Even with all the talk of trade-wars and possible slowdowns to the economy, many of our manufacturing and distribution clients are having very good years and are looking for ways to invest in their companies.
As we near the end of the calendar year, it’s a good time to evaluate your use of technology. The right technology investments can increase productivity in selling and delivering products to the market and help you prepare for any downturns that may lie ahead.
Have you recently reviewed your strategic plan? Are there any projects that would be good to fund this year to improve your business and reduce your tax burden?
Over the past few years, the trend has been for companies to move more of their technology spend to the cloud and to take advantage of subscription software and services. This has reduced the need for some on-premises hardware (but by no means has eliminated it).
Along with that trend, there has been considerably more emphasis on being “mobile,” and companies are investing in wireless and wired networks to improve the user experience by offering better performance and resiliency.
Whether you are doing something as tactical as replacing your Windows 7 PCs before they are unsupported or deploying a new business system, now may be a good time to make that investment.
So, what is the incentive to make this type of purchase before year-end?
Depending on the business’s tax structure, there could be accelerated federal tax savings of up to $.37 for every $1 in capital expenditures. For example, a flow-through entity making a $100,000 investment in technology could save up to $37,000 of federal income taxes on their 2019 tax return.
There is a sense of urgency for calendar year-end taxpayers to make these purchases, as they must be placed in service by December 31 in order to qualify for either the federal Section 179 or bonus depreciation deduction.
Don’t wait! Talk to a Wipfli adviser today to learn how you can maximize your tax deductions through the implementation of technology projects or procuring computers and other basic technology equipment.