How to Do a Productive Year-End Assessment for Tax Deductible IT Buys

If you’re eyeing year-end investments that you can make in your business to be used for tax write-offs on your 2020 taxes, technology is an excellent option.

Upgrades to technology infrastructure, cloud solutions, and network hardware can mean you enter 2021 more productive than ever. Not only do you get a monetary benefit from the increased efficiency, you can also replace outdated equipment that may have been costing you more than you realize.

The average cost to a business for keeping a computer in operation too long (4+ years) is $2,736.

Computers, office equipment, hardware, and software can be deducted per Section 179 of Form 4562. Allowable deductions include things like:

  • Computers (new and used)
  • Security systems
  • Mobile devices
  • Publicly available software
  • Office equipment (printers, etc.)
  • Network hardware infrastructure

Companies can deduct up to $1,040,000 with a total spending cap of $2,590,000. There is also a bonus 100% depreciation that can be taken off 2020 taxes.

But you don’t want to just rush out and buy the first IT that catches your eye, it’s important to have an IT assessment performed to help you identify your most critical needs and advantageous purchases.

Areas to Consider During a Year-End IT Assessment

IT assessments from Cloudavize look at your entire technology infrastructure to give you a view into your strengths, weaknesses, and areas of opportunity. You get an assessment report based upon industry standards that acts as a roadmap to help you make the best IT purchasing decisions.

Here are some of the areas to consider when going through a year-end technology assessment.

Mitigating Risk

Reducing the risk of a malware infection or data breach is an important area of consideration for an IT assessment. The online threat landscape is always evolving, and businesses need to continually update their cybersecurity protections to keep up.

In 2019, 68% of companies were victims of endpoint attacks.

Mobile security, cloud app security, and remote worker security are all important areas to address in addition to traditional computer and network protections. They’re also an area where companies tend to have vulnerabilities.

Some of the safeguards to keep IT security updated and ready for the new year include:

  • Cloud access security brokers
  • Single sign-on technologies with MFA
  • Firewalls with advanced threat protection (ATP)
  • Business VPNs for remote workers
  • Endpoint device managers

Filling Your Most Critical Needs

If technology isn’t performing well, it can cost a business money every month in productivity, data loss, and more. For example, computers that are 4+ years old have 3x the data breach events and 3x the data loss incidents. They also have nearly twice the service calls as computers that are less than 3-years old.

Often, upgrading older computers saves money right away by allowing employees to work at full speed instead of being held back.

Another critical need can be network speed and reliability. If your router is struggling to keep up with all the new devices added to your network in the past few years, your Wi-Fi signal can become slow and inconsistent.

Upgrading to a mesh network that supports Wi-Fi 6 can speed up your entire office and improve multi-device handling.

Improving Operational Efficiencies

Another area to consider for year-end tax-deductible purchases are those that can improve your operations. This includes finding software, like Microsoft Lists, that can automate processes and replace time-consuming manual tasks.

Connecting your data so it flows through all your applications without needing to be reentered, eliminates problems with entry errors and speeds up your workflows.

When systems are integrated, it also enables you to automate more of your processes to make your entire office more efficient.

Another way to improve operational efficiency is to stay a step ahead technologically. For example, look for 5G-compatible devices when ever you purchase new hardware, so your business will be ready to take advantage when the lightening-fast speeds of 5G are fully implemented.

Customer Experience Enhancements

Technology is now largely part of the customer experience. In order to keep a competitive edge, you need to take advantage of technologies that make it easier for your customers to learn about your products and service, use them, and to do business with you.

Companies that make a point of providing a great customer experience have 4-8% higher revenue than others in their industry.

This could mean upgrading purchase order and invoice processes so they’re completely electronic. If you have a retail store, they you may want to upgrade to contactless point-of-sale (POS) devices that make the checkout process safe and more convenient.

Schedule Your Year-End Technology Assessment Today!

Cloudavize performs technology assessments that give you valuable insight into your IT infrastructure needs and offer a roadmap for smart tech decisions.

Contact Cloudavize today for a free consultation to get started.