Thinking about purchasing new equipment for your IT infrastructure? Don’t just think about it, do it and do it fast or you may miss out on a great IRS tax benefit for 2021.
The Internal Revenue Service’s Section 179 tax benefit applies to new equipment purchased before the end of the year AND put into service this year (2021).
With supply shortages and delivery time lags caused by COVID-19, it could take up to eight weeks for equipment purchased today to arrive. That means waiting much longer could cause you to lose out on the benefit for 2021. Section 179 has been available for many years and it probably will be there for 2022 but there is always a risk that the tax benefit will change or be ended.
Here are the requirements of this year’s Section 179:
- December 31, 2021 is the absolute deadline for buying new equipment AND putting it into service. If you buy, but don’t use the new equipment until 2022, you’re out of luck.
- This year’s limit is $1,050,000, $10,000 more than it was in 2020.
- Whatever you purchase MUST be:
- For income-producing activity
- Usable for more than one year
- Available to the general public
- Subject to a non-exclusive license
- EXCLUSIONS include custom code, databases and websites
Here are a few examples of IT infrastructure purchases that would qualify for a Section 129 deduction:
- Hosted or VOIP phone systems as well as other office equipment
- Computers, servers and other hardware
- “Off the shelf” software (which has not been substantially modified)
For complete information on this tax code, visit the Section 179 website.
Don’t know what your business needs are, especially your IT infrastructure? If you’re already an Aeko client, contact your account manager.
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