to a non-exclusive license.
Note that custom code, databases and websites do not qualify for Section 179 benefits.
For complete information on this tax code, visit the Section 179 website.